I would love to see the derivative of the two curves in the GDP figure. They might tell us a lot about the functioning/non-functioning of the rule of law and protection of property rights in the world as a whole. There's no reason to think that growth in GDP would be constant as it seems to be in the chart from 1950-present. Knowledge/technology/productivity should follow some sort of exponential curve, as delta-knowledge is based on existing current knowledge. It's clear that massive inflation and government controls in the first world, and lack of rule of law in the rest of the world is massively holding back world economic growth, because think of how bad this chart would be with China excluded.
China would have hardly made a dent in the curve before 2000, but it might be said that capital flows toward the higher returns, which happens so long as it can. Now China's growth has begun to tend toward the larger world...and they have a lot of empty buildings and investments.
Agreed that rule of law matters. I say so in my technology definition article I linked to. Culture matters, too.
20 years to hit 10 Million equivalent? How much disruption/global panic/ governmental crisis creation/distraction along the way? The era of the military petro dollar (combating Russia and China, but also influencing Latin America, south east Asia, and to a lesser degree Sub Saharan African countries…. ) has been so immense on our frame of reality, not sure we can fully grok what comes next. I’m fully in favor of the end of these governmental mafias, hegemonies…. While also hoping we don’t enter an era of warlords…. Public infrastructure will continue to be a need for the vast majority of families, and elderly…. Hospitals, roads, water for kids . Perhaps beyond a “Green New Deal”, we can have a “Bitcoin New Deal”…. To advance investment in meaningful futures and experiments…
It is important for communities to reinvest in the people they sloughed off to flyover states who know how to build and maintain infrastructure. Localization needs to be a value again and soon.
I think something but that would go a long way to reunifying the country’s (US) sense of collective experience, ownership, etc., would be a 2 to 3 year required term of service, somewhat like the military, but doing sort of engineering infrastructure projects throughout the country. Could go a decent way to resolving some of the crisis of college/higher education that we have created, as well as give young people some trade experience, in addition to building service projects that are non-ephemeral.
Personally, I think people should never be forced into things. But if it were an option offered for young people and useless incentives were stopped, it could be a great thing if natural motivations were restored.
I was about to write something similar, so will piggy-back your commet.
The $ will not give up without a fight. Which means that there will be a very serious global upheaval. It probably has already started with the proxy war in the Ukraine.
The main risk in that war (beside huge human life loses) is that we lose most of the technology we have now. Including cultural technology.
It‘s clear that the US can‘t win against China in central planning and authoritarian force. The only way the US can stay ahead of China is by freedom. Free markets attract the most investment and best talent. Embracing bitcoin as a permissionless and hard money alternative to CBDCs could actually be THE opportunity for the US to remain #1.
I wholeheartedly agree. There is a huge BUT, though: the interests of our ruling elites do not seem to align with what a normal person would call the US interests.
THE WOLF STREET REPORT: Leverage & Interconnectedness Are Blowing Up Crypto & DeFi
That’s what’s different this time: Stuff blows up because of leverage and cascades through the crypto space because everything’s interconnected. Unlike prior “crypto winters”
Crypto lender and broker Voyager Digital, which also took deposits and offered yield products with huge interest rates of up to 12%, said in a series of tweets today that it is, “actively pursuing a series of strategic alternatives” and that it is “focused on protecting assets and maximizing value for all customers as quickly as possible.” That’s horrifying language for people who have their cryptos on deposit at Voyager and now cannot get their cryptos or anything else out.
What’s different this time about the collapse of cryptos, compared to last time in 2018, are two huge factors that were barely in their infancy back then: massive leverage and interconnectedness.
All these crypto firms lent to each other and borrowed from each other in cryptos, to speculate in cryptos with borrowed cryptos, and they lent out borrowed cryptos, and they posted cryptos as collateral with each other for more leverage, which is now triggering margin calls, forced selling, and wipeouts cascading through the space. This interconnectedness created huge systemic risks within the crypto space that are now coming home to roost.
On Friday, Voyager Digital had suspended trading and withdrawals. In other words, depositors cannot get their cryptos and collateral out. And they cannot get any fiat out either.
These people are unsecured creditors if Voyager files for bankruptcy. Voyager has already hired restructuring and bankruptcy lawyers and consultants.
Voyager got taken down by the crypto hedge fund, Three Arrows Capital, which blew up amid huge leverage when cryptos plunged.
Three Arrows Capital, which was said to have managed about $10 billion of cryptos as of March, was ordered into liquidation by a court in the British Virgin Islands, where it’s legally headquartered. On Friday, it filed for Chapter 15 bankruptcy in the US.
Voyager had lent 15,250 bitcoins and 350 million USD Coins, a stablecoin, to the hedge fund. Combined, that loan amounts to about $650 million at current prices. And Three Arrows had defaulted on that loan.
Three Arrows ran into trouble when cryptos dropped below a certain level and when Luna, in which it was heavily invested, collapsed by 100%, at which point it received margin calls that demanded more collateral, and when that wasn’t forthcoming, its leveraged positions were liquidated by crypto exchanges including BitMEX and Deribit.
Voyager said in the series of tweets today, Sunday, that it has $1.3 billion worth of cryptos left on its platform – presumably put there by depositors – who are now locked out, and that it has $650 million in claims against Three Arrows Capital, which Three Arrows has defaulted on.
Voyager trades on the Toronto stock exchange. On Friday, July 1st, when it announced that it had locked out its depositors, the Toronto Stock Exchange was closed in observance of Canada Day. In the US, where Voyager trades over the counter, its shares plunged 31% on Friday, to 30 cents.
Voyager was founded in 2018 and had started trading in Canada in September 2021 at around 16 Canadian dollars a share, and amid immense crypto hype and hoopla rose to over $21 by peak crypto mania in November 2021. The stock has now collapsed by nearly 100% in 10 months. So that wipeout was fast.
The winners are always those who get in early on Ponzi schemes -- but they need to understand it is a Ponzi scheme as opposed to a cult.
Those who are in the cult believe $69,000 for a Bitcoin is cheap -- cuz it's going to $500,000 right?
Time for an anecdote -- I have a good mate who is exhibiting cult-like behaviour re Bitcoin... he is a very senior fellow at an eminent US investment bank.... I can still reference his DMs from some months ago 'urging me to own Bitcoin' when it was over 60k.
I refrained. Why? Same reason I refrain from putting 60k on 'black' on the roulette wheel.
