Financial topics

[vincecate]

On the subject of the crypto space, I am watching (with great interest) the matter of Michael Saylor, his company Microstrategy, and Bitcoin. Maybe his company blows up?

It might. Some say he gets a margin call if BTC gets to $20,000 but Saylor tweeted that it was more like $4,000. I don't know.
Buying Bitcoin on margin is foolish. It is too volatile.

[richard5za]

On a seperate subject the crypto space is looking very vulnerable

There's a lot of borrowed money against crypto; potential for a liquidation?

The thing you all don't understand is that "crypto" is not BTC.

BTC is an asset that is not a security. It has different characteristics than the rest of the "crypto space" which is why it will always be different, and also why there is such a concept as "Bitcoin Maximalist".

Cool, to my knowledge this is the USA understanding of a security:
At a basic level, a security is a financial asset or instrument that has value and can be bought, sold, or traded. Some of the most common examples of securities include stocks, bonds, options, mutual funds, and ETF shares.
Because BTC can be traded it is a security
Assets would include securities and assets such as, for example, 'goodwill' which cannot be traded by itself and therefore is not a security
Hope this clarifies.

[vincecate]

Cool, to my knowledge this is the USA understanding of a security:
At a basic level, a security is a financial asset or instrument that has value and can be bought, sold, or traded. Some of the most common examples of securities include stocks, bonds, options, mutual funds, and ETF shares.
Because BTC can be traded it is a security
Assets would include securities and assets such as, for example, 'goodwill' which cannot be traded by itself and therefore is not a security
Hope this clarifies.

Note that gold can be traded, that does not make it a security.

Most crypto qualifies as a security and should be registered and is on bad legal ground.

Bitcoin however has been classified as a commodity in the USA:

"“bitcoin and other virtual currencies are encompassed in the definition [of commodity] and properly defined as commodities, and are subject as a commodity to the applicable provisions of the [Commodity Exchange] Act and [CFTC] Regulations.10 Then Chair Heath Tarbert expanded upon this definition in October of 2019 stating that, “it is my view as Chairman of the CFTC that Ether is a commodity.”11
https://www.lexology.com/library/detail ... 85c8f6a9d7
https://www.cnbc.com/2015/09/18/bitcoin ... he-us.html
https://www.sec.gov/oiea/investor-alert ... ndstrading

[Cool Breeze]

The thing you all don't understand is that "crypto" is not BTC.

BTC is an asset that is not a security. It has different characteristics than the rest of the "crypto space" which is why it will always be different, and also why there is such a concept as "Bitcoin Maximalist".

Many of the other crypto seems to have automatic update as part of the server node software. What this means is that the guy releasing the software can make any change he wants and all the nodes switch to that new code right away. The problem is that the guy releasing the software then has total power over what the nodes do. He is a central point of failure. You can imagine someone with a gun to his head making him release software that makes the gun holder rich. Or a government telling him that he has to do something so they can monitor things or block bad people. In Bitcoin there is no automatic update. We could all use the same software we have now for the next 20 years and be just fine.

Bitcoin is simple enough and has been around long enough that the code really should be ok even if nobody patched it up
for the next 20 years. This is not true of the other new "innovative" (much more complicated) coins.

The other thing is that Bitcoin has a small blockchain, maybe 260 GB, and limited internet traffic (maybe 1/2 mbit), so a regular computer with a regular internet connection can run it fine. Some of the other ones have far larger blockchains and far larger internet traffic so regular people with regular PCs and regular internet connections can not run nodes. So Bitcoin is far more P2P than others.

With Lightning on top of Bitcoin we can handle huge numbers of transactions without increasing the blockchain size. It is a great thing.
Seems a much better solution than the others. I wrote a post about Bitcoin/Lightning: http://howfiatdies.blogspot.com/2022/04 ... tning.html

Because there is nobody any government can go after as backing Bitcoin, it is being seen as legally different than the others.
In the other cases they could get in trouble for issuing "an unlicensed security" but there seems to be no chance of arresting Satoshi
nor forcing him to send out an automatic update that shuts everything down (which could be done with others).

So Bitcoin does seems special.

Precisely. This is the reason why Bitcoin maximalists (I'm close to being that) say what they say, and believe what they believe. Fundamentally, most critics have never done their homework, or they would realize what Vince realizes (decentralized, consensus, not started by a guy or group that can manipulate it/its code/its coins, the original, proof of work, largest network). If you haven't done your homework people, read Vince's post and that last sentence three times. Bitcoin is here to stay. In tech "bubbles" the weak hands shake out and the strong survive, which is exactly what's happening right now around the entire market, but certainly in the crypto markets. When FedCoin comes out, the demand and value of BTC will skyrocket. This is just the beginning, which is funny, because trolls think it is the end. Their lack of foresight will cause them to have the greatest FOMO later, and much more hatred. At that time, I'll be laughing with my own big (BTC) bank.

[vincecate]

Precisely. This is the reason why Bitcoin maximalists (I'm close to being that) say what they say, and believe what they believe.

Bitcoin currently is 44.7% of the total market cap of all crypto. But "all crypto" includes huges amounts of stablecoins that are backed by dollars and not stand alone currencies/commodities/securities. It we exclude the stablecoins then Bitcoin is more than half the total. There is a reason for this.

https://coinmarketcap.com/

[vincecate]

Someone on Twitter points out that Friday the 13th (tomorrow) would make a fine Black Friday.

[vincecate]

PPI 11%

https://www.bls.gov/news.release/ppi.nr0.htm

[Cool Breeze]

PPI 11%

https://www.bls.gov/news.release/ppi.nr0.htm

It's transitory, Vince. Duh

[vincecate]

So the Terra/LUNA/UST blockchain has been stopped. Not sure the total loses but maybe over $10 billion. That they can just turn it off is a kind of proof that it is under central control and not distributed. Nobody could turn off Bitcoin.

They were paying people 20%. I almost feel that anyone who thought that was stable and sustainable deserves to lose their money.

[Cool Breeze]

It's interesting when weak hands all around get shaken out.

And others complained about the idea of BTC maximalism.