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On one side of this, a sharp and persistent increase in the broad money supply is the biggest quantifiable correlate with price inflation. On the other side, sharp changes in the supply of goods and services (e.g. a major boom or a major loss in productive capacity) also significantly affect price inflation. We can see this with long-term charts of several different developed countries as examples. These charts show the five-year rolling cumulative amount of broad money supply growth and consumer price index growth. Areas where money supply growth greatly exceeded changes to consumer price index were generally due to some sort of productivity boom. combination of high debt, high interest rates on that debt, aging demographics, geopolitical tensions, and tight energy supplies are likely to result in ongoing waves of inflation. For periods where we generally get inflation under control, it will likely be due to global demand suppression and economic stagnation, rather than what we actually want: global disinflationary growth.
$Greg Foss thinks Bitcoin should be considered default insurance on the entire global fiat currency system—like a CDS on the US dollar, Canadian dollar, British pound, euro, yen, yuan, and all the rest of the government currencies. Some proponents believe the endgame for Bitcoin is to eventually emerge as the world’s dominant form of money. It’s a process called “hyperbitcoinization”—or what I like to call The Bitcoin Supremacy. That’s why Bitcoin is even better than a CDS. It provides insurance against the failure of the entire worldwide fiat currency system, has no counterparty risk, and doesn’t expire.
$Would the collapse (in terms of redemptions) of a stablecoin cause contagion in the traditional financial system? To answer this, first we have to clarify the starting point, and then there is actual data that can answer many of these questions.
Tweets: @PaxosGlobal @cz_binance @Schuldensuehner $history of debt in bitcoin mining, examined key principles of debt, and looked at some of the most common structures available to bitcoin miners. Now that we understand the landscape, we will take a look at the considerations for borrower and lender alike, the effect of leverage on mining returns, and discuss how the future of the market might look. Here are the main topics covered in Part 2: Key considerations from a lender's point of view and from miners' point of view, a case study, comments on the future of debt in Bitcoin mining, shortcomings of ASIC-backed debt, cost of capital being king, and The Forever Forthcoming Hash Rate Marketplace.
$Computation is competition. While the quantum computing threat is not something we expect to be worth worrying about for many years, it is better to be proactive rather than wait for it to come for us. Security is the science of staying ahead. The very act of wealth preservation is comprised of staving off the many attempts to steal it.
$Between 2009 and the end of 2021, household sector wealth soared by 150%, increasing from $60 trillion to $150 trillion. The index, which is commonly referred to as the Wealth-to-Income Ratio, has a 68-year average is 550%. Its interesting to observe how the index behaved in the face of past examples of record high stock prices. “Actual” inflation is likely much higher than the official number. According to Shadow Government Statistics, if inflation were calculated in the manner that it was back in 1990, we would have an “official” inflation rate of more than 17%. What will the Fed and the government do now? This time, it is unlikely that the government will step in to save investors. Additional fiscal stimulus would likely drive inflation even higher. And in the face of high inflation, the Fed’s response is money destruction, not money creation. Investors, therefore, are in a very tough place.
$Over the past 10+ years, there has been a growing movement of people adopting a low-time-preference strategy of saving and investing with the goal of achieving financial independence early in life, putting themselves in a position to retire earlier than the traditional age of 65. Hence the acronym, FIRE: Financial Independence, Retire Early. Bitcoin allows you to mitigate the certainty of dollar debasement without exposing yourself to the risks of investing. A deep dive into the bitcoin rabbit hole tends to lead to the conclusion that its adoption will continue apace, leading to its value rising exponentially. Bitcoin represents the greatest asymmetric bet the world has ever seen.
Tweets: @ts_hodl $The U.S. Federal Reserve is now operating at a financial loss, and is months away from having negative tangible equity for the first time in modern history. This article explores how we got here and to what extent any of this matters for savers and investors. The Federal Reserve’s soon-to-be negative tangible net equity won’t matter at first, and for most people won’t even be noticed. However, over the long-term, this is actually somewhat relevant. By the end of this decade, I have considerable concerns regarding a fiscal spiral occurring in the United States and other developed countries, meaning that a combination of high deficits, high debts, and high interest rates on those debts, will all work together to create structural inflation and money supply growth.
$The longstanding compromise on transaction sizes, how Taproot and SegWit inadvertantly blew it up, and the nascent NFT protocol emerging in its wake.
Tweets: @resistancemoney @AsherHopp $Abstract: In this piece we explore why Dapps are typically built on Ethereum rather than Bitcoin, which takes us all the way back to March 2014. We examine a debate about whether and how a Dapp protocol called Counterparty should use Bitcoin’s blockchain. This was sometimes called “The OP_Return Wars”. We explain the history of OP_Return usage and sidechains in Bitcoin. We conclude by arguing, whether one likes it or not, that it was the culture in the Bitcoin development community in 2014 and the negative view of using Bitcoin transaction data for alternative use cases, which played a major role in pushing developers of these Dapps onto alternative systems like Ethereum, along with other factors.
Tweets: @fiatjaf @resistancemoney @benthecarman @alexbosworth @brian_trollz @astridwilde1 @BitMEXResearch $Part I of the two-part series covers the following topics: (1) The History of Debt in Bitcoin Mining (2) Principles of Debt: Capital stack overview, Creditworthiness, Collateral, Covenants, Cost of capital, Back-end financing (3) Debt Products for Bitcoin Miners: Asset-backed debt, Corporate Debt and (4) Summary Comparison.
