Cryptocurrency

CyCrazy

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I have skimmed this thread today, I have no dog in the fight I don't believe in Bitcoin but whatever each to their own. Pretty sure Justanothertimeline and Cybri are in deep state with Bitcoin.
 
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ricochet

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bitcoin solves the problem of trust. No need for a third party like a bank or any other rails.

This reminds of something I've wondered about. If you had a heart attack tomorrow and died how would beneficiaries get your crypto? I've heard stories of people losing their keys and basically their money is gone. Do you have something setup with a lawyer as part of a will or something? If you do, you have some need for a trusted third party. If not then is your money just gone? Personally I have a lot of money at Vanguard but I trust that if something happens to me my wife can still get the money, or if something happened to both of us it would still get distributed out.
 
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iowastatefan1929

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After the Luna crash I think I solved the stablecoin problem in my head. Everyone pays the same price, but the price changes. Indirectly tied to the local currency.
 

cyfanbr

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Which is it? Can Bitcoin be divided indefinitely, or is there a limited supply? It can't be both. Not necessarily asking you to answer, but it's something that has always bothered me.

There are a finite number of gold atoms that humans can extract - that's truly scarce. If you can always sell someone a smaller fraction of bitcoin, then it's not really limited and the "advantages" of scarcity don't apply. Someone said earlier that "there are 100M says per bitcoin," implying they can always be divided into smaller and smaller increments. If they continually increase in value, especially exponentially as the bros claim, eventually that smallest unit becomes too expensive for people to obtain. That scarcity is how they gain value. But if they can always be divides so everyone can have access, then there is no scarcity and no mechanism for value to go up indefinitely.
You might be over complicating it. There are only 21m bitcoin, but each bitcoin is composed of 100m sats, and as far as I know it cannot be divided any further than that. Just like a dollar has 100 cents in it.
 
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cyfanbr

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No - you and I could arrange a private loan agreement today without involving banks (well, without the bank facilitating the loan). There are even ways currently to arrange these kinds of direct loans to strangers using traditional non-blockchain technology through various websites and charities. That is not innovative to me, I'm not sure if it even qualifies as an incremental improvement at least from my perspective.



It's true, it's a little more complicated than him being booted off the main podcast since he does have his spinoff show. And maybe he was getting burnt out on doing it in general. But he couldn't stay in the main show because he just isn't willing to engage with the normal market for the time being. It was definitely starting to turn me off. Though his replacement Trey Lockerbee is honestly maybe worse in a totally different way, I don't even listen to most episodes anymore. At least with Preston he brought in (usually) interesting guests. I have listened to Lyn Alden when she's been a guest on their show and she has seemed a lot more pragmatic - acknowledging the pros and cons with a more critical eye.

In terms of the M2 money supply, I think it's a bad metric because it's not measuring inflation. It's measuring money supply. I think on that show, they get lost as to what inflation/deflation metrics are intended to capture which is the change in cost of living for the majority of Americans. That's why the CPI is the most widely used metric - it's a basket of the types of things that most people need and want to buy. The M2 money supply can contribute to inflation but it's not a direct measure of it. There's a separate argument to be made (imo) regarding stock market evaluations and pricing, which I think has more correlation to M2 and easy money policies. But I also feel like the way Preston and others like him spin it is not right. Preston's take seems to be that these are the foolish actions of an incompetent Fed who never suspected there would be a downside. And that the Fed is selectively manipulating the CPI to hide the truth of real inflation from us so they and all their buddies can stay fat dumb and happy. My take is that these are calculated actions taken by the Fed knowing the consequences of what they did. That the Fed is not manipulating CPI or trying to hide real inflation and are genuinely doing their best to manage monetary policy for the better of the country and the world.
Yea, I don’t think the FED is malicious either and agree that they are trying to do the best they can, but they are in a game that I don’t see how they can win. That’s a job that I have no idea why anyone would ever want to do.

On inflation, I do think CPI tends to be biased towards the lower side. Once again due to bad incentives. There are a lot of government payments tied to it. Not saying it is a fraud either, just that it likely is on the conservative end of the spectrum.
 

cyfanbr

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This reminds of something I've wondered about. If you had a heart attack tomorrow and died how would beneficiaries get your crypto? I've heard stories of people losing their keys and basically their money is gone. Do you have something setup with a lawyer as part of a will or something? If you do, you have some need for a trusted third party. If not then is your money just gone? Personally I have a lot of money at Vanguard but I trust that if something happens to me my wife can still get the money, or if something happened to both of us it would still get distributed out.
I was talking to a couple people recently and they said this was a big topic of discussion during the bitcoin conference last month. I haven’t done much research, but I believe there is no great solution right now, but sounds like there is some work ongoing. Currently you would need to share your seed phrase with your loved ones either by telling it to them, or by letting them know where it is stored.
 

besserheimerphat

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You might be over complicating it. There are only 21m bitcoin, but each bitcoin is composed of 100m sats, and as far as I know it cannot be divided any further than that. Just like a dollar has 100 cents in it.
Right.

21M BTC X 100M Satoshis/BTC = 2.1x10^15 Satoshis

Currently about $2,270b in circulation X 100 pennies/$ = 2.27x10^14 pennies

So there are more Satoshis than pennies, and will be for quite some time. How is that "scarce?" And if it's not scarce, how does it store/gain value?

