Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[OrthoSurg]

And I thought I dropped all my Bitcoin and Ethereum at the lowest the day the Ukrainian war started in February to buy more TSLA at 650 after. Little did I know it was the right move to do. Transferred 100k to my brockerage account and waiting for my last buy order of 600 shares to hit then I will allow the stock to rebound and a massive market rally once Powell announces the rate hike will be 0.50% even if it should be 0.75%. I don’t want to see 540, I don’t want my eyes to bleed just yet.

I hope Elon and Zach decided to drop all their Bitcoin the same day I did.

 

[heltok]

Personally I’m hoping the craptastic moronic BTC investment gets as close to zero as possible before the end of the month so that giant suckage of an unnecessary risk is removed as a future uncertainty on earnings.

Bitcoin crashing is so overblown. Tesla bought bitcoin for $1.5B, sold ~$250M, now hold 43,200BTC worth ~930M. So in total they have lost ~$320M on their investment. That’s like 0.05% of their market cap, ie the Bitcoin buying decision should lower the stock price by 0.05%. That’s about how much we should care about Bitcoin’s crash. FSD how much?

https://twitter.com/x/status/1536559703240605697

 

[Singuy]

Bitcoin crashing is so overblown. Tesla bought bitcoin for $1.5B, sold ~$250M, now hold 43,200BTC worth ~930M. So in total they have lost ~$320M on their investment. That’s like 0.05% of their market cap, ie the Bitcoin buying decision should lower the stock price by 0.05%. That’s about how much we should care about Bitcoin’s crash. FSD how much?

https://twitter.com/x/status/1536559703240605697

Ha, I wish. Tesla marketcap as proven these past few years is just paper. Tho wall street analysts really dont care about one time impairments.

 

[Bet TSLA]

@Bet TSLA : Please do not conflate inflation with fraud, unless you’re trying to be silly - to which nothing in your post alludes.

Why not? I presented it because it's the attitude of many cryptocurrency people. They think cryptocurrency is better because it has rules that prevent it (or at least the major ones like Bitcoin) from being inflated away. They equate inflation with fraud upon the populace by the issuers of fiat currency. It's a not entirely illegitimate position. There's no argument that inflation makes your money worth less than it was. So if that happened with intent, then that's not very different from theft, is it?

Me, I think the whole fraud issue is overblown, but it's after hours and somebody else brought it up.

 

[Thekiwi]

Bitcoin crashing is so overblown. Tesla bought bitcoin for $1.5B, sold ~$250M, now hold 43,200BTC worth ~930M. So in total they have lost ~$320M on their investment. That’s like 0.05% of their market cap, ie the Bitcoin buying decision should lower the stock price by 0.05%. That’s about how much we should care about Bitcoin’s crash. FSD how much?

https://twitter.com/x/status/1536559703240605697

Below the previous impairment level, every $1,000 drop in Bitcoin price means $43.2 million in expenses on the next quarterly report (using your 43,200 BTC held figure), regardless of whether the price recovers or not. So far this quarter it has already had a negative impact of over $250 million on Q2 earnings.

If they had instead simply not purchased Bitcoin, they company trailing twelve month earnings post Q2 would be better off by something approaching the ballpark of half a billion dollars. All because of willingly participating in the biggest pump and dump scheme of all time.

 

[nativewolf]

Below the previous impairment level, every $1,000 drop in Bitcoin price means $43.2 million in expenses on the next quarterly report (using your 43,200 BTC held figure), regardless of whether the price recovers or not. So far this quarter it has already had a negative impact of over $250 million on Q2 earnings.

If they had instead simply not purchased Bitcoin, they company trailing twelve month earnings post Q2 would be better off by something approaching the ballpark of half a billion dollars. All because of willingly participating in the biggest pump and dump scheme of all time.

And that is why some smart money sold ...they realized either the board had no control of EM or the management team was not focused. A couple of years later you have to wonder did they let it sit in cash or ? If they just stayed cashed out then they were brilliant.

