Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[mekberg]

Personal speculation: Elon will use the carbon capture X-Prize to launch a crypto coin.

Think BTC is a Dirty Business? Consider the Carbon Cost of a Dollar

Edit/Source Jack retweeted: https://twitter.com/milessuter/status/1364784377864073219?s=21

 

[jhm]

Isn't what makes tokens valuable is that they are believed to have value? It is a circular belief system reinforced with the "useful" boot program.

Anything that is valuable to someone else can become valuable to me. "You like baseball cards? How you like this one?"

You don't have to believe that money is inherently valuable; you just have to know that it is valuable to others.

Check this out: Cryptocurrency Prices, Charts And Market Capitalizations | CoinMarketCap

The total market cap of crypto is $1.51T. Do you any of use have to believe that any of it is inherently valuable? No. It is obvious that it is enormously valuable to a substantial community of traders.

I think the rub is that we worry that others might somehow stop valuing crypto assets at some point in the future. So we look for reasons why a thing will remain valuable even after most people cease to value it. This is the quest for something to "back" a currency. We think, If the dollar loses value, the central bank ought promise to give me a certain chunk of gold for this note. If the bank does not back this thing, I can't believe it has real value. Of course the token value of currency so outstrips whatever "backing" value there may be when the gig is up, that the backing value is financially meaningless. If you ever have to exercise whatever redemption value there may be, you've already lost enormous token value. All that backing was really good for was some sort of emotional support for the belief that the currency has real value. It may be uncomfortable to accept that the insistence on some inherent, lasting value to "back up" the token is a wish to be satisfied with magical thinking. This is why I take an almost atheistic position that the essence of token value is no inherent value. Real money has no inherent value, it is pure token value.

But the way out of disbelief is to take a more pragmatic view. Money has value because it is useful. Through repeated experience I experience value using money. I work for money, I spend money, I borrow money, I pay back debt with money, I give money as a gift, I pay taxes with money, I receive money as an inheritance, and on and on. In all these things I don't really need to believe that money has real, intrinsic, and lasting value; it simply needs to work. If I pay off a loan with money, all that matter is that my debt is settled. I won't be compelled to pay the debt over again with some other token of value.

Indeed debt solves the problem of value. Borrower and lender contractually agree that debt may be settled with certain number of tokens. Mr Mselebende wants to borrow 500 USDT and agrees to pays 600 USDT 12 months later. The lender may be satisfied that pledging 0.005 BTC is sufficient collateral. Both USDT and BTC are cryptocurrencies. It does not matter that USDT is backed by US dollars, or that BTC is just bitcoin. What matters is that the lender is satisfied that 600 USDT settles the debt and in the even of default 0.005 BTC is a sufficient limit to loss. The lender also needs to believe that the crypto contract can be executed within the blockchain. That is, the computer code that operates the blockchain ultimately adjudicates the contract. There is in fact a lot of use value being created by such a system. Within that system USDT and BTC are tokens with define value. It could enable a person in the US lend money to an unknown person in DRC with reasonable expectation of profiting.

So when we contemplate whether $1.51T in crypto market cap has value, we might ask is anyone lending on this. Actually yes. In the US there are lenders accepting BTC as collateral. Few borrowers would want to borrow BTC because it has the potential to go up in value quite rapidly. Borrowing BTC is tantamount to shorting bitcoin! So USD or USDT is a better token for paying back loans sense the value is stable for both borrower and lender. But as to collateral the potential for BTC to gain considerable value over the life of loan is a positive thing for the lender. And conversely the risk that BTC could lose value exposes the lender to more risk in the loan. So for the lender to accept the terms of the loan, she must functionally believe BTC will hold sufficient value.

If $1.51T of crypto loses value, this means lenders who accept crypto as payment or collateral will lose value. Moreover, they are locked into the this risk for the duration of credit arrangement they write. The risk of losing value over a certain term of time should get priced into the interest rates under which credit with extended. Thus, we arrive at crypto yield curves. Yield curves reflect the present value of future payments in a given token. These are standard tools for doing financing in any currency. As cryptos evolve and scale up, such tools will be increasingly applied and reported. This will make cryptos more useful for financial operations. So in the end, token value is not an abstraction, but rather there is use value in tokens that are used for financial operations. To wit, this is how financiers put bread on the table.