Actually there's more to it than that. If crypto is the 'way of the future' then the Fed -- which has the NSA and a rather powerful military backing it up - owns the reserve currency. Ya think they are gonna allow an upstart to steal their mojo?
If the US Fed wanted Bitcoin gone they simply command the banks to not permit the conversion of Bitcoin to real money - i.e. bills that can be traded for stuff.
Or better still they make ownership of Bitcoin illegal. Big fines + jail.
Oh but they don't know who owns it so how do they enforce that?
The NSA knows who owns Bitcoin - cuz the NSA is looking over your shoulder... all the time ... the NSA is watching me type this ... so all the NSA needs to do is work with the FBI to arrest and fine a few people who believe they are anonymous.
Bitcoin goes to ZERO. In seconds.
And if crypto is the way of the future ... why wouldn't the Fed simply conjure up their own? It's not exactly rocket science given there are thousands of pretenders out there. The Fed uses the long arm of the law to prosecute counterfeiters... Fedcoin would become the only acceptable crypto... and it's game over for all others.
Now we get to my punchline.... my mate who was urging me to buy at 60k+ had my interests at heart. He told me that price was cheap.... he clearly believes the mass psychosis that insists 500k is inevitable.
Let's say he entered the cult at 25k... (he was definitely not a founding member ... getting religion fairly recently).... do ya think he's unloading at taking his winnings?
I doubt that ... I suspect he would have taken his entire, and not unsubstantial bonus, and dumped the lot on more Bitcoin etc....
This is the danger of being a true believer in what is essentially a cult... you are certain 60k is cheap ... so you not only don't cash in --- you continue to increase your position.
The truest of believers do not get dismayed by the plunge to sub 20k.... they HODL that 60k purchases -- and average down mortgaging their homes -- and buying even more.
If one reads Wolf's article -- it details what causes the run up in cryptos - it's fuelled by easy money and FOMO -- but more crucially it is an epic Ponze... you've got an incestuous situation where the various platforms and intermediaries are making loans to each other backed by their various cryptoCONS... and using those loans to pump each other up ... creating hype that sucks in more fools who take real money and dump it into the CON.
As I have suggested previously - the crypto space is yet another mass psychosis that is aimed at convincing folks that there is still upwards mobility -- kinda like a lottery but for the educated plebes.. a lottery is pure luck right ... no hard work or smarts involved... crypto success takes brains right... one can convince oneself of that when the ponze is on the move and one has black comes up on the wheel... funny how we can rationalize stuff -- then the tide goes out...
"And if crypto is the way of the future ... why wouldn't the Fed simply conjure up their own?"
There are numerous reasons why Bitcoin is a one time invention. I will talk about that more in future articles.
"Those who are in the cult believe $69,000 for a Bitcoin is cheap -- cuz it's going to $500,000 right?"
This argument has been made for the last 21 doublings of value. It will likely be made a few times in the future, but that doesn't tell us whether or not Bitcoin will become the reserve currency, which is the primary question.
AS the Wolfstreet article so elegantly explains... the run up is manufactured... it's a product of the incestuous relationships between the various cryptos....
Fuelled by a PR machine that hypes the shit out of it ... which pumps out non-stop BS about how special Bitcoin is ... (notice the endless spew of how you can buy things like a coffee using Bitcoin - that's to herd the sheep into believing it's going mainstream - oh ya? When? Has anyone ever bought a Starbucks - how does on do that???) --- building up FOMO and enticing people to jump into the Ponze with their hard earned money.
The hype was just that hype... Bitcoin ain't gonna be the reserve currency -- that's just another invention coming out of Edelman or whoever is handling this mass psychosis.
It does appear that the gig us now up - the cheap money is drying up -- not only is crypto getting crushed -- so too are all these money burning tech plays... whose business model has been effectively-- sell $100 bills for $50 and convince punters that you'll corner the market on money changing --- then you'll charge $150 for the $100's....
Record low interest rates and unlimited cash (I've got a mate who was offered a multi million dollar unsecured facility by Citi and nearly 0% interest a couple of years ago haha)... has a tendency to blow massive bubbles in everything.
Including crypto.
Wolf nailed it. What cannot continue - will stop (Herb Stein)
Not to pick on crytpo - everything is about to stop.
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. FT.comhttps://archive.ph/UUfl2
Imagine referring to a financial news blog post as fact in the midst of a bear market. Finance news is always pro-cyclical and gets it wrong most of the time.
Cryptos were driven by a very effective hype campaign --- and by the incestuous relationships between the various players who were borrowing from each other and bidding the market up.
There is nothing fundamentally sound about any of this --- it is a Ponzi Scheme on Steroids (a PST)
One would expect that the players will continue with the same strategies and we'll see some dead cat bounces as they insist (again) that this is a buying opportunity (BC will be 500k next year.. trust us). They seem to be revving the engine but it's not catching a gear.
More than likely what is going to happen is this desperate flailing will compound the disaster (for those who bought at 60k and for those who didn't sell at 60k cuz 500k) and the shit show will collapse.
But then the global economy is going to collapse. That is baked in. We are going to revisit GFC but this time there won't be anyone able to ride to the rescue.
Anyone care to walk me through how we get out of this pickle? The CBs have been throwing trillions at this mess since GFC... and now the gimmicks are tearing the guts out of the global economy. So they raise interest rates to tame the beast -- into a world that is leveraged beyond anything ever seen before - and punch drunk on record low interest rates.
Hey maybe the PR Team for Crypto should launch a campaign claiming it's the new gold. Might get a last gasp out of that.
"Take The Tragedy In Sri Lanka And Multiply By Ten": The Fed Just Lobbed A Financial Nuke That Will Obliterate The Global Economy
We are living in a period of mass “Jonestown” economic delusion. Just twenty months ago – central bankers were offering to buy nearly every junk bond known to mankind, dramatically distorting the “true cost of capital.” All the way from crypto to emerging markets – it was a moral hazard overdose. Everyone on earth was borrowing money at fantasy-land bond yields.
Now, the Fed is promising endless rate hikes and $1T of balance sheet reduction onto a planet with emerging market and Euro-zone credit markets in flames.
Dude, that's good stuff. I am more and more thinking tangible assets is the way to go. Inflation will never go away because the trillion dollar give aways will never cease. They will do this on purpose and then tell us the only solution is to confiscate our cash. (Remember FDR's nationwide confiscation of gold) This will lead to a transition to digital currency, they will tell us this is the only way. How will Bitcoin play in that scenario? I don't know. If people want inflation to go away they should start saving more money, we should urge everyone to save, not spend.
