Bitcoin on the rise

[WFJ]

WFJ, you talk as if there was "we" and the "others". As if HODLers, crypto bros, or whatever you fancy to call them were outsiders.

However, I think you are well aware that some participants in this forum, in this community, hold crypto assets.

So, what is the purpose of this flurry of disparaging posts? Is this meant to be insulting? Entertaining? To whom?

My hope was that somebody (at least one person) would develop critical thinking skills and understand what a crypto actually represented, this was my delusion. Next time I will just cheerlead on the way up, further fueling the carnage, mindlessly repeat Buy more, leverage, diamond hands, Wall Street is here to help crypto. Logic and reason are no competition to slick TV ads staring Matt Damon and LeBron James. I grew up in areas with rampant gambling and a lot of cults, post-2020 crypto pitches were a combination of both and will end similarly. Besides criminal conmen based in 3rd world countries, nobody will retire early on crypto, nobody.

Below remind me of the crypto deluge.

https://www.youtube.com/watch?v=FpO0OV4mfvo

https://www.youtube.com/watch?v=6x_wxLGYUIc

[Jean]

More people already retired early trough crypto than changed there mined trough insult.

But your longer post detailling your story was very informative. I know understand your objection better, and agree with most of them.
Our main disagreement, is that i think there is already a killer app for btc. And i can see myself needing this application in the future.
I don't think anyone here is putting all his money on crypto.

[Mister Imperceptible]

I know at least one person who has lost their life savings in FTX and another who lost a significant sum that was on BlockFi.

FTX investor Sequoia removed its glowing 13,000-word profile of Sam Bankman-Fried and replaced it with somber note after its investment cratered to $0

Dan Oliver wrote up a post-mortem that noted Sequoia’s previous enthusiasm:

Nothing is a sure bet in crypto, but just the possibility that FTX could join—or even eclipse—the big four of American banking (JPMorgan Chase, Bank of America, Wells Fargo and Citibank) means it’s already valued at $32 billion. SBF himself has amassed more wealth in a shorter period of time than anyone else, ever. . . .
Though he earned top marks [at school], he kept to himself, spending most of his free time playing computer games (StarCraft, League of Legends) and a trading card game, Magic: The Gathering. . . .
Michelle Bailhe, a young gun at Sequoia Capital admits . . . “I thought they were just minting money and had absolutely no need for investors.” Learning otherwise, they quickly contacted SBF and organized a last- minute Zoom call between him and the partners at Sequoia.... Ramnik Arora, FTX’s head of product and another ex-Facebook engineer, remembers the meeting clearly: “We’re getting all these questions from Sequoia toward the end. He’s absolutely fantastic.” Arora locks eyes with me, and I am mesmerized. Arora is intense—calling to mind a Bollywood version of Adrian Brody. “Unbelievably fantastic,” he says, shaking his head.
Bailhe remembers it the same way: “We had a great meeting with Sam, but the last question, which I remember Alfred asking, was, ‘So, everything you’re building is great, but what is your long-term vision for FTX?’”
That’s when SBF told Sequoia about the so-called super-app: “I want FTX to be a place where you can do anything you want with your next dollar. You can buy bitcoin. You can send money in whatever currency to any friend anywhere in the world. You can buy a banana. You can do anything you want with your money from inside FTX.”
Suddenly, the chat window on Sequoia’s side of the Zoom lights up with partners freaking out.
“I LOVE THIS FOUNDER,” typed one partner. “I am a 10 out of 10,” pinged another.
“YES!!!” exclaimed a third.
What Sequoia was reacting to was the scale of SBF’s vision. It wasn’t a story about how we might use fintech in the future, or crypto, or a new kind of bank. It was a vision about the future of money itself—with a total addressable market of every person on the entire planet.
“I sit ten feet from him, and I walked over, thinking, Oh, shit, that was really good,” remembers Arora. “And it turns out that that fucker was playing League of Legends through the entire meeting.”
“We were incredibly impressed,” Bailhe says. “It was one of those your- hair-is-blown-back type of meetings.”