Simply put, use is what makes money valuable. Indeed, money is technology.

 

[lascavarian]

Why are there central banks in the first place? Do you really understand how they work? So here let me do it for you:

Seems that you are doing this for yourself really. Have at it.

Your argument is a LONG way from convincing. Bitcoin has a basket of glaring problems. It is hard to know which is the worst.

Avoiding glaring problems by playing “what aboutism” works poorly these days. You need to respond with a compelling resolution to the glaring “Satoshi” problem. It is the easy one.

Can’t these Satoshi Bitcoins just be voided? Just call the Adjudicator and wipe them off the ledger?

Or how about create 2 or more levels of Bitcoins with these Satoshi Bitcoins as level 0. See it is easy to make it up as you go.

Or how about a reverse Valarian where every block of calculation shifts value toward the Bitcoins with more transactions essentially rewarding fluidity and taxing hoarding.

 

[heltok]

Bitcoin had these problems 8 years ago and same bears were using the same arguments as for why Bitcoin would never get to the level it is today. At some point, these arguments should lose predictive power.

 

[canoemore]

Anything that is valuable to someone else can become valuable to me. "You like baseball cards? How you like this one?"

You don't have to believe that money is inherently valuable; you just have to know that it is valuable to others.

Check this out: Cryptocurrency Prices, Charts And Market Capitalizations | CoinMarketCap

The total market cap of crypto is $1.51T. Do you any of use have to believe that any of it is inherently valuable? No. It is obvious that it is enormously valuable to a substantial community of traders.

I think the rub is that we worry that others might somehow stop valuing crypto assets at some point in the future. So we look for reasons why a thing will remain valuable even after most people cease to value it. This is the quest for something to "back" a currency. We think, If the dollar loses value, the central bank ought promise to give me a certain chunk of gold for this note. If the bank does not back this thing, I can't believe it has real value. Of course the token value of currency so outstrips whatever "backing" value there may be when the gig is up, that the backing value is financially meaningless. If you ever have to exercise whatever redemption value there may be, you've already lost enormous token value. All that backing was really good for was some sort of emotional support for the belief that the currency has real value. It may be uncomfortable to accept that the insistence on some inherent, lasting value to "back up" the token is a wish to be satisfied with magical thinking. This is why I take an almost atheistic position that the essence of token value is no inherent value. Real money has no inherent value, it is pure token value.

But the way out of disbelief is to take a more pragmatic view. Money has value because it is useful. Through repeated experience I experience value using money. I work for money, I spend money, I borrow money, I pay back debt with money, I give money as a gift, I pay taxes with money, I receive money as an inheritance, and on and on. In all these things I don't really need to believe that money has real, intrinsic, and lasting value; it simply needs to work. If I pay off a loan with money, all that matter is that my debt is settled. I won't be compelled to pay the debt over again with some other token of value.

Indeed debt solves the problem of value. Borrower and lender contractually agree that debt may be settled with certain number of tokens. Mr Mselebende wants to borrow 500 USDT and agrees to pays 600 USDT 12 months later. The lender may be satisfied that pledging 0.005 BTC is sufficient collateral. Both USDT and BTC are cryptocurrencies. It does not matter that USDT is backed by US dollars, or that BTC is just bitcoin. What matters is that the lender is satisfied that 600 USDT settles the debt and in the even of default 0.005 BTC is a sufficient limit to loss. The lender also needs to believe that the crypto contract can be executed within the blockchain. That is, the computer code that operates the blockchain ultimately adjudicates the contract. There is in fact a lot of use value being created by such a system. Within that system USDT and BTC are tokens with define value. It could enable a person in the US lend money to an unknown person in DRC with reasonable expectation of profiting.