 

[traxila]

Funny, things have been so nuts that I don’t even remember my initial reaction to BTC. I think I settled into ‘In Elon we trust’.

All in all I would have preferred that TSLA did not have BTC on their balance sheet at this point.

I do want to point out that the current BTC trading makes no sense other than to say that the WS gang and their ilk has basically taken it over and it is treated like any other risk asset with a high PE.

There is a fixed amount of BTC that will ever exist, and I believe that about quarter of it is gone forever, lost in hard drives anf forgotten passwords. The entire purpose of BTC was to remove the power of central banks by introducing what was intended to be a state independent currency that was impervious to inflation.

It is supposed to be deflationary in the end and one would think that in this environment it would be a hedge against what is happening on the inflation front. It has not proved to be so. But neither has gold, the forever inflation hedge of history, which is puzzling. Gold did pretty well in the last high inflation period….

My point being: unless BTC is truly failed, this is yet another BTC crash (there have been many with it declared dead at the bottom every time) that will result in all time highs in the future. I do not know if TSLA will still own it at that point.

As a TSLA shareholder (and BTC owner) I am OK with the holdings we have now, but I certainly do not desire more exposure or any more time spent on it. I would like to focus on this whole renewable energy electric car thing that brought me here in the first place.

 

[heltok]

Below the previous impairment level, every $1,000 drop in Bitcoin price means $43.2 million in expenses on the next quarterly report (using your 43,200 BTC held figure), regardless of whether the price recovers or not. So far this quarter it has already had a negative impact of over $250 million on Q2 earnings.

If they had instead simply not purchased Bitcoin, they company trailing twelve month earnings post Q2 would be better off by something approaching the ballpark of half a billion dollars. All because of willingly participating in the biggest pump and dump scheme of all time.

A few months ago they were up a billion on their investment, then all the bitcoin bears were silent. It’s a risky investment, but unlike dollars it’s not guaranteed to be a bad investment(in absolute terms).

I got my first bitcoins at $12. I remember my friends saying that they were angry they didn’t buy it and now it was too late at 250. Then it crashed to 50 and they were laughing. Then it went up to 1000 and they were silent. Then it crashed to 300 and they were laughing again. Finally they got in at 2000, saw it go up to 20000, before it crashed to 5000 and they were happy to get out ahead. And now we are here again, people laughing at Bitcoin when it has crashed, calling it a ponzi, a pump and dump scheme and a bad investment...

And it has some value for Tesla, being able to accept Bitcoin as payment(some people will choose where and on what they spend their money based on who accepts crypto) and if needed it can be used to rapidly pay supplier/contractors around the world. It was a small bet they did, it will not shape their future. EV of the bet was close to neutral.

 

[cliff harris]

I would be amazed if Tesla ever have paid any supplier in BTC, and even more amazed if more than a handful of cars ever got bought using it.
I do understand the argument of holding BTC being safer than holding USD, but I was surprised they could not find better ways to invest the money in expansion, or in protecting their supply chain etc.

For example, tesla clearly have the capability of producing a lot of solar, and a lot of power-packs, so it would seem sensible to ensure ALL Teslas factories and facilities had as much solar on the roof, and as much storage as was practical, if there is spare cash.
Texas and Berlin certainly have huge scope for roof-mounted solar. I'd rather the shareholders cash was put to use on the rooftops of giga-factories than sitting in a bitcoin account.

I am still surprised there has not been more news regarding mining. Elon loves vertical integration, and being reliant on others to mine and supply lithium, iron, nickel etc feels like something he would hate. I'm not expecting Tesla branded mines, but an investment in some mining companies feels overdue now?

 

[Singuy]

Imo tesla,s crypto play was a way to generate demand from gen z as lots of young kids play in that space. This coincide with Elon being the meme lord and trollish behavior as well. None of us found gen z hospital on snl funny but maybe the younger crowd did..who knows.