Celebrity promoters are now being sued:
https://www.reuters.com/legal/ftx-found ... 022-11-16/

Remember this Super Bowl commercial? Aged like a special wine it did:
https://m.youtube.com/watch?v=BH5-rSxilxo

[ertyu]

I was never into crypto and learned about this when it started unravelling but it is absolutely fascinating. The assessment a couple of days ago was that while this will go systemic within crypto, it will not breach containment into the mainstream financial system. now that i hear of more and more dominos falling, im curious if that would turn out to be right. so far, while it does sound like quite a few tradfi investors have been burned, the amounts have not been collosal, but that still remains to be seen.

[Slevin]

The level of corruption within the whole thing (which could include corruption in the FTC, who knew he was doing way beyond legal things with the company and chose to do nothing possibly due to close ties with the FTX CEO) is beyond incredible. The cold fusion doc is here if you want some edutainment about it: https://youtu.be/20BEJouWBgY .

SBF mints FTT from FTX. Then he transfers ownership of a bunch of it to Alameda Research. Following that; he wash trades FTT, a coin with basically no liquidity / sales volume, to pin it at a high price. Now Alameda research has 20 billion of crypto, or so they claim. Problem is, they can’t sell any of it without crashing the value to near zero because it was never really worth what they claim it is worth. Then, Alameda research takes out a 10 billion dollar loan from FTX based on their available “funds”, which nobody in their right mind would do because of exactly the reasons above reason, but SBF owns the bank, so he can do it. Thus, SBF transfers all of his actual investors money back over to Alameda research to prop up all his failing crypto betting / trading.

Eventually, someone working under Changpeng Zhao, owner of binance, finds this out. They have a huge stake in FTT, and FTX is a leading opponent. Zhao realizes he’s sitting on a house of confidence man cards, so his 21% stake in FTT is actually worthless, and decides that taking down SBF is worth ruining the fake billions the FTT is worth. Zhao liquidates the FTT, and the value plummets, making FTX and alameda research both effectively bankrupt. Then people start putting together the pieces of what actually happened, but it’s too late. 50 billion dollars destroyed, 130 something dependent companies destroyed, thousands of people lose their life savings, including a teachers union in Canada, and others who had no idea a large portion of their money was even in FTX.

[bostonimproper]

It’ll be annoying as lawmakers learn all the wrong lessons from this incident (the problem is in lack of CeFi regulation, not DeFi), but what can you do.

For what it’s worth, based on thread title, I don’t really see how this is all that relevant to Bitcoin though?

[jacob]

It’ll be annoying as lawmakers learn all the wrong lessons from this incident (the problem is in lack of CeFi regulation, not DeFi), but what can you do.

The problem with "wild west"-speculation type securities is that law makers and enforcement agencies are always playing catch up. And there will always be types looking to profit from strategies that should obviously be illegal but isn't yet.

When working for corporate finance, the message from the annual ethics briefing was "don't do anything you can't justify as an honest behavior in case it ever gets investigated". This "justifying as honest" is a good filter but some people do lack it.

[OutOfTheBlue]

Bitcoin and Ethereum are considered as non securities (commodities) in the US.

To be sure, this is a hell of a shitshow.

But regulation is not only about protecting investors, it is also about control. I am not convinced the SEC has the retail investors interest as its first priority.

---

I like this quote from the outro of a recent video by CoinBureau on the FTX debacle.

Crypto will survive, however grim things are going to get from here. It's going to be painful and not every project will make it. But remember this is sadly yet another instance of a centralized crypto platform going under due to mismanagement, incompetence and quite possibily criminality. But blocks are still being produced on blockchains and great projects are still being built. If you believe in the technology, then you must believe that this will eventually pass. But we all must push for change because we can't let this sort of stuff keep happening time and time again.

Bitcoin was invented because Satoshi saw how broken our current financial system was and still is, but the crypto industry as a whole has forgotten this and has moved ever closed to what Satoshi wished to destroy. Central entities misusing customer funds, opaque financial institutions doing shady stuff with unfathomable amounts of other people's money, incompetent rich dudes holding all the power with none of the oversight... God damn it, none of this has any place in crypto, and yet here we are. Only we can get our house in order and that process has to start today.