So when we contemplate whether $1.51T in crypto market cap has value, we might ask is anyone lending on this. Actually yes. In the US there are lenders accepting BTC as collateral. Few borrowers would want to borrow BTC because it has the potential to go up in value quite rapidly. Borrowing BTC is tantamount to shorting bitcoin! So USD or USDT is a better token for paying back loans sense the value is stable for both borrower and lender. But as to collateral the potential for BTC to gain considerable value over the life of loan is a positive thing for the lender. And conversely the risk that BTC could lose value exposes the lender to more risk in the loan. So for the lender to accept the terms of the loan, she must functionally believe BTC will hold sufficient value.

If $1.51T of crypto loses value, this means lenders who accept crypto as payment or collateral will lose value. Moreover, they are locked into the this risk for the duration of credit arrangement they write. The risk of losing value over a certain term of time should get priced into the interest rates under which credit with extended. Thus, we arrive at crypto yield curves. Yield curves reflect the present value of future payments in a given token. These are standard tools for doing financing in any currency. As cryptos evolve and scale up, such tools will be increasingly applied and reported. This will make cryptos more useful for financial operations. So in the end, token value is not an abstraction, but rather there is use value in tokens that are used for financial operations. To wit, this is how financiers put bread on the table.

Simply put, use is what makes money valuable. Indeed, money is technology.

I learn so much from your posts. Thanks.

 

[lascavarian]

Simply put, use is what makes money valuable. Indeed, money is technology.

Would it be incorrect to say money is an idea (a concept) technology is simply an application of an idea (delivering a percept). Usage suggests value in a particular technological implementation of an idea?

Trading is not usage but speculation - a derivative perhaps of value (not fundamental) hence the regrettable volatility, a strong case for shorting perhaps.

 

[StateoftheArt]

Seems that you are doing this for yourself really. Have at it.

Your argument is a LONG way from convincing. Bitcoin has a basket of glaring problems. It is hard to know which is the worst.

Avoiding glaring problems by playing “what aboutism” works poorly these days. You need to respond with a compelling resolution to the glaring “Satoshi” problem. It is the easy one.

Can’t these Satoshi Bitcoins just be voided? Just call the Adjudicator and wipe them off the ledger?

Or how about create 2 or more levels of Bitcoins with these Satoshi Bitcoins as level 0. See it is easy to make it up as you go.

Or how about a reverse Valarian where every block of calculation shifts value toward the Bitcoins with more transactions essentially rewarding fluidity and taxing hoarding.

I don't need to provide you with a compelling resolution and I'm certainly not trying to convince you of anything. We are all on the same side whether we agree or disagree.

I posed questions that should be asked about the current system. That they are, in fact, the same virtuous questions that make you skeptical of crypto. You do the research----I don't have time to go over every aspect of the flaws of the private central western banking system, the petrodollar and associated crimes against humanity. But more and more people are figuring this out every day and looking for alternatives to store value. Gold/Silver would be to the moon right now if it wasn't so manipulated. So we now have crypto.

The yellen's and bill gates of the world (ie, the globalists) were all out bashing BTC the other day. Pretty lame reasons why if you ask me. Very coordinated virtue signal information attack (bc at this point that is all they can do). They don't like the idea of losing control and people are waking up to this everyday as their current system is failing (which is what they want but on their terms for a great reset).

We are in the middle of a financial system great awakening. With the GME fiasco people are now just realizing the entire system is rigged up and down----and it is all connected. I'm not sure where this goes but I hope it is what the people decide is best for the people.

 

[StateoftheArt]

Bitcoin had these problems 8 years ago and same bears were using the same arguments as for why Bitcoin would never get to the level it is today. At some point, these arguments should lose predictive power.

Yes. There is some point where something like this moves from pure speculation to safer speculation. It appears we have crossed that chasm. Would it be a fair comparison (in just a fun way) to say when Tesla went from roadster 1 to model S?

 

[lascavarian]

I don't need to provide you with a compelling resolution and I'm certainly not trying to convince you of anything. We are all on the same side whether we agree or disagree.

I posed questions that should be asked about the current system. That they are, in fact, the same virtuous questions that make you skeptical of crypto. You do the research----I don't have time to go over every aspect of the flaws of the private central western banking system, the petrodollar and associated crimes against humanity. But more and more people are figuring this out every day and looking for alternatives to store value. Gold/Silver would be to the moon right now if it wasn't so manipulated. So we now have crypto.