And if [edited to add "if"] your argument is that eventually it will be scarce relative to the dollar, then it will gain value - potentially to the point that the poor cannot afford a single Satoshi. So they are barred from this technology that is intended to empower them.
 
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Thanks for engaging in a polite and helpful discussion. After reading your replies I think we actually agree on quite a bit, but not on everything of course, and that’s ok.

Speculative money has definitely gone into crypto and other asseara as you pointed it out. Now with financial conditions tightening, some of that money is getting pulled out, which overall I think it is a positive thing.

Regarding the on going correction, it is a start, but ultimately I believe the FED and the government will step in if things get uglier. I get it, that’s their incentive, but the can will just continue to get kicked down the road until the no longer can. Ray Dalio had a great video back in 2013, explaining how the economy works (I will link below if you are interested), but that’s not how things have worked since 2008.

I think it is still early and am hopeful that bitcoin specifically might still do good things for society. Lightning network thus far seems to be a successful link atino built on top of bitcoin. Believe their first international roll-out was in Salvador where a majority of people are unbanked, but almost everyone has cellphones, and lightning can facilitate those people become part of the financial system. Few weeks back they launched in Argentina, which is another country that suffered crazy levels of inflation.

Ultimately, my recommendation for most people is make a small allocation that won’t make you lose any sleep if it went to zero, then as you learn you can increase your position if your conviction changes.

Yup - I agree with everything he says. I can’t see where cryptocurrency would help improve the situation, but I look forward to reading your response.
 

cyfanbr

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Right.

21M BTC X 100M Satoshis/BTC = 2.1x10^15 Satoshis

Currently about $2,270b in circulation X 100 pennies/$ = 2.27x10^14 pennies

So there are more Satoshis than pennies, and will be for quite some time. How is that "scarce?" And if it's not scarce, how does it store/gain value?

And if [edited to add "if"] your argument is that eventually it will be scarce relative to the dollar, then it will gain value - potentially to the point that the poor cannot afford a single Satoshi. So they are barred from this technology that is intended to empower them.
If the price of bitcoin increases to the point of any person cannot afford a satoshi, then im promising you guys that ISU will have the best NIL deals in the country!!!!

Jokes aside, you are thinking of bitcoin versus another currency value. If it gets to that point bitcoin value will be a bitcoin as it will be the unit of account.

Ok, I lied, one more joke, if you have pizza you can cut into as many slices as you want, but ultimately you still have just one pizza.
 

JustAnotherTimeline

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What does a permissionless loan look like then? If I loan money to you in a private agreement, what permissions are required that would not be required in the system you're talking about?

How can any loan pay a yield to the borrower? A loan is a fundamental concept - A agrees to give money to B, B agrees to pay the money back over time with interest. If B doesn't have to pay interest, it's not a loan, it's a gift. B could invest the money loaned by A and earn a yield on that money, but that is not part of the loan.

In terms of high fees, etc - I wouldn't doubt that those fees may be high. There is a reason for it - there is a high risk in those types of situations that one party or another will not fulfill their end of the bargain.

I spent a little time on the Curve.fi site looking into what it is. It does not appear to be a loan at all. It seems like a high risk unregulated bank, where the "bank manager" (in this case the largest contributors to the pool?) uses the funds to speculate on arbitrage between different crypto exchanges which can earn the users a return similar to the way a bank pays interest on a savings account. Seems like it's essentially a crypto credit union savings account. I guess in exchange for the very high risk relative to a credit union, you get the ability to make permissionless trades. It doesn't seem (unless I'm completely misunderstanding it) that it pays yield to the borrower - it pays yield to the lender who supplied the liquidity in a certain stable coin (aka loan) and the borrower pays that in the penalty for "overdrawing" a certain type of stable coin but makes it back in their investment.

I still wouldn't call it innovative - it's interesting that someone has done this but it's the same concept as something like a credit union where individuals come together to pool money and avoid fees, etc charged by big banks. Maybe call it unregulated cooperative banking. But at the end of the day, it's still translating a concept that already exists into the crypto world.

Permissionless meaning no kyc, no credit check, just a wallet with funds to deposit. I have used curve before. The apy is dynamic depending several variables. At one point I received more yield to borrow Matic then I paid in interest. It all depends on supply and demand of particular assets, and also any incentives available.

Actually your comparison to an unregulated bank is about right. Basically, the smart contract is the bank. As such, participants earn the yield as opposed to a bank or to support the infrastructure of a credit union.
 

JustAnotherTimeline

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This reminds of something I've wondered about. If you had a heart attack tomorrow and died how would beneficiaries get your crypto? I've heard stories of people losing their keys and basically their money is gone. Do you have something setup with a lawyer as part of a will or something? If you do, you have some need for a trusted third party. If not then is your money just gone? Personally I have a lot of money at Vanguard but I trust that if something happens to me my wife can still get the money, or if something happened to both of us it would still get distributed out.

Just share the keys with loved ones. Or, put them in a safety deposit box or something.

But you're right, if people aren't responsible the.funds are inaccessible. It's the downside of self custody.
 

JustAnotherTimeline

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I have skimmed this thread today, I have no dog in the fight I don't believe in Bitcoin but whatever each to their own. Pretty sure Justanothertimeline and Cybri are in deep state with Bitcoin.

If there is such a thing, I wish I were.

Contrary to what some here might think, I have far more invested in equities then I do crypto. I just find crypto more interesting.
 
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