Tweets: @BraiinsMining @BraiinsMining @emilyjnicolle $Disconnect from price. Secure your bitcoin for the next 10x. Avoid short-term capital gains. Tread carefully with lending opportunities. Develop your own market analysis. If you want to truly change your fortune, use your bitcoin journey as an opportunity for education, rather than a search for overnight riches. Develop new skills. Keep learning about money, technology, economics, and all the problems Bitcoin was designed to solve. The more you understand and appreciate bitcoin, the closer you come to making a splash of your own.
$The US debt ceiling is in the news again due to Congressional gridlock, along with the possibility of a US sovereign default and the unintuitive idea of the US Treasury Department minting a trillion-dollar platinum coin to bypass the problem. This article breaks down some of the nuances involved in this strange situation, which comes up every few years.
$We Bitcoiners are in a race. Perhaps the most important race we will ever run. We are racing against time to drive the adoption of Bitcoin as fast as we can. We are racing toward a future in which the U.S. Government never coordinates a concerted attack against Bitcoin and Bitcoiners. This is a race to avoid a war. Although Bitcoin is destined to win, if we lose the race to avoid the war, victory will be far more costly. This would be the long way — and the hard way. Instead of a sprint to a bright, orange future, we would be embroiled in a long, hard confrontation with a government desperate to hold on to the power of the monetary printing press. If we lose the race, the long, hard path will be a war in which hundreds of millions of people will suffer the decivilizing and impoverishing effects of hyperinflation. So, for those of us alive, for those of us ready and able now, it is vitally important to run this race as well as possible.
$This article explores technical analysis of mining behavior exhibited by an entity that is plausibly Satoshi Nakamoto. The major conclusions are: - Their goal was to keep the "heartbeat" of the network alive while it was being bootstrapped. - They mined on a single machine with a maximum hashrate of 6 Mhps. - They could have easily earned more than twice as much BTC if they had mined at full power. - They did not want to be in a position of dominating the network hashrate, but may have felt it was necessary during the earliest days when the network was far more fragile due to having fewer than five miners. - They cared a great deal about difficulty adjustments. The adjustment algorithm was one of Satoshi's greatest innovations and they opined upon the topic more than almost any other. - They wanted as many people to be able to mine on home PCs as possible (Satoshi decried the FGPA / GPU mining race)
$Exasperated with a conversation, I asked my friend directly, "What do you think the probability is that Bitcoin hits $1M per coin?" My friend replied without hesitation, "0.001%." I laughed and said I put it at 80%. We had a conversation about my friend's skepticism, and I wondered if there was some information asymmetry, or if it was self-motivated beliefs. My friend group is full of people like this, highly intelligent and successful, yet resistant to Bitcoin. I've found it to be a topic of fascinated frustration. I believe that my friends are resistant to Bitcoin because of their trust in the current system, and see Bitcoin as a radical departure from it. In contrast, I see Bitcoin as a necessary response to the flaws in the current system and a trust-minimized store of value.
Tweets: @BitcoinAudible @sunny_satoshi @sunny_satoshi @epodrulz @stephanlivera @TheGuySwann @petermiyoung @jakeeswoodhouse $Many speculate that Bitcoin’s security will lapse with the end of the mining subsidy. But other factors will continue to incentivize miners. Two prominent and likely factors are: (1) Higher transaction fees due to base layer settlement activity for higher layers which in turn is the result of increased adoption and (2) Bitcoin miners can act as an auxiliary tool for other business practices, an example being the highly-overlooked development in the mainstream involving the Bitcoin miners’ incentive to pursue stranded, wasted or excess energy.
$Bitcoin provides the ultimate form of transferable value because it preserves the encapsulated wealth. This is an opinion editorial by Leon Wankum, one of the first financial economics students to write a thesis about Bitcoin in 2015.
$After years of learning, I now devote a fair amount of my time trying to help others understand bitcoin better. While many people have referred to me as a “bitcoin expert,” I still consider myself a student – I have yet to determine how deep the rabbit hole goes.
$The precursors of money, along with language, enabled early modern humans to solve problems of cooperation that other animals cannot – including problems of reciprocal altruism, kin altruism, and the mitigation of aggression. These precursors shared with non-fiat currencies very specific characteristics – they were not merely symbolic or decorative objects.
$Some thoughts on FTX... Subprime meets Enron meets Madoff - on steroids thanks to altcoins... A recipe for disaster... Framing the conversation: Key challenges for Bitcoin... Potential negative impacts of the FTX collapse... Ultimately, the impact is very positive... Is regulation the answer?
$The IMF and World Bank do not seek to fix poverty, but only to enrich creditor nations. Could Bitcoin create a better global economic system for the developing world?
Tweets: @LynAldenContact @LynAldenContact @LynAldenContact @gladstein @gladstein @steve_hanke @reuters $I selected these quotes from this amazing book by Saifedean AMMOUS. They offer only a glimpse of the richness of the book that is an absolute must read.
$Sam Bankman-Fried is a con man and fraudster of historic proportions. But you might not learn that from the New York Times, CoinDesk's Chief Insights Columnist David Z. Morris writes.
Tweets: @jemenger $