 

[2daMoon]

Why not? I presented it because it's the attitude of many cryptocurrency people. They think cryptocurrency is better because it has rules that prevent it (or at least the major ones like Bitcoin) from being inflated away. They equate inflation with fraud upon the populace by the issuers of fiat currency. It's a not entirely illegitimate position. There's no argument that inflation makes your money worth less than it was. So if that happened with intent, then that's not very different from theft, is it?

Me, I think the whole fraud issue is overblown, but it's after hours and somebody else brought it up.

In all honesty, inflation of a money supply, if managed well, could balance itself against new goods and services creation to reduce the effects of purchasing power erosion over time. Money supply adjustments should oscillate, rather than result in constantly reducing purchasing power.

As it has been practiced, it is more like a hidden tax that erodes the contents of one's wallet over time and encourages people to spend rather than to save in order to maximize the value of their labor in trade. This keeps the money moving and keeps the fires lit under a productive society, in a way.

This could easily be considered a form of fraud, or at least social engineering, and has to be taken into account when making financial choices, especially when choosing to hold cash.

 

[TN Mtn Man]

I would be amazed if Tesla ever have paid any supplier in BTC, and even more amazed if more than a handful of cars ever got bought using it.
I do understand the argument of holding BTC being safer than holding USD, but I was surprised they could not find better ways to invest the money in expansion, or in protecting their supply chain etc.

For example, tesla clearly have the capability of producing a lot of solar, and a lot of power-packs, so it would seem sensible to ensure ALL Teslas factories and facilities had as much solar on the roof, and as much storage as was practical, if there is spare cash.
Texas and Berlin certainly have huge scope for roof-mounted solar. I'd rather the shareholders cash was put to use on the rooftops of giga-factories than sitting in a bitcoin account.

I am still surprised there has not been more news regarding mining. Elon loves vertical integration, and being reliant on others to mine and supply lithium, iron, nickel etc feels like something he would hate. I'm not expecting Tesla branded mines, but an investment in some mining companies feels overdue now?

True, but I'm not sure they were cash constrained, so much as supply constrained on panels and labor.

Now, concerning Bitcoin or any other digital currency-why is it looked at as an "investment" as such? Isn't it really just a medium of exchange, not an appreciating asset (baring early adopters getting on on the hype)? Seems like sitting on digital currency will be like putting cash under the mattress, rather than "putting it to work" (investing). Not that I didn't wish my cash was in my mattress rather than my IRA over the last 6 months. Now, this could be 100% off base, I really don't have a good handle on digital currency.

 

[AudubonB]

Bitcoin crashing is so overblown. Tesla bought bitcoin for $1.5B, sold ~$250M, now hold 43,200BTC worth ~930M. So in total they have lost ~$320M on their investment. That’s like 0.05% of their market cap, ie the Bitcoin buying decision should lower the stock price by 0.05%. That’s about how much we should care about Bitcoin’s crash.

One may compare exposure to BTC against other components of a balance sheet.
One may, if very diligent and careful, make the comparison against an income statement.

But it is worse than folly - it is dangerous self-deception - to compare it against market capitalization. Absolutely no less meaningless than to respond to a patient having lost six pints of blood by replying “No worries. She weighs in at 470 pounds, anyway.”

 

[ggr]

The problem with BTC and some other Proof-of-Work systems is energy. The energy used to secure the underlying blockchain, with the side effect of mining more bitcoins, is gone forever (turned into heat). It isn't like you can take it back out of the bitcoins later. That energy has a cost associated with it. A smoothed curve of the historical price of bitcoins, compared with the energy needed to mine a new one, has tracked fairly closely.*

Here's the problem that manifested clearly yesterday, when major companies halted transactions and conversions. The cost to mine bitcoins suddenly became much higher than the trade price of the results. Now the contrapositive comes into play: there is not currently an incentive to secure the transactions on the blockchain.

Does this spell the end of Bitcoin? Dunno.