We are out of cheap energy -- total collapse is imminent -- and starvation.(even prepping is useless - the hordes will tear up your garden and eat your chickens)
If we ignore that -- and for some reason were shifting to digital currency (hmmm... aren't we already there -- I move money around all the time -- it's just numbers on my accounts... I almost never use cash -- the only reason I do use it is to buy sacks of horse poo that's left by neighbours on the side of the road to put in my garden...) why would Bitcoin play any role in this?
Why would the Fed or any government anoint Bitcoin - or any other crypto dreamed up by a 20 something nerd with a maths background?
Why not launch FedCOIN?
Nothing demonstrates the ridiculousness of this that Dogecoin.
Dogecoin code: DOGE, symbol: Ð) is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a "joke", making fun of the wild speculation in cryptocurrencies at the time.[3] It is considered both the first "meme coin", and, more specifically, the first "dog coin". Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the "doge" meme as its logo and namesake.[4][5][6] It was introduced on December 6, 2013, and quickly developed its own online community, reaching a market capitalization of over $85 billion[a] on May 5, 2021.[7] It is the current shirt sponsor (sleeve only) of Premier League club Watford.[8]
But hey... people do make money on Ponzi schemes... they are generally the ones who realize what the game is... they stoke the fire and create FOMO and they are cashing out on those who believe otherwise.
It does amaze me how the true cultists will invent the most astounding and often sophisticated stories to explain how it's the thing of the future (and none of the legacy type investors get it... like they didn't get Pets.com's valuation...)
Yet they ignore the reality that if the Fed wanted to end Bitcoin today -- they could crush it ... by announcing it is illegal to trade any crypto.
The fact that they don't leads me to believe that they want it to exist... for reasons that I earlier expounded upon.
And btw - gold will be useless when the global economy collapses --- if you think that one through ... would you trade a case of canned tuna for a kg of gold -- when the supply chains have Humptied... and never to be put back together again?
That would be what someone suffering from the Dunning Kruger effect might not understand... this can be helpful in understanding what collapse looks like. We are on the precipice.
Trade-Off -Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse.
And then there is Ecuador... I suppose they can hold and wait for the proverbial 500k value... unfortunately ... they will need to liquidate some of their crushed holdings to stave off a Sri Lanka scenario...
Naseem Taleb has written an interesting analysis of Bitcoin:
Bitcoin, Currencies, and Fragility 1 Nassim Nicholas Taleb† ‡ †Universa Investments ‡Tandon School of Engineering, New York University Forthcoming, Quantitative Finance
‘They couldn’t even scream any more. They were just sobbing’: the amateur investors ruined by the crypto crash
Fuelled by hype and hysteria, the market in bitcoin and other cryptocurrencies went from an obscure niche to a $3tn industry. Then the house of cards collapsed
In the gloom of an 18th-century drawing room at the private rehab clinic Castle Craig, near Peebles in the Scottish Borders, Roy, a 29-year-old victim of the global cryptocurrency crash, tells me his story. It is a dazzling summer’s day, but here the mood is sombre. Roy shifts uncomfortably in his chair as he begins.
It all started in February 2021, with a radio advert for Dogecoin, a cryptocurrency promoted by Elon Musk, the founder of Tesla. Intrigued, Roy started Googling, eventually using his credit card to make an initial investment of €2,500 (£2,200) in a range of cryptocurrencies. The value of Roy’s portfolio climbed to €8,000, then €100,000, then €525,000. Roy had entered the market during an adrenalised bull run, meaning an extended period of price growth. A combination of Covid stimulus packages, low interest rates and an unprecedented level of enthusiasm for cryptocurrency among furloughed workers meant the bull was careering out of sight.
Roy started spending all his time watching YouTube videos and speaking to other cryptocurrency enthusiasts in private groups on the messaging app Telegram. He had been treated for cocaine and alcohol addiction twice, but by 2021 he was sober and working as an addiction counsellor, although he was on sick leave as a result of panic attacks brought on by childhood trauma. He soon relapsed. By day, he checked his cryptocurrency wallets every 10 seconds; by night, he set alarms to go off on the hour.
He began fantasising about a life free of financial constraints, in which he would never have to work. “I thought I was on top of the world,” Roy says. “Nobody could tell me anything. Money would fix every single problem I faced from now on.”
Then the cryptocurrency market crashed. The price of bitcoin fell from £42,000 in May 2021 to £23,000 by the end of June. It rallied to an all-time high of £48,000 in November, before diving to £26,000 at the end of January. Since then, it has been in near-continuous freefall. At the time of writing, bitcoin is hovering at £17,000. “It felt like I had lost my life,” says Roy. “Because I had invested everything in crypto. I had built every dream I had on there. So, when it came crashing down, my whole life came crashing down.”
Desperate, Roy made a string of bad bets. The value of his portfolio dwindled to €20,000, then €3,000. “It got so out of control because I saw all my chances to live a better life fading away,” he says. “So I became really desperate and eventually just completely isolated. I didn’t want to see anybody, because I thought I was a failure.”
Most mornings, he would wake up shaking from alcohol withdrawal, order booze online and spend the day drinking and taking drugs. He developed stomach ulcers. “You can’t explain the pain,” he says. “I would drink and puke and drink and puke and drink and hope to keep it in, so the pain would go away. I felt like dying.”
"Take The Tragedy In Sri Lanka And Multiply By Ten": The Fed Just Lobbed A Financial Nuke That Will Obliterate The Global Economy
We are living in a period of mass “Jonestown” economic delusion. Just twenty months ago – central bankers were offering to buy nearly every junk bond known to mankind, dramatically distorting the “true cost of capital.” All the way from crypto to emerging markets – it was a moral hazard overdose. Everyone on earth was borrowing money at fantasy-land bond yields.
Now, the Fed is promising endless rate hikes and $1T of balance sheet reduction onto a planet with emerging market and Euro-zone credit markets in flames.
Russia: President Putin Signs Law Banning Crypto Payments
Just when it finally seemed positive for the crypto industry in Russia with the Central Bank, Bank of Russia gravitating toward a pro-crypto approach, the country’s President signed a law banning crypto payments in the region.
Just when it finally seemed positive for the crypto industry in Russia with the Central Bank, Bank of Russia gravitating toward a pro-crypto approach, the country’s President signed a law banning crypto payments in the region.