The yellen's and bill gates of the world (ie, the globalists) were all out bashing BTC the other day. Pretty lame reasons why if you ask me. Very coordinated virtue signal information attack (bc at this point that is all they can do). They don't like the idea of losing control and people are waking up to this everyday as their current system is failing (which is what they want but on their terms for a great reset).

We are in the middle of a financial system great awakening. With the GME fiasco people are now just realizing the entire system is rigged up and down----and it is all connected. I'm not sure where this goes but I hope it is what the people decide is best for the people.

Thanks for your comments. This is a challenging topic.

Bitcoin has serious serious problems IMO. Some of the banking system has problems but access to loans (even flawed) is helpful. We are human and the worst of us corrupt whatever the better of us might try to do. Wall street is more about the worst of us, a monsters ball in many ways. Bitcoin will only make wall street far worse by its inherent design IMO.

Yellen will likely do well at the Fed. Gates is a low level computer nerd - Melinda is the mover and shaker IMO.

The problems of Bitcoin have to be fixed if there is to be a helpful digital currency. As it is now, it is hard to imagine (for me) a worse future and many people will work hard to be sure that Bitcoin in particular fails because of these flaws.

If the problems of Bitcoin are fixed I will be happy to support it. It won't happen however because it is likely already too screwed up to be fixed or it would already have happened. Without Satoshi coming out of the shadows, there is no future possible IMO. Satoshi is possibly the most corrupt entity in history watching a trillion dollars potentially go down the drain.

Elon may have the better fix. Give every arrival (traveler or by birth) on Mars 100,000 credits/coins (pick a name). Everyone starts out close to equal. Make interest a no no. Loans are fine but no interest. This can be figured out pretty easily compared to all the other problems. If it works, Earth can work out a similar system.

We are moving from a world of scarcity to something different. Bitcoin is foundationally based on scarcity - a horrific concept better left behind.

For example the TimeBank is something to examine as a counterpoint. An hour is an hour. Builds community. Levels humanity. No Satoshi problem.

Timebankingabout | TimeBanks.Org

 

[heltok]

Yes. There is some point where something like this moves from pure speculation to safer speculation. It appears we have crossed that chasm. Would it be a fair comparison (in just a fun way) to say when Tesla went from roadster 1 to model S?

Some bears still claim that Tesla will never become profitable because competition is coming. At some point any sane person needs to verify if his own internal model of the world is producing predictions that come true or not. If not, you need to go back to the drawing board, not repeat the same predictions for the future.

And when you start making predictions about the future, make sure that the same predictions in the past accurately predicted the present. If they don’t then go back to the drawing board or listen to the people making accurate predictions about the same topic in the past.


So many people get stuck in their soviet-harvard theories about how the world should work and will do their absolutely best to convince themselves that their internal model was never wrong. Jim Keller said it best, most people spend 99% of their mental processing power on defending their current beliefs, and about 98% of those are wrong.

Start at 18:00 here

 

[jhm]

Would it be incorrect to say money is an idea (a concept) technology is simply an application of an idea (delivering a percept). Usage suggests value in a particular technological implementation of an idea?

Trading is not usage but speculation - a derivative perhaps of value (not fundamental) hence the regrettable volatility, a strong case for shorting perhaps.

Originally, the Knight Templar was a religious order of knights with a mission to protect travelers on pilgrimage. Pilgrims would carry gold for their journey to give offering at holy sites. They were easy prey for robbers. Carrying gold was a good way to beaten up, and the Knights would try to defend them with there sword. But what if there was a way for the pilgrims to avoid carrying gold in the first place and thereby become an uninteresting target for robbers? Enter technological innovation knows as the traveler's check.

The Knight had treasuries with gold near the holy shrines, and they also set up treasuries in cities where a traveler my originate their pilgrimage. Using a little know technology called written language they could issue traveler's checks. The traveler would deposit a certain sum at one treasury and receive a traveler's check for that sum. At treasury near their destination, they could present the check and receive an equal sum of gold. Many travelers lives were spared because they were not carrying gold, but pieces of paper which were of little value to robbers, as they could not easily cash them.

