Cryptocurrencies

[TwoCitiesCapital]

5 hours ago, changegonnacome said:

Serious question - how is this worked out.....what are the variables required that spit out $20k as network value per coin - whats the equation....and where are the numbers sourced to plug in the variables in said equation

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3356098

[changegonnacome]

 

2 hours ago, TwoCitiesCapital said:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3356098

Thanks @TwoCitiesCapital for sharing - pulled the conclusions last paragraph which more or less covers it....for those interested:

To date, the typical approach to cryptocurrency valuation has been via Metcalfe’s law. Commonly expressed in shorthand as n2 , it is the approximate value of P when n is large. We show that price is a function of n users, as Metcalfe’s law states. Our research differs from past models in that we derive that n may grow at a non-constant rate over time, as a Gompertz function would indicate. This function, usually used to describe the growth of biological organisms like bacteria, tumors, and viruses, likely has some application to network economics, including cryptocurrency valuation. Lastly, we confirm past research that the long-term growth rate in users has considerable effect on the long-term price of bitcoin.

I remain unconvinced having read the piece......and his comparisons to facebook etc. dont strike me as analogous enough.....saying the price of bitcoin is dependent on growth in users, especially new users......could be said of a ponzi scheme, multi-level marketing scam or the ponzi's 2nd cousin the pyramid.....or a religion.....I know, i know an old tired diatribe!

[fareastwarriors]

Well, that was fun...

 

 

$ASS Coin Billionaire: Tales From the Fringe of the Crypto Craze

Meet the thrill-seeking traders who are prowling for profits in the wildest corners of the market — all in search of the next big coin.

https://www.bloomberg.com/news/features/2021-05-20/crypto-market-prices-ass-coin-superdoge-billionaires-prosper-and-fall

[rkbabang]

50 minutes ago, fareastwarriors said:

Well, that was fun...

 

 

$ASS Coin Billionaire: Tales From the Fringe of the Crypto Craze

Meet the thrill-seeking traders who are prowling for profits in the wildest corners of the market — all in search of the next big coin.

https://www.bloomberg.com/news/features/2021-05-20/crypto-market-prices-ass-coin-superdoge-billionaires-prosper-and-fall

 

Nice!

[changegonnacome]

US Treasury wants cryptocurrency transfers over $10,000 to be reported to the IRS

https://www.theverge.com/2021/5/20/2...ud-tax-evasion

"The agency says cryptocurrency ‘facilitates illegal activity broadly including tax evasion"
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,”

Like I said.......the powers that be, agree with me......who.....just the US Treasury.....i.e. the White House......the CCP & China's leadership......next move is European regulatory authorities / commission to do something BTC hostile in response to Colonial/Ireland bitcoin denominated attack.......Europe is a little slower to get things done my guess is next week or week after something drops which tightens the grip around cyrptos neck.......as I've said previously in other threads this all occurring a couple of weeks after Colonial....weird, so weird......

Edited May 21, 2021 by changegonnacome

[Parsad]

1 hour ago, changegonnacome said:

US Treasury wants cryptocurrency transfers over $10,000 to be reported to the IRS

https://www.theverge.com/2021/5/20/2...ud-tax-evasion

"The agency says cryptocurrency ‘facilitates illegal activity broadly including tax evasion"
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,”

Like I said.......the powers that be, agree with me......who.....just the US Treasury.....i.e. the White House......the CCP & China's leadership......next move is European regulatory authorities / commission to do something BTC hostile in response to Colonial/Ireland bitcoin denominated attack.......Europe is a little slower to get things done my guess is next week or week after something drops which tightens the grip around cyrptos neck.......as I've said previously in other threads this all occurring a couple of weeks after Colonial....weird, so weird......

 

This was what I was talking about yesterday...I'm glad the U.S. government acted so quickly!    Cheers!

 

On 5/18/2021 at 9:47 PM, Parsad said:

For the Chinese, the ban on crypto is more to do with unwanted outflows of capital.  China has extremely tight control on citizens/expats/businesses moving capital outside of China...they don't want to see an exodus, nor can they support a large-scale exodus of wealth and capital.  For years, capital has been flowing outside of China through BTC transactions in Macau...they have tried to cutoff the head there, but little luck.  They want to make sure mainstream Chinese institutions aren't moving capital outside using crypto as well.