[white belt]

@OutOfTheBlue

Isn't this just another case of the Sociopaths running a subculture into the ground? Jacob has posted this article before that sums up the dynamic: https://meaningness.com/geeks-mops-sociopaths

Since this is not the first crypto nuclear winter, I have a feeling this is not the first iteration of crypto being "exploited against Satoshi's original intentions." Believe it or not, most actors are not operating from a libertarian perspective (only geeks are). The irony is the next iteration of blockchain technology will likely be utilized by central bank technocrats to more tightly control the monetary system.

[OutOfTheBlue]

@OutOfTheBlue

Isn't this just another case of the Sociopaths running a subculture into the ground? Jacob has posted this article before that sums up the dynamic: https://meaningness.com/geeks-mops-sociopaths

Funny, I have kept thinking of this article/paradigm re this recent development. Could well be that.

Since this is not the first crypto nuclear winter, I have a feeling this is not the first iteration of crypto being "exploited against Satoshi's original intentions." Believe it or not, most actors are not operating from a libertarian perspective (only geeks are). The irony is the next iteration of blockchain technology will likely be utilized by central bank technocrats to more tightly control the monetary system.

I am afraid so, too. CBDC's are coming. Decentralization rather than market adoption might become more relevant then. There are many actors in the game, and the outcome has yet to be decided...

[Slevin]

I am afraid so, too. CBDC's are coming. Decentralization rather than market adoption might become more relevant then. There are many actors in the game, and the outcome has yet to be decided...

like this?

https://www.reuters.com/markets/currenc ... 022-11-15/

[OutOfTheBlue]

like this?

https://www.reuters.com/markets/currenc ... 022-11-15/

I understand this to be a test run of a wholesale central bank digital currency, aimed at financial institutions.

My concerns are more with retail CBDCs aimed at the general public.

CoinBureau has dedicated some good videos on the subject.

[jacob]

But regulation is not only about protecting investors, it is also about control. I am not convinced the SEC has the retail investors interest as its first priority.

The SEC mission statement is to "protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation". I'd say the priority is on the middle one. The other two follow from that incidentally. Investors are basically protected from unfair trading practices ... but they're not protected from their own stupidity. They can trust the system they're buying from/in ... but they have to do their own due diligence in terms of what they're buying. E.g. if investor buys 100sh of XYZ, they really will get the national best price at the time (it's illegal for a broker to sell at $100 if another broker is asking $99). However, XYZ might go bankrupt tomorrow and that's the investor's problem.

It's very hard to lay down rules that does all this, because there will always be people who are looking to exploit loopholes in the rules for an advantage. So some of the bleeding edge regulation relies more on the idea of an "honest society", which is kinda the opposite of the "wild west", than navigating the rules. IOW, if someone comes across a strategy that is "so good it should be illegal", the SEC wants people to avoid using it rather than "get it while the going is good". Indeed, people who do the latter might actually end up in [enforcement] trouble retroactively (which is different than the normal legal system).

[Crusader]

Could you elaborate? I'm familiar with equity transaction fees being negative, positive, ... and comprised of several different intermediates. (This is how retailers get free trades in return for providing liquidity.) However, the idea of fees delaying transactions is new to me. It suggests a negotiated time-cost. In the old-school market, this is already settled as T+a few days. Does crypto consider settling time fluid?

See this:
https://help.coinbase.com/en/wallet/sen ... miner-fees

You can adjust your fees based on how quickly you want your transaction to complete. This is because the miners have a choice about what transaction they want to process, and they choose the highest fee first.

(this doesn't seem very scalable to me)

[WFJ]

Why would US regulators be responsible for individuals buying collectibles? Will the SEC reimburse me for buying Sammy Sosa rookie cards in 1999?

The entire crypto market losses are less than market cap losses of AMZN, META, NFLX, so meaningless as far as the financial system. ZIRP created crypto and a positive real interest rate will destroy it (maybe in 5-10 years).

[poleo]

This has indeed turned into an interesting thread!

I haven't been able to read everything, but glancing through the posts there seems to be a lot of the good old "bitcoin/crypto is the same as tulips/trading cards/whatever speculative crap" going on. This reminds me of a useful quote by Satoshi Nakamoto:

"If you don't believe me or don't get it, I don't have time to try to convince you, sorry."