This is an early example of cryptocurrency. It is a technology, a sophisticated system for solving a very real security problem for travelers. The check was a token designed to be valuable to rightful bearer, but worthless to all others. If the token has some inherent value, like being made of silver, it would have been less valuable for offering security to the travelers. Specifically, the check has to be worthless outside of the system the Knights had set up.

This illustrates how tokens become valuable while having no inherent value. Value is encrypted (hidden) within something that is otherwise worthless. A larger system is required to encrypt and transfer value and with sufficient controls to ensure that the value is not misappropriated, lost or duplicated along the way. All money is part of a larger system with controls so that tokens can transmit value. So all money is technology.

If you separate a token of value from the system within which it functions as money, it scarcely has any value at all. For example, if you take a knight from a chess board and put it into the middle of a game of checkers, the value of the knight is entirely dubious. How would you even use it. Yet the token value of a knight is quite certain within a game of chess. The value of a token is a property of the system as whole. The notion of usage that I wish to convey is usage of a token within a particular system. It is quite certain how a knight can be used in a game of chess, and a player generally prefers not part with their knight. The value of a chess knight is uncertain apart from a chess game. But even beyond the chess game, one might find other uses for the chess piece. You might even be able to exchange it for some other token, but that exchange value does not make a knight any more valuable in a game of chess. The value of a knight on the chess board is derived from the rules of chess. One might consider how you could play a game of chess using blockchain technology.

 

[jhm]

Yes. There is some point where something like this moves from pure speculation to safer speculation. It appears we have crossed that chasm. Would it be a fair comparison (in just a fun way) to say when Tesla went from roadster 1 to model S?

I like how Tesla trades with market cap above $500B better than how it did around $50B. (In spite of the last couple of days.)

 

[jhm]

Is anyone interested in discussing what bitcoin to could mean to Tesla's valuation or what Tesla will do with some 45k BTC? Tesla's acquisition has actually sparked my interest. I think it will be hard for most investors to understand holding bitcoin as a treasury asset could advantage Tesla. So as Tesla investor, I want to try to anticipate the value creation. We need to get an education on bitcoin in the market.

Unfortunately, few companies have done what Tesla is doing. I was thinking of holding some GBTC in my portfolio to help me experience a pure BTC play as an investor, but my broker will not permit it. So I am thinking about holding other securities with substantial BTC exposure.

Today I bought some shares of MicroStrategy (MSTR). In PR release yesterday, MSTR announced the following:

TYSONS CORNER, Va., February 24, 2021-- MicroStrategy® Incorporated (Nasdaq: MSTR) (the “Company”), the largest independent publicly-traded business intelligence company, today announced that it had purchased an additional approximately 19,452 bitcoins for approximately $1.026 billion in cash at an average price of approximately $52,765 per bitcoin, inclusive of fees and expenses.

As of February 24, 2021, the Company holds an aggregate of approximately 90,531 bitcoins, which were acquired at an aggregate purchase price of approximately $2.171 billion and an average purchase price of approximately $23,985 per bitcoin, inclusive of fees and expenses.

MicroStrategy Acquires Additional 19,452 Bitcoins for $1.026 Billion

Just prior to this acquisition, MSTR issued $1.05B in bonds with the express intent to buy BTC from the proceeds, which they have done.

Their cost for 90,531 BTC was $2.171B, and at the present price of $47,300/BTC, this hoard is worth $4.282B. How does this impact trading. BTC fell about 6% today and MSTR fell 10.5%. But today was a pretty depressing day for many stocks. Tesla was down 8%.One bad day does not tell the whole story.

What is more curious is the longer term implications for MSTR. It's current market cap is $7.0B while the value of its bitcoin is $4.3B. The company reports a mere $0.553 in equity, and here the basis of earlier BTC purchase is likely nearly offset by debt, so net would be close to zero. Thus, we can pretty much just add the market value of the BTC reserve to equity to get more realistic view of book value. The company operating an enterprise analytics business which generates around $50M income with forward looking guidance to $70M to $90M. So the value of the business looks to be maybe $2B. So why is MicroStrategy getting a $7B market valuation? Its got to be the big, beautiful BTC assets. This is Jack and the Bean Stalk with magic beans. It sense that their whole corporate focus has turned to BTC. Actually, their analytics business can focus on serving the bitcoin market. Not only can this give them a niche to serve, but it actually can boost the status of bitcoin. It's not surprising to see its CEO Michael Saylor boost bitcoin.