Frankly, I'm surprised more nations aren't banning crypto...there is so much illegal activity occurring through crypto's ability to hide transactions and the ownership of wallets.  The amount of tax evasion occurring should also worry nation states.  I suspect the current batch of crypto's demise will come when nation states or large corporations issue their own digital currencies that are more stable, efficient and accepted internationally through mainstream institutions.  Cheers!

 

[Spekulatius]

4 hours ago, Parsad said:

 

This was what I was talking about yesterday...I'm glad the U.S. government acted so quickly!    Cheers!

 

 

10k is the reporting threshold for any cash transaction in the US, it makes sense to extend this to crypto.

[Castanza]

6 hours ago, changegonnacome said:

US Treasury wants cryptocurrency transfers over $10,000 to be reported to the IRS

https://www.theverge.com/2021/5/20/2...ud-tax-evasion

"The agency says cryptocurrency ‘facilitates illegal activity broadly including tax evasion"
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,”

Like I said.......the powers that be, agree with me......who.....just the US Treasury.....i.e. the White House......the CCP & China's leadership......next move is European regulatory authorities / commission to do something BTC hostile in response to Colonial/Ireland bitcoin denominated attack.......Europe is a little slower to get things done my guess is next week or week after something drops which tightens the grip around cyrptos neck.......as I've said previously in other threads this all occurring a couple of weeks after Colonial....weird, so weird......

In a way this sort of legitimized crypto from a governmental standpoint though. As Spek pointed out this is alrady a thing with cash. And technically it's only Businesses that need to report these transactions over 10k.

 

Just playing devils advocate 

[TwoCitiesCapital]

9 hours ago, changegonnacome said:

US Treasury wants cryptocurrency transfers over $10,000 to be reported to the IRS

https://www.theverge.com/2021/5/20/2...ud-tax-evasion

"The agency says cryptocurrency ‘facilitates illegal activity broadly including tax evasion"
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,”

Like I said.......the powers that be, agree with me......who.....just the US Treasury.....i.e. the White House......the CCP & China's leadership......next move is European regulatory authorities / commission to do something BTC hostile in response to Colonial/Ireland bitcoin denominated attack.......Europe is a little slower to get things done my guess is next week or week after something drops which tightens the grip around cyrptos neck.......as I've said previously in other threads this all occurring a couple of weeks after Colonial....weird, so weird......

We also track USD transactions over 10k for exact same reasons and the amount of money laundering, tax evasion, and terrorist financing that occurs in USD vs Bitcoin is a staggering multiple higher. 

The Treasury has long commented on crypto in this fashion. Steven Mnuchin had similar thoughts as Janet Yellen has now. Maybe even Geithner back during Obama, but I wasn't part of the community back then to know. 

The Treasury has already said they intend to regulate, not ban, cryptocurrencies and BTC. The SEC head, who would be charged with the regulation, has called it a "digital, scarce store of value" and literally taught classes on the subject. Regulation will be what legitimizes crypto and results in mass adoption. We have the Treasury/SEC to thank for the possibility this hits 100k. 

You can build whatever narrative you want around Colonial - the fact was that both Treasury secretaries, and China, and India were all critical of it and have made similar comments about it  before Colonial occurred and they're all saying the same things today. Doesn't seem to me that Colonial has changed much of anything. 

Edited May 21, 2021 by TwoCitiesCapital

[TwoCitiesCapital]

Just to prove the point: 

https://www.businessinsider.com/china-eliminates-all-cryptocurrency-trading-2018-2

https://www.cnbc.com/2018/09/03/china-clamps-down-on-cryptocurrency-speculation.html

https://fortune.com/2018/01/17/china-bitcoin-cryptocurrency-crackdown/

/\/\/\ articles from 2018 talking about China banning crypto trades. 