The latest update is not an upgrade for the crypto industry in the country. Russian President Vladimir Putin signed a law, banning the use of digital financial assets (DFA) and digital utility rights (DPR) as a means of payment for goods, products, or services in Russia.
The legal document stated,
“It is prohibited to transfer or accept digital financial assets as a consideration for transferred goods, performed works, rendered services, as well as in any other way that allows one to assume payment for goods (works, services) by a digital financial asset, except as otherwise provided by federal laws.”
Furthermore, along with banning crypto payments, the law also levies crypto exchange operators to refuse transactions where it is possible to use such assets as a monetary surrogate. This simplistically means that crypto brokers facilitating payments are now subjected to the national payment system, in turn putting them under the oversight of the country’s financial regulator.
I am of the not so humble opinion that the Fed/US Govt is actually behind the Crypto Craze... not because they intend to make Bitcoin the new reserve currency ... but as suggested it's the lottery for the educated classes... work hard - be smart - get rich.
We have all seen the studies of the impact of the loss of upwards mobility... it's not a good look.
Crypto is a mass psychosis that creates the perception that anything is possible still....
The alternative is to dream up a business that loses billions (scale is important) yet continues to grow (it's ok if losses outstrip the growth.... as long as you grow).
It's quite difficult to think up a business like that -- the only thing that comes to mind is selling $100 for $50.
Oh hang on .. here's one.... I will pitch this to softbank.... we raise one hundred billion dollars --- and we aim to capture the US coffee market.... by selling The Absolute Finest Coffee... for 50 cents a cup.... we open up next existing coffee houses and drive them out of business....
Once we have a monopoly we raise the price to 8 bucks! If anyone dares to challenge us we open 6 coffee houses next to them .. Ambush Capitalism!
Of course we need to give the politicians like Pelosi a heads up on this so they can front run this and veto any anti-trust bullshit.... we might have allocate some shares to key Washington contacts ... small potatoes that...
We'll lose a shitload of $$$ executing on this... but we will realize growth as we drive the small guys out...
The big boys like Starbucks will put up a fight ... but we'll just keep going back to the well and raising more $$$$.....
Eventually there will FE Fine Coffee and Starbucks standing .... a cage match!
We hire a documentary maker to film all of this (netfix series) ... culminating in Fast Eddy thrashing Howard Schultz -- (pay per view...)
And FEFC owns the market.
This is just the first draft... I'll come back with a bit more meat on the bones later... we need some Transgenders and Pregnant men involved... perhaps on the board? - to create mass appeal for the brand....
"I am assuming that it's somehow different from BTC wealth pools, such as FTX. How exactly?"
Because the Fed cannot control it. Nobody can.
"Interestingly Sam Bankman-Fried is one of the largest contributors to Biden campaign. Coincidence? I don't think so..."
Bitcoin is not the centralized exchanges. Noting that one of the billionaire crypto entrepreneurs "does X" is not really meaningful with respect to the conversation.
Per article, it would be appreciated to focus conversation on the content of the article.
Not sure exactly what you mean, so I will assume that you sort of support my point: there are people out there who hold a shitload of bitcoin and might gain a lot of power after hypebitcoinization. I do not understand Mathew's reply at this point, but hoping that he will address the issue in another post. In the meanwhile I would like to respect his wishes as the owner of this substack and not discuss the issue here.
What i wanted to say is: Sam Bankman Fried is essentially running a casino of worthless crypto tokens and uses insights from this casino (e.g. order books) to trade for his hedge fund. He has repeatedly denied the impact bitcoin has had on people. He even mingles with Bill Clinton and Tony Blair. I think he is puppet of the elite trying to profit from crypto.
This is in stark contrast to Jesse Powell, CEO of Kraken, who is a very based dude who pushes against vax mandates, woke ideology, etc. Jesse is a much better representation of the freedom values the bitcoin community hold rather than Sam and the crypto community (they are distinct communities).
I’m assuming that when you say Bitcoin, you mean the asset also traded under the ticker BTC? I value your insights, so I wanted clarification. There is good reason to think that BSV is Bitcoin, and when considering the diminishing block reward, BSV appears better prepared to handle those challenges.
BTC. The market has chosen. Even if BSV or BCH found improvements, they could be instantly air dropped in proportion to BTC onto the network, which ensures BTC dominance.
If one of those improvements isn’t raising the block size limit, then I don’t know how ~1 billion plus people can actually get on the network. I’m using a billion figuratively, in order to really start to replace nation state currencies, it’s going to have to be massive adoption, and I don’t know that a severely limited Bitcoin can accommodate adoption at that scale, even receiving first coin transactions
Block size is relatively unimportant. The system reaches equilibrium regardless. And if there is an optimization adjustment, it will be made to the currency that has already accrued the lion's share of value. BTC can adopt improvements. It's a simple, but powerful advantage.
I would love to see the derivative of the two curves in the GDP figure. They might tell us a lot about the functioning/non-functioning of the rule of law and protection of property rights in the world as a whole. There's no reason to think that growth in GDP would be constant as it seems to be in the chart from 1950-present. Knowledge/technology/productivity should follow some sort of exponential curve, as delta-knowledge is based on existing current knowledge. It's clear that massive inflation and government controls in the first world, and lack of rule of law in the rest of the world is massively holding back world economic growth, because think of how bad this chart would be with China excluded.
China would have hardly made a dent in the curve before 2000, but it might be said that capital flows toward the higher returns, which happens so long as it can. Now China's growth has begun to tend toward the larger world...and they have a lot of empty buildings and investments.
Agreed that rule of law matters. I say so in my technology definition article I linked to. Culture matters, too.
20 years to hit 10 Million equivalent? How much disruption/global panic/ governmental crisis creation/distraction along the way? The era of the military petro dollar (combating Russia and China, but also influencing Latin America, south east Asia, and to a lesser degree Sub Saharan African countries…. ) has been so immense on our frame of reality, not sure we can fully grok what comes next. I’m fully in favor of the end of these governmental mafias, hegemonies…. While also hoping we don’t enter an era of warlords…. Public infrastructure will continue to be a need for the vast majority of families, and elderly…. Hospitals, roads, water for kids . Perhaps beyond a “Green New Deal”, we can have a “Bitcoin New Deal”…. To advance investment in meaningful futures and experiments…
It is important for communities to reinvest in the people they sloughed off to flyover states who know how to build and maintain infrastructure. Localization needs to be a value again and soon.