One way to understand the value that crypto is actually creating is consider the talent that is attracted to serve crypto. Talent is the essential advantage of technology. Technologies that attract talent will likely flourish. In this case, we see a whole company of developers get drawn in to bitcoin. What will MSTR be worth? They have hitched their wagon to bitcoin. So we shall see how much they can make of it.

Getting back to Elon Musk, he is clearly eager to get into the crypto game. Few can attract the talent that Musk can. In particular, I think the AI capabilities of Tesla could become trained on crypto. Crypto assets seem tailor made for AI.

 

[mekberg]

Is anyone interested in discussing what bitcoin to could mean to Tesla's valuation or what Tesla will do with some 45k BTC? Tesla's acquisition has actually sparked my interest. I think it will be hard for most investors to understand holding bitcoin as a treasury asset could advantage Tesla. So as Tesla investor, I want to try to anticipate the value creation. We need to get an education on bitcoin in the market.

Unfortunately, few companies have done what Tesla is doing. I was thinking of holding some GBTC in my portfolio to help me experience a pure BTC play as an investor, but my broker will not permit it. So I am thinking about holding other securities with substantial BTC exposure.

Today I bought some shares of MicroStrategy (MSTR). In PR release yesterday, MSTR announced the following:

MicroStrategy Acquires Additional 19,452 Bitcoins for $1.026 Billion

Just prior to this acquisition, MSTR issued $1.05B in bonds with the express intent to buy BTC from the proceeds, which they have done.

Their cost for 90,531 BTC was $2.171B, and at the present price of $47,300/BTC, this hoard is worth $4.282B. How does this impact trading. BTC fell about 6% today and MSTR fell 10.5%. But today was a pretty depressing day for many stocks. Tesla was down 8%.One bad day does not tell the whole story.

What is more curious is the longer term implications for MSTR. It's current market cap is $7.0B while the value of its bitcoin is $4.3B. The company reports a mere $0.553 in equity, and here the basis of earlier BTC purchase is likely nearly offset by debt, so net would be close to zero. Thus, we can pretty much just add the market value of the BTC reserve to equity to get more realistic view of book value. The company operating an enterprise analytics business which generates around $50M income with forward looking guidance to $70M to $90M. So the value of the business looks to be maybe $2B. So why is MicroStrategy getting a $7B market valuation? Its got to be the big, beautiful BTC assets. This is Jack and the Bean Stalk with magic beans. It sense that their whole corporate focus has turned to BTC. Actually, their analytics business can focus on serving the bitcoin market. Not only can this give them a niche to serve, but it actually can boost the status of bitcoin. It's not surprising to see its CEO Michael Saylor boost bitcoin.

One way to understand the value that crypto is actually creating is consider the talent that is attracted to serve crypto. Talent is the essential advantage of technology. Technologies that attract talent will likely flourish. In this case, we see a whole company of developers get drawn in to bitcoin. What will MSTR be worth? They have hitched their wagon to bitcoin. So we shall see how much they can make of it.

Getting back to Elon Musk, he is clearly eager to get into the crypto game. Few can attract the talent that Musk can. In particular, I think the AI capabilities of Tesla could become trained on crypto. Crypto assets seem tailor made for AI.

Yup. Bought some MSTR back in December in an IRA.

 

[lascavarian]

Is anyone interested in discussing what bitcoin to could mean to Tesla's valuation or what Tesla will do with some 45k BTC?

It has sparked my interest.

The purchase of Bitcoin makes no sense to me. I can take Euros for payment if I want. I don't need to own Euros to accept them. Most/all global companies accept all currencies routinely and they also hedge currencies to remove currency risk. There is a slight effort involved but really taxes are a much larger issue as I see it.

So assuming payment is not an issue or reason for the Bitcoin purchase, then what is?

There "might" be a benefit in supply chain but I think it may be more about global business preferences.