*Anecdote: the first talk at the Real World Crypto conference in 2013 (I remember it well, it was the day after I retired from Qualcomm, and before the cryptocurrency people had purloined the word) pointed out that the average cost to mine a bitcoin was about $200, and the price was about $200. Conclusion, it can't go much higher. At the time, almost all mining was done on PCs at home. Of course this conclusion assumed that people wouldn't build custom ASICs, or migrate to places with cheap power. But then the computation required expanded too, by design of Bitcoin.

 

[ZeApelido]

Lol Celsius sounds too good that it was labeled as scammy! Hah! That's crypto disruption for ya. I'll take pride in that mod edit.

I've gotten so many of my co-workers on Celsius. Seriously, 10.5% interest rate on cash like it's a total no-brainer. I remember telling colleagues that Teslas were not only FASTER than ICE cars, but also SAFER as well...both due to being battery powered. Also mind blowing.

Celsius has a team that finds ways to generate yield with your crypto. They're involved in Bitcoin mining, DeFi, price arbitrages (i.e. GrayScale). As a depositor I benefit from all of that without having to actually learn/do it myself. I TRIED to do DeFi myself, but I'm not technical enough to understand smart contracts or understand cyber security risks. Having a centralized entity like Celsius put all their resources into doing that properly and just giving me yield from their efforts is a more than fair tradeoff.

What's crazy about the Celsius model is that the more money they give to depositors, the more profit they make. Here's the flow: the more people make in yield on Celsius -> the happier they are + spread it (like what I'm doing now) -> more people on platform holding their CEL token + crypto which Celsius can use to generate yield -> more revenue for Celsius the company.

It's a flywheel. Literally their whole goal is to give as much yield to customers as possible.

Credible Banking with Celsius Network: - Ha$o for $ound Money

Fed up of receiving the raw end of the deal with your bank? Join me for a deep dive into Celsius Network who put the community first and are disrupting the traditional banking sector.

www.hasoforsoundmoney.com

Now sure, you can buy Bitcoin on Coinbase...but you're not earning yield on it. And Coinbase is capturing all the value when they IPO. We as depositors don't receive compensation for that.

With true crypto projects, a lot of the value is tied to their utility coins. And this goes beyond Celsius, but basically ALL the crypto projects. If you want other examples of this, look at the Luna ecosystem. I'm also a big fan of what they're building - http://arringtonxrpcapital.com/wp-c...ecting_the_saver_walking_tall_with_anchor.pdf

Here's a good Youtube video on the topic -

Downsides? Well Celsius could get hacked. However, their whole business model is on loaning out / using their crypto to generate yield so they have <20% of crypto in storage at any given time. What if their clients default? Well to take a loan from Celsius companies/individuals have to over-collateralize their loans, which I referred to in my original post. So that serves as collateral + margin call mechanics. And Celsius has a wide array of entities it loans its coins out to, with no entity approaching close to 10% customer concentration and a limit on entire categories of yield. That's broad diversification of yield generation.

Compare that to BlockFi which many in crypto have speculated mainly generate yield through the GBTC premium arbitrage. Which...this was somewhat validated yesterday when BlockFi massively slashed their yield rates across the board on Bitcoin and Ethereum. Unfortunate, as I had several BTC in BlockFi

I'm deep in the rabbit hole y'all. Hahaha. It's incredibly intellectually fascinating, and the mechanics are so absurd that they get flagged for spam! LOL.

I will say...I've discovered a way to get 20% annual yield on US Dollars (via stablecoins). But I haven't done enough due diligence yet to feel confident enough to shill it here yet hahaha.

EDIT: I spent MONTHS researching Celsius. Compiled a lot of my research and put it here on this Google Docs -> -

What Is Celsius?

I dunno it feels a little to good to be true. I think I’ll pass.

 

[scubastevo80]

One either believes in crypto currency as a widely adopted medium of exchange in the future, or you don't. Irrespective of the mining costs, yesterday's issues were that of a company who decided to restrict liquidity, and I'm not surprised given what some of these DeFi companies are offering and how they react to problems. One would think these companies would have executives going to jail unless their "disclosures" were airtight. At the end of the day, I also don't know what the future holds for crypto, although I think there will be a very small handful of survivors and Bitcoin likely a part of that list.