I think something but that would go a long way to reunifying the country’s (US) sense of collective experience, ownership, etc., would be a 2 to 3 year required term of service, somewhat like the military, but doing sort of engineering infrastructure projects throughout the country. Could go a decent way to resolving some of the crisis of college/higher education that we have created, as well as give young people some trade experience, in addition to building service projects that are non-ephemeral.
Personally, I think people should never be forced into things. But if it were an option offered for young people and useless incentives were stopped, it could be a great thing if natural motivations were restored.
I was about to write something similar, so will piggy-back your commet.
The $ will not give up without a fight. Which means that there will be a very serious global upheaval. It probably has already started with the proxy war in the Ukraine.
The main risk in that war (beside huge human life loses) is that we lose most of the technology we have now. Including cultural technology.
We need to think of ways to protect it now.
It‘s clear that the US can‘t win against China in central planning and authoritarian force. The only way the US can stay ahead of China is by freedom. Free markets attract the most investment and best talent. Embracing bitcoin as a permissionless and hard money alternative to CBDCs could actually be THE opportunity for the US to remain #1.
I wholeheartedly agree. There is a huge BUT, though: the interests of our ruling elites do not seem to align with what a normal person would call the US interests.
Dutch truckers et al.
A slightly different take on crypto:
THE WOLF STREET REPORT: Leverage & Interconnectedness Are Blowing Up Crypto & DeFi
That’s what’s different this time: Stuff blows up because of leverage and cascades through the crypto space because everything’s interconnected. Unlike prior “crypto winters”
Crypto lender and broker Voyager Digital, which also took deposits and offered yield products with huge interest rates of up to 12%, said in a series of tweets today that it is, “actively pursuing a series of strategic alternatives” and that it is “focused on protecting assets and maximizing value for all customers as quickly as possible.” That’s horrifying language for people who have their cryptos on deposit at Voyager and now cannot get their cryptos or anything else out.
What’s different this time about the collapse of cryptos, compared to last time in 2018, are two huge factors that were barely in their infancy back then: massive leverage and interconnectedness.
All these crypto firms lent to each other and borrowed from each other in cryptos, to speculate in cryptos with borrowed cryptos, and they lent out borrowed cryptos, and they posted cryptos as collateral with each other for more leverage, which is now triggering margin calls, forced selling, and wipeouts cascading through the space. This interconnectedness created huge systemic risks within the crypto space that are now coming home to roost.
On Friday, Voyager Digital had suspended trading and withdrawals. In other words, depositors cannot get their cryptos and collateral out. And they cannot get any fiat out either.
These people are unsecured creditors if Voyager files for bankruptcy. Voyager has already hired restructuring and bankruptcy lawyers and consultants.
Voyager got taken down by the crypto hedge fund, Three Arrows Capital, which blew up amid huge leverage when cryptos plunged.
Three Arrows Capital, which was said to have managed about $10 billion of cryptos as of March, was ordered into liquidation by a court in the British Virgin Islands, where it’s legally headquartered. On Friday, it filed for Chapter 15 bankruptcy in the US.
Voyager had lent 15,250 bitcoins and 350 million USD Coins, a stablecoin, to the hedge fund. Combined, that loan amounts to about $650 million at current prices. And Three Arrows had defaulted on that loan.
Three Arrows ran into trouble when cryptos dropped below a certain level and when Luna, in which it was heavily invested, collapsed by 100%, at which point it received margin calls that demanded more collateral, and when that wasn’t forthcoming, its leveraged positions were liquidated by crypto exchanges including BitMEX and Deribit.
Voyager said in the series of tweets today, Sunday, that it has $1.3 billion worth of cryptos left on its platform – presumably put there by depositors – who are now locked out, and that it has $650 million in claims against Three Arrows Capital, which Three Arrows has defaulted on.
Voyager trades on the Toronto stock exchange. On Friday, July 1st, when it announced that it had locked out its depositors, the Toronto Stock Exchange was closed in observance of Canada Day. In the US, where Voyager trades over the counter, its shares plunged 31% on Friday, to 30 cents.
Voyager was founded in 2018 and had started trading in Canada in September 2021 at around 16 Canadian dollars a share, and amid immense crypto hype and hoopla rose to over $21 by peak crypto mania in November 2021. The stock has now collapsed by nearly 100% in 10 months. So that wipeout was fast.
More https://wolfstreet.com/2022/07/09/leverage-interconnectedness-are-blowing-up-crypto-defi/
It's only different this time for the people who bought into those Ponzi schemes.
The people who get it still won big this cycle. HODL keeps winning.
The winners are always those who get in early on Ponzi schemes -- but they need to understand it is a Ponzi scheme as opposed to a cult.
Those who are in the cult believe $69,000 for a Bitcoin is cheap -- cuz it's going to $500,000 right?
Time for an anecdote -- I have a good mate who is exhibiting cult-like behaviour re Bitcoin... he is a very senior fellow at an eminent US investment bank.... I can still reference his DMs from some months ago 'urging me to own Bitcoin' when it was over 60k.
I refrained. Why? Same reason I refrain from putting 60k on 'black' on the roulette wheel.
Actually there's more to it than that. If crypto is the 'way of the future' then the Fed -- which has the NSA and a rather powerful military backing it up - owns the reserve currency. Ya think they are gonna allow an upstart to steal their mojo?
If the US Fed wanted Bitcoin gone they simply command the banks to not permit the conversion of Bitcoin to real money - i.e. bills that can be traded for stuff.
Or better still they make ownership of Bitcoin illegal. Big fines + jail.
Oh but they don't know who owns it so how do they enforce that?
The NSA knows who owns Bitcoin - cuz the NSA is looking over your shoulder... all the time ... the NSA is watching me type this ... so all the NSA needs to do is work with the FBI to arrest and fine a few people who believe they are anonymous.
Bitcoin goes to ZERO. In seconds.
And if crypto is the way of the future ... why wouldn't the Fed simply conjure up their own? It's not exactly rocket science given there are thousands of pretenders out there. The Fed uses the long arm of the law to prosecute counterfeiters... Fedcoin would become the only acceptable crypto... and it's game over for all others.
Now we get to my punchline.... my mate who was urging me to buy at 60k+ had my interests at heart. He told me that price was cheap.... he clearly believes the mass psychosis that insists 500k is inevitable.
Let's say he entered the cult at 25k... (he was definitely not a founding member ... getting religion fairly recently).... do ya think he's unloading at taking his winnings?
I doubt that ... I suspect he would have taken his entire, and not unsubstantial bonus, and dumped the lot on more Bitcoin etc....