This first reason I would think is China. There may be some kind of advantage in China. China could force things to happen if it advantages their (state controlled I presume) banking empire. There could be huge advantages to their powerful banking system if they required interest payments in Bitcoin. This could vastly enhance the power of the China over the world.

China uses cheap labor to bring the worlds economies to their door as Japan once did IMO. Without going into politics, China holds a lot of debt from consumer countries. Recent low interest rates along with other issues like automation and AI development tend to diminish the value of cheap labor and shifting the focus onto the debt they hold as a source of power.

Consumer nations issue debt and then benefit when it becomes cheap to borrow as it is now. A potential new wave of inflation also diminishes the value of debt. Part of the US plan is to inflate its way out of enormous Chinese debt. What is China to do?

One plan would be to dominate Bitcoin both in mining/ownership and adoption. Bitcoin inflates the value of their debt because Bitcoin, in it's present existence, lacks a method of inflation which is vital in a currency (a seperate topic). Removing inflation as a threat from China's existing debt tentacles is a huge benefit to the rich and powerful elites of China.

What does this have to do for Tesla?

For Tesla to buy Bitcoin may grease the skids for future production plans in China in a big way. It is China friendly in an open and supportive way and show inside understanding.

The US is already researching a digital dollar the features of which remains a mystery. I suspect the digital dollar will have a key feature that mutes any benefits of Bitcoin to China. The US holds it cards hidden for now.

If Tesla is granted further production facilities in China then the loss of the value of the Bitcoin purchase will be nil and perhaps even a wedge for further concessions. Such as, "Here take these Bitcoins as payment." Or more creative uses.

Another potential use case for Bitcoin is India.

 

[lascavarian]

This is an early example of cryptocurrency. It is a technology, a sophisticated system for solving a very real security problem for travelers.

Great topic!

I guess I would look at the Templars as an early implementation of a trusted system. The components were authority from a highly centralized authority - the Catholic Church, usage of Cryptography, ultimate use of a brittle form of human power - fanaticism to the death. Together they were able to project power and security over a lot of territory at great profit.

They were able to use their armored knights to move gold and valuables between their various armories. They used cryptography as a kind of ATM. At each castle/armory stop, the wealthy could produce/update their cryptographic script and make a local withdrawal for the present needs of their often large traveling parties (ATM withdrawal sort of). The Templars had to maintain control over the code, move gold as required and assure proper conduct through their travel routes.

The problem for the Templars was the wealth they accumulated (not by royal blood line). It seems jealousy was fatal. This is an important lesson.

I have studied the Templars mostly from a devotional standpoint (consider that Priests were rationalized to kill in battle as long as they killed while in the correct devotional mood or state of mind) but the success of their "system" is impressive. Both banker and Sheriff of sorts. How is a dispute settled when the other side is Priest, banker and sheriff?

Bitcoin has authority but it is not human. Perhaps a plus, but also brittle and unbending and lacking remorse or compassion.

 

[jhm]

Yup. Bought some MSTR back in December in an IRA.

Very nice. I'd love to read your thoughts on the company and its valuation.

 

[durkie]

In particular, I think the AI capabilities of Tesla could become trained on crypto. Crypto assets seem tailor made for AI.

I'm curious what you mean by this -- are you talking about development of a machine learning-driven shortcut in the mining algorithms?

 

[Johan]

I'm curious what you mean by this -- are you talking about development of a machine learning-driven shortcut in the mining algorithms?

I'm not @jhm but if he means that Tesla's AI (Dojo) could somehow find a more clever or effective way of mining BTC then... no. At least that would be the most significant discovery in cryptography in the last 1-2 decades. Secure hash functions are designed to destroy all statistical relationships between their input bits and their output bits - such as SHA256 which is what Bitcoin is based around.

 

[durkie]

I'm not @jhm but if he means that Tesla's AI (Dojo) could somehow find a more clever or effective way of mining BTC then... no. At least that would be the most significant discovery in cryptography in the last 1-2 decades. Secure hash functions are designed to destroy all statistical relationships between their input bits and their output bits - such as SHA256 which is what Bitcoin is based around.

That was my thought as well! Which is why I'm curious what he's thinking