It's interesting to me how folks talk about Tesla over a long horizon and holding through macro impacts, yet Bitcoin is scrutinized for being down and forcing a minor MTM hit to the financials and its suddenly a problem. To me, this is no different than Elon focusing efforts on TWTR. You get the bad with the good (if you view it that way).

 

[Knightshade]

I think the difference is my shares of Tesla represent actual ownership of an actual thing of inherent value....and you can have rational discussions projecting future value based on real things like output of existing and new products, profit margin on those products, etc...

Cryptocurrency has nothing inherently giving it value and it produces nothing of real use or value. It's not the solution to any problem (though proponents will tell you various things it COULD solve but somehow not only never does but is usually worse to actually use than the thing they suggest it'll replace), and investing in it requires a constant supply of Greater Fools- which eventually do run out.

That's without getting into the crypto-adjacent flat out scams like these "LET US HOLD YOUR CRYPTO AND WE WILL GIVE YOU MADOFF INTEREST AND TOKENS THAT ARE TOTES JUST AS GOOD FAKE MONEY AS THE FAKE MONEY YOU GAVE US" business models, or even worse, NFTs.

 

[JRP3]

It's interesting to me how folks talk about Tesla over a long horizon and holding through macro impacts, yet Bitcoin is scrutinized for being down and forcing a minor MTM hit to the financials and its suddenly a problem. To me, this is no different than Elon focusing efforts on TWTR. You get the bad with the good (if you view it that way).

It's not even close to the same thing. Regardless of Elon's antics the technology underlying Tesla is sound and is obviously they way transportation and energy are going to move. Tesla produces real products with real value. The value of Bitcoin and crypto in general is tenuous at this point.

 

[heltok]

The problem with BTC and some other Proof-of-Work systems is energy. The energy used to secure the underlying blockchain, with the side effect of mining more bitcoins, is gone forever (turned into heat). It isn't like you can take it back out of the bitcoins later. That energy has a cost associated with it. A smoothed curve of the historical price of bitcoins, compared with the energy needed to mine a new one, has tracked fairly closely.*

Here's the problem that manifested clearly yesterday, when major companies halted transactions and conversions. The cost to mine bitcoins suddenly became much higher than the trade price of the results. Now the contrapositive comes into play: there is not currently an incentive to secure the transactions on the blockchain.

Does this spell the end of Bitcoin? Dunno.

It hasn’t spelled the end every time this has happened in the past, so doubt this will be the one thing that finally breaks Bitcoin.

I have heard so many forms of
”Bitcoin no workie because …
no intrisic value
cannot overcome network effect of fiat
deflation
hoarding
square of nodes
governments will ban it
quantum computing
not useful
used by criminals
energy
bitcoin 2.0
blocksize limit
etc etc”

Heck even I have said two of the one above . Still Bitcoin is here in 2022 and not at zero. So maybe we can cut it some slack and read this book to learn about Bitcoin’s history before we critize where it is today.

*Anecdote: the first talk at the Real World Crypto conference in 2013 (I remember it well, it was the day after I retired from Qualcomm, and before the cryptocurrency people had purloined the word) pointed out that the average cost to mine a bitcoin was about $200, and the price was about $200. Conclusion, it can't go much higher. At the time, almost all mining was done on PCs at home. Of course this conclusion assumed that people wouldn't build custom ASICs, or migrate to places with cheap power. But then the computation required expanded too, by design of Bitcoin.

It’s pretty basic capitalistic economy. If it is more profitable to mine than costs, then more people will mine, driving up the cost to mine. Once it costs more to mine than the reward some actors will choose to stop mining. It will always go towards an equilibrium.

People will find better cheaper ways to mine: using smaller transistors, using more efficient chip designs, having cheaper power sources, writing better software etc. More expensive miners will be taken off the network and replaced by cheaper miners.

 

[dm28997]

Looking at buying some BTC since sentiment is negative. We'll see how the shorts make out in the long run.