Or maybe I am missing the mark here, I don't know. What I'd like to discuss is the future of bitcoin rather than "is crypto stupid" or "oh my god an exchange with insane practices imploded - bitcoin is dead!". And bitcoin mustn't be equated with crypto, in much the same way that a pianist is a musician, but not all musicians are pianists. Let's leave the discussion of other cryptos to some other place, and concentrate on bitcoin.

The next halving is going to happen in (probably first half of) 2024. The wild bull runs have correlated with earlier halvings. Now this is only interesting if looking to speculate in short term large gains. I think the probability of Elon Musk and other whales looking to make some gambler's moves like last time is higher than zero. I am considering placing a bet myself.

As far as I can see, the fundamentals of bitcoin haven't changed at all, and the whole FTX debacle is just another example of noise in the crypto market like so many times before. It has no bearing on bitcoin, its inherent technology, function and use cases - in my judgement. Conflicting opinions encouraged! To me this means that as a long term investment bitcoin is just as (un-)attractive as it has always been - indeed depending on your beliefs.

So - what do you reckon? Go crazy and place a bet on another halving related wild west run? Continue buying BTC steadily, perhaps cost averaging?

Personally, as I may have hinted at, I am not really very interested in the whole "zomg Bitcoins are worthless tho", even if I realize it is outside my power to prevent such replies.

[ertyu]

So - what do you reckon? Go crazy and place a bet on another halving related wild west run? Continue buying BTC steadily, perhaps cost averaging?

Disclaimer: I have 0 stakes in this debate - owning bitcoin is way way way beyond my personal risk tolerance, so I leave it to the people who are temperamentally suited.

That said: the halvings etc. are half the picture. Bitcoin's price is also corellated with overall liquidity levels -- I've heard it said that Bitcoin moves as the NASDAQ. So to decide whether to place this bet, think not just about the upcoming halving but also about whether you think this halving will happen in conditions of abundant liquidity or not. You need a prediction of when the halving will happen, yes -- and then you need a prediction of how much money will be sloshing in the financial system and that time and whether the "animal spirits" at the time will be risk-on or risk-off. In other words, how likely will lenders be to lend, and how risk-averse will investors feel at this time overall?

If you think, as many podcast talking heads do, that the beginning of 2024 will be when the lags from the interest rate increases we've had already will hit the system, then would it be possible that this halving occurs in risk-off conditions? If so, how will this impact your bet?

[Humanofearth]

Bailing out banks with taxpayer’s money created BTC. The genesis block reads: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”.


What is the value of decentralized, unseizable digital property? Very secure, very stable, very consistent block times, very resistant to change (for better or worse). US seizing Russia’s treasuries or Canada freezing the truckers’ supporters banks is more reason to hold Bitcoin than ZIRP.

The bet is that all other forms of property rely on another entity to guarantee your property is yours and taken to an extreme, it made me realize the money in banks is in my mine but I don’t have final say over its movement. Same with real estate, stocks, bonds. In 20 years, BTC is the only currency I expect to appreciate in value relative to US M2 growth. Even the S&P fails to do this. So for me, over a 4 year time frame, it is lower risk with higher return than anything else.

The hash rate is increasing year over year, the network is transparent and individually verifiable, you can even run your own node with a Pi4. Pumping out blocks like clockwork, 10 minute settlement time is quick compared to fiat, which often takes a week and has much higher fees. Lightning network delays final settlement while increasing centralization in exchange for instant, free debit style transactions so this is useful in Salvador, where it’s already in use as legal tender. It’s literally the most direct control I’ve ever had over money.

I expected to put a tiny bit in but after my first experience creating a seed, engraving it, withdrawing to my private key controlled address, moving it around, I immediately grasped the leap in utility and went all in. The value of this is much higher than any other fiat.

[jacob]

In related NFT news, Jack Dorsey's first tweet, which was sold for $2.9M, is now valued at $3.77, which makes more sense (to me).

https://twitter.com/Stocktwits/status/1 ... 2756116487

[Scott 2]

I know there were some greater fools, but weren't NFT prices due to unregulated market manipulation and money laundering? Looks like the crypto community started getting public on it around a year ago:

https://blog.chainalysis.com/reports/20 ... aundering/