This is the danger of being a true believer in what is essentially a cult... you are certain 60k is cheap ... so you not only don't cash in --- you continue to increase your position.
The truest of believers do not get dismayed by the plunge to sub 20k.... they HODL that 60k purchases -- and average down mortgaging their homes -- and buying even more.
If one reads Wolf's article -- it details what causes the run up in cryptos - it's fuelled by easy money and FOMO -- but more crucially it is an epic Ponze... you've got an incestuous situation where the various platforms and intermediaries are making loans to each other backed by their various cryptoCONS... and using those loans to pump each other up ... creating hype that sucks in more fools who take real money and dump it into the CON.
As I have suggested previously - the crypto space is yet another mass psychosis that is aimed at convincing folks that there is still upwards mobility -- kinda like a lottery but for the educated plebes.. a lottery is pure luck right ... no hard work or smarts involved... crypto success takes brains right... one can convince oneself of that when the ponze is on the move and one has black comes up on the wheel... funny how we can rationalize stuff -- then the tide goes out...
I understand that the guy who invented crypto is meant to be a Japanese chap... Satoshi ... seems he denies it https://www.cbc.ca/news/world/i-m-not-bitcoin-founder-satoshi-nakamoto-l-a-man-says-1.2563524
Rather odd that nobody comes forward to take a bow.... smells like a psyop to me ... for the purpose of keeping the educated hordes pacified.
I get it. I am a product of Dotcom 1.0... I get stuff ... I survived 1.0 2.0 etc... The CovCON ... I will not survive... nobody will.
"And if crypto is the way of the future ... why wouldn't the Fed simply conjure up their own?"
There are numerous reasons why Bitcoin is a one time invention. I will talk about that more in future articles.
"Those who are in the cult believe $69,000 for a Bitcoin is cheap -- cuz it's going to $500,000 right?"
This argument has been made for the last 21 doublings of value. It will likely be made a few times in the future, but that doesn't tell us whether or not Bitcoin will become the reserve currency, which is the primary question.
AS the Wolfstreet article so elegantly explains... the run up is manufactured... it's a product of the incestuous relationships between the various cryptos....
Fuelled by a PR machine that hypes the shit out of it ... which pumps out non-stop BS about how special Bitcoin is ... (notice the endless spew of how you can buy things like a coffee using Bitcoin - that's to herd the sheep into believing it's going mainstream - oh ya? When? Has anyone ever bought a Starbucks - how does on do that???) --- building up FOMO and enticing people to jump into the Ponze with their hard earned money.
The hype was just that hype... Bitcoin ain't gonna be the reserve currency -- that's just another invention coming out of Edelman or whoever is handling this mass psychosis.
It does appear that the gig us now up - the cheap money is drying up -- not only is crypto getting crushed -- so too are all these money burning tech plays... whose business model has been effectively-- sell $100 bills for $50 and convince punters that you'll corner the market on money changing --- then you'll charge $150 for the $100's....
Record low interest rates and unlimited cash (I've got a mate who was offered a multi million dollar unsecured facility by Citi and nearly 0% interest a couple of years ago haha)... has a tendency to blow massive bubbles in everything.
Including crypto.
Wolf nailed it. What cannot continue - will stop (Herb Stein)
Not to pick on crytpo - everything is about to stop.
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. FT.com https://archive.ph/UUfl2
Collapse Imminent: https://thephilosophicalsalon.com/a-self-fulfilling-prophecy-systemic-collapse-and-pandemic-simulation/
The Illusion of Stability, the Inevitability of Collapse http://charleshughsmith.blogspot.com/2021/09/the-illusion-of-stability-inevitability.html
"AS the Wolfstreet article so elegantly explains... the run up is manufactured"
Claims without warrants aren't particularly convincing.
"It does appear that the gig us now up - the cheap money is drying up -- not only is crypto getting crushed"
By "Getting crushed" you mean that Bitcoin outperformed all markets again over the past 24 months.
Huh.
Littering here with a lot of unsupported conclusions is not good faith.
Imagine referring to a financial news blog post as fact in the midst of a bear market. Finance news is always pro-cyclical and gets it wrong most of the time.
The thing is...
Cryptos were driven by a very effective hype campaign --- and by the incestuous relationships between the various players who were borrowing from each other and bidding the market up.
There is nothing fundamentally sound about any of this --- it is a Ponzi Scheme on Steroids (a PST)
One would expect that the players will continue with the same strategies and we'll see some dead cat bounces as they insist (again) that this is a buying opportunity (BC will be 500k next year.. trust us). They seem to be revving the engine but it's not catching a gear.
More than likely what is going to happen is this desperate flailing will compound the disaster (for those who bought at 60k and for those who didn't sell at 60k cuz 500k) and the shit show will collapse.
But then the global economy is going to collapse. That is baked in. We are going to revisit GFC but this time there won't be anyone able to ride to the rescue.
Anyone care to walk me through how we get out of this pickle? The CBs have been throwing trillions at this mess since GFC... and now the gimmicks are tearing the guts out of the global economy. So they raise interest rates to tame the beast -- into a world that is leveraged beyond anything ever seen before - and punch drunk on record low interest rates.
Hey maybe the PR Team for Crypto should launch a campaign claiming it's the new gold. Might get a last gasp out of that.
"Take The Tragedy In Sri Lanka And Multiply By Ten": The Fed Just Lobbed A Financial Nuke That Will Obliterate The Global Economy
We are living in a period of mass “Jonestown” economic delusion. Just twenty months ago – central bankers were offering to buy nearly every junk bond known to mankind, dramatically distorting the “true cost of capital.” All the way from crypto to emerging markets – it was a moral hazard overdose. Everyone on earth was borrowing money at fantasy-land bond yields.
Now, the Fed is promising endless rate hikes and $1T of balance sheet reduction onto a planet with emerging market and Euro-zone credit markets in flames.
https://www.zerohedge.com/markets/take-tragedy-sri-lanka-and-multiply-ten-fed-just-lobbed-financial-nuke-will-obliterate
Dude, that's good stuff. I am more and more thinking tangible assets is the way to go. Inflation will never go away because the trillion dollar give aways will never cease. They will do this on purpose and then tell us the only solution is to confiscate our cash. (Remember FDR's nationwide confiscation of gold) This will lead to a transition to digital currency, they will tell us this is the only way. How will Bitcoin play in that scenario? I don't know. If people want inflation to go away they should start saving more money, we should urge everyone to save, not spend.
We are out of cheap energy -- total collapse is imminent -- and starvation.(even prepping is useless - the hordes will tear up your garden and eat your chickens)
If we ignore that -- and for some reason were shifting to digital currency (hmmm... aren't we already there -- I move money around all the time -- it's just numbers on my accounts... I almost never use cash -- the only reason I do use it is to buy sacks of horse poo that's left by neighbours on the side of the road to put in my garden...) why would Bitcoin play any role in this?
Why would the Fed or any government anoint Bitcoin - or any other crypto dreamed up by a 20 something nerd with a maths background?
Why not launch FedCOIN?
Nothing demonstrates the ridiculousness of this that Dogecoin.
Dogecoin code: DOGE, symbol: Ð) is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a "joke", making fun of the wild speculation in cryptocurrencies at the time.[3] It is considered both the first "meme coin", and, more specifically, the first "dog coin". Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the "doge" meme as its logo and namesake.[4][5][6] It was introduced on December 6, 2013, and quickly developed its own online community, reaching a market capitalization of over $85 billion[a] on May 5, 2021.[7] It is the current shirt sponsor (sleeve only) of Premier League club Watford.[8]
https://en.wikipedia.org/wiki/Dogecoin
Need I say more?
But hey... people do make money on Ponzi schemes... they are generally the ones who realize what the game is... they stoke the fire and create FOMO and they are cashing out on those who believe otherwise.
It does amaze me how the true cultists will invent the most astounding and often sophisticated stories to explain how it's the thing of the future (and none of the legacy type investors get it... like they didn't get Pets.com's valuation...)
Yet they ignore the reality that if the Fed wanted to end Bitcoin today -- they could crush it ... by announcing it is illegal to trade any crypto.
The fact that they don't leads me to believe that they want it to exist... for reasons that I earlier expounded upon.
And btw - gold will be useless when the global economy collapses --- if you think that one through ... would you trade a case of canned tuna for a kg of gold -- when the supply chains have Humptied... and never to be put back together again?
That would be what someone suffering from the Dunning Kruger effect might not understand... this can be helpful in understanding what collapse looks like. We are on the precipice.
Trade-Off -Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse.
David Korowicz
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/http://feasta.org/wp-content/uploads/2012/10/Trade_Off_Korowicz.pdf
All of which could push MicroStrategy into a forced liquidation.
And then there is Ecuador... I suppose they can hold and wait for the proverbial 500k value... unfortunately ... they will need to liquidate some of their crushed holdings to stave off a Sri Lanka scenario...
https://www.msn.com/en-us/news/ecuador/bitcoin-losses-cost-country-tens-of-millions-of-dollars/vi-AAXqnYg?category=foryou
Naseem Taleb has written an interesting analysis of Bitcoin:
Bitcoin, Currencies, and Fragility 1 Nassim Nicholas Taleb† ‡ †Universa Investments ‡Tandon School of Engineering, New York University Forthcoming, Quantitative Finance
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.fooledbyrandomness.com/BTC-QF.pdf
Buyer Beware...
‘They couldn’t even scream any more. They were just sobbing’: the amateur investors ruined by the crypto crash
Fuelled by hype and hysteria, the market in bitcoin and other cryptocurrencies went from an obscure niche to a $3tn industry. Then the house of cards collapsed
In the gloom of an 18th-century drawing room at the private rehab clinic Castle Craig, near Peebles in the Scottish Borders, Roy, a 29-year-old victim of the global cryptocurrency crash, tells me his story. It is a dazzling summer’s day, but here the mood is sombre. Roy shifts uncomfortably in his chair as he begins.
It all started in February 2021, with a radio advert for Dogecoin, a cryptocurrency promoted by Elon Musk, the founder of Tesla. Intrigued, Roy started Googling, eventually using his credit card to make an initial investment of €2,500 (£2,200) in a range of cryptocurrencies. The value of Roy’s portfolio climbed to €8,000, then €100,000, then €525,000. Roy had entered the market during an adrenalised bull run, meaning an extended period of price growth. A combination of Covid stimulus packages, low interest rates and an unprecedented level of enthusiasm for cryptocurrency among furloughed workers meant the bull was careering out of sight.
Roy started spending all his time watching YouTube videos and speaking to other cryptocurrency enthusiasts in private groups on the messaging app Telegram. He had been treated for cocaine and alcohol addiction twice, but by 2021 he was sober and working as an addiction counsellor, although he was on sick leave as a result of panic attacks brought on by childhood trauma. He soon relapsed. By day, he checked his cryptocurrency wallets every 10 seconds; by night, he set alarms to go off on the hour.
He began fantasising about a life free of financial constraints, in which he would never have to work. “I thought I was on top of the world,” Roy says. “Nobody could tell me anything. Money would fix every single problem I faced from now on.”
Then the cryptocurrency market crashed. The price of bitcoin fell from £42,000 in May 2021 to £23,000 by the end of June. It rallied to an all-time high of £48,000 in November, before diving to £26,000 at the end of January. Since then, it has been in near-continuous freefall. At the time of writing, bitcoin is hovering at £17,000. “It felt like I had lost my life,” says Roy. “Because I had invested everything in crypto. I had built every dream I had on there. So, when it came crashing down, my whole life came crashing down.”
Desperate, Roy made a string of bad bets. The value of his portfolio dwindled to €20,000, then €3,000. “It got so out of control because I saw all my chances to live a better life fading away,” he says. “So I became really desperate and eventually just completely isolated. I didn’t want to see anybody, because I thought I was a failure.”
Most mornings, he would wake up shaking from alcohol withdrawal, order booze online and spend the day drinking and taking drugs. He developed stomach ulcers. “You can’t explain the pain,” he says. “I would drink and puke and drink and puke and drink and hope to keep it in, so the pain would go away. I felt like dying.”
https://www.theguardian.com/technology/2022/jul/12/they-couldnt-even-scream-any-more-they-were-just-sobbing-the-amateur-investors-ruined-by-the-crypto-crash?utm_source=pocket-newtab
one more
"Take The Tragedy In Sri Lanka And Multiply By Ten": The Fed Just Lobbed A Financial Nuke That Will Obliterate The Global Economy
We are living in a period of mass “Jonestown” economic delusion. Just twenty months ago – central bankers were offering to buy nearly every junk bond known to mankind, dramatically distorting the “true cost of capital.” All the way from crypto to emerging markets – it was a moral hazard overdose. Everyone on earth was borrowing money at fantasy-land bond yields.
Now, the Fed is promising endless rate hikes and $1T of balance sheet reduction onto a planet with emerging market and Euro-zone credit markets in flames.
https://www.zerohedge.com/markets/take-tragedy-sri-lanka-and-multiply-ten-fed-just-lobbed-financial-nuke-will-obliterate
BREAKING:
Russia: President Putin Signs Law Banning Crypto Payments
Just when it finally seemed positive for the crypto industry in Russia with the Central Bank, Bank of Russia gravitating toward a pro-crypto approach, the country’s President signed a law banning crypto payments in the region.
Just when it finally seemed positive for the crypto industry in Russia with the Central Bank, Bank of Russia gravitating toward a pro-crypto approach, the country’s President signed a law banning crypto payments in the region.
The latest update is not an upgrade for the crypto industry in the country. Russian President Vladimir Putin signed a law, banning the use of digital financial assets (DFA) and digital utility rights (DPR) as a means of payment for goods, products, or services in Russia.
The legal document stated,
“It is prohibited to transfer or accept digital financial assets as a consideration for transferred goods, performed works, rendered services, as well as in any other way that allows one to assume payment for goods (works, services) by a digital financial asset, except as otherwise provided by federal laws.”
Furthermore, along with banning crypto payments, the law also levies crypto exchange operators to refuse transactions where it is possible to use such assets as a monetary surrogate. This simplistically means that crypto brokers facilitating payments are now subjected to the national payment system, in turn putting them under the oversight of the country’s financial regulator.
https://watcher.guru/news/russia-president-putin-signs-law-banning-crypto-payments
LOL. To ban bitcoin is to ban speech which is protected by the first amendment. We already had this in the 90s, and a ruling in favor of cryptography.
https://reason.com/video/2020/10/21/cryptowars-gilmore-zimmermann-cryptography/
I am of the not so humble opinion that the Fed/US Govt is actually behind the Crypto Craze... not because they intend to make Bitcoin the new reserve currency ... but as suggested it's the lottery for the educated classes... work hard - be smart - get rich.
We have all seen the studies of the impact of the loss of upwards mobility... it's not a good look.
Crypto is a mass psychosis that creates the perception that anything is possible still....
The alternative is to dream up a business that loses billions (scale is important) yet continues to grow (it's ok if losses outstrip the growth.... as long as you grow).
It's quite difficult to think up a business like that -- the only thing that comes to mind is selling $100 for $50.
Oh hang on .. here's one.... I will pitch this to softbank.... we raise one hundred billion dollars --- and we aim to capture the US coffee market.... by selling The Absolute Finest Coffee... for 50 cents a cup.... we open up next existing coffee houses and drive them out of business....
Once we have a monopoly we raise the price to 8 bucks! If anyone dares to challenge us we open 6 coffee houses next to them .. Ambush Capitalism!
Of course we need to give the politicians like Pelosi a heads up on this so they can front run this and veto any anti-trust bullshit.... we might have allocate some shares to key Washington contacts ... small potatoes that...
We'll lose a shitload of $$$ executing on this... but we will realize growth as we drive the small guys out...
The big boys like Starbucks will put up a fight ... but we'll just keep going back to the well and raising more $$$$.....
Eventually there will FE Fine Coffee and Starbucks standing .... a cage match!
We hire a documentary maker to film all of this (netfix series) ... culminating in Fast Eddy thrashing Howard Schultz -- (pay per view...)
And FEFC owns the market.
This is just the first draft... I'll come back with a bit more meat on the bones later... we need some Transgenders and Pregnant men involved... perhaps on the board? - to create mass appeal for the brand....
>the dollar supply sucked a great deal of those gains into centralized wealth pools whose jobs became protecting those centralized wealth pools
I am assuming that it's somehow different from BTC wealth pools, such as FTX. How exactly?
Interestingly Sam Bankman-Fried is one of the largest contributors to Biden campaign. Coincidence? I don't think so...
"I am assuming that it's somehow different from BTC wealth pools, such as FTX. How exactly?"
Because the Fed cannot control it. Nobody can.
"Interestingly Sam Bankman-Fried is one of the largest contributors to Biden campaign. Coincidence? I don't think so..."
Bitcoin is not the centralized exchanges. Noting that one of the billionaire crypto entrepreneurs "does X" is not really meaningful with respect to the conversation.
Per article, it would be appreciated to focus conversation on the content of the article.
Sam Bankman Fried is a shitcoiner. Better look at Jesse Powell of Kraken, probably one of the most based CEOs in the US right now.
> Sam Bankman Fried is a shitcoiner
Not sure exactly what you mean, so I will assume that you sort of support my point: there are people out there who hold a shitload of bitcoin and might gain a lot of power after hypebitcoinization. I do not understand Mathew's reply at this point, but hoping that he will address the issue in another post. In the meanwhile I would like to respect his wishes as the owner of this substack and not discuss the issue here.
What i wanted to say is: Sam Bankman Fried is essentially running a casino of worthless crypto tokens and uses insights from this casino (e.g. order books) to trade for his hedge fund. He has repeatedly denied the impact bitcoin has had on people. He even mingles with Bill Clinton and Tony Blair. I think he is puppet of the elite trying to profit from crypto.
This is in stark contrast to Jesse Powell, CEO of Kraken, who is a very based dude who pushes against vax mandates, woke ideology, etc. Jesse is a much better representation of the freedom values the bitcoin community hold rather than Sam and the crypto community (they are distinct communities).
I’m assuming that when you say Bitcoin, you mean the asset also traded under the ticker BTC? I value your insights, so I wanted clarification. There is good reason to think that BSV is Bitcoin, and when considering the diminishing block reward, BSV appears better prepared to handle those challenges.
BTC. The market has chosen. Even if BSV or BCH found improvements, they could be instantly air dropped in proportion to BTC onto the network, which ensures BTC dominance.
If one of those improvements isn’t raising the block size limit, then I don’t know how ~1 billion plus people can actually get on the network. I’m using a billion figuratively, in order to really start to replace nation state currencies, it’s going to have to be massive adoption, and I don’t know that a severely limited Bitcoin can accommodate adoption at that scale, even receiving first coin transactions
Lightning network, sidechains, and rollups.
Block size is relatively unimportant. The system reaches equilibrium regardless. And if there is an optimization adjustment, it will be made to the currency that has already accrued the lion's share of value. BTC can adopt improvements. It's a simple, but powerful advantage.