 

https://www.cnbc.com/2019/11/25/bitcoin-sinks-to-a-6-month-low-as-china-accelerates-crackdown.html

https://cointelegraph.com/news/chinas-crackdown-on-cryptocurrency-trading-a-2019-recap

https://www.japantimes.co.jp/news/2019/11/28/business/chinas-crackdown-cryptocurrencies-claims-first-victims/

/\/\/\articles from 2019 talking about China banning crypto trades

 

https://www.cnbc.com/2019/07/18/mnuchin-says-us-will-ensure-bitcoin-doesnt-become-like-anonymous.html

https://www.cnbc.com/2018/01/25/treasury-secretary-mnuchin-explains-why-hes-really-looking-closely-at-bitcoin.html

https://www.marketwatch.com/story/treasury-secretary-mnuchin-says-there-is-strong-support-to-regulate-digital-currencies-2020-12-07

https://www.bloomberg.com/news/articles/2020-12-18/treasury-proposes-cracking-down-on-virtual-currency-transfers

/\/\/\ Mnuchin on Bitcoin and regulation (2018 -2020)

 

Point is - there really isn't anything new occurring today. China/Xi have been critical of crypto the entire time - have been enacting regulations to make it difficult to access and trade-in the whole time. It is unclear what the new regulations do seeing as it was already very difficult to engage in crypto trading in China to begin with. 

Mnuchin was critical of crypto in 2018/2019/2020 and has talked on multiple occasions of enacting regulation to better monitor, track, and identify the transactions. Yellen has said similar things since day 1 in office. 

Pretty sure the recent narrative has NOTHING to do with colonial pipeline hack and is just a continuation of the exact same narrative that existed in 2018, 2019, and 2020. 

 

 

Edited May 21, 2021 by TwoCitiesCapital

[Gregmal]

Yea the same shit regarding a crypto bear case basically gets regurgitated every time there's a pullback. Nothing new. Its what makes a market. 

[rkbabang]

44 minutes ago, Gregmal said:

Yea the same shit regarding a crypto bear case basically gets regurgitated every time there's a pullback. Nothing new. Its what makes a market. 

+1,  government action has always been part of the bear case from the start.  I personally think new and as yet unknown technology at some point in the future is more of a risk long term than government, but the risk of hostile government action is real and people will bring it up over and over again.  Nothing new.

 

[changegonnacome]

Relentless torrent since Colonial don't you think? - don't quite remember the American's and Chinese so coordinated on anything like this before - here's another one today:

China Hammers Bitcoin Anew With Warning on Miner Crackdown

https://www.bloomberg.com/news/articles/2021-05-21/crypto-limps-to-weekend-after-hammer-blows-from-musk-china-tax?srnd=premium

As I've stated before:

The expected value/return of a crime is a function of the probability of escape multiplied by the nominal $ value of the crime lets call it maybe something like this:

$ of Crime ($C) x Probability of Escape (PoE) = Expected Value of Crime (EVC)

Bitcoin/Crpyto increases the PoE.....it therefore increases EVC.....which in turn increases crime itself.....its been most notable in the ransomware segment and the move up the stack to national infrastructure vs. private companies has poked the transnational bear.......and we've seen a relentless wave of news since then

[changegonnacome]

Let's talk about why cryptocurrency is the single factor that created the ransomware plague that is ravaging our healthcare system and public infrastructure. (1/)

https://twitter.com/smdiehl/status/1395683698859814912?s=21

Edited May 21, 2021 by changegonnacome

[rkbabang]

8 minutes ago, changegonnacome said:

Let's talk about why cryptocurrency is the single factor that created the ransomware plague that is ravaging our healthcare system and public infrastructure. (1/)

https://twitter.com/smdiehl/status/1395683698859814912?s=21

"plague that is ravaging"

 

That's a little bit of hysterical and hyperbolical isn't it?   There are ways to protect against malicious code, and with good backups you can ignore the demands, wipe the system and restore.  The crisis is too many companies and organizations don't take network security seriously.  This will change that.

 

[changegonnacome]

6 minutes ago, rkbabang said:

"plague that is ravaging"

 

That's a little bit of hysterical and hyperbolical isn't it?   There are ways to protect against malicious code, and with good backups you can ignore the demands, wipe the system and restore.  The crisis is too many companies and organizations don't take network security seriously.  This will change that.

 

 

Your right - its the victims fault, they did it to themselves 

Edited May 21, 2021 by changegonnacome

[Castanza]

- 80% of Bitcoin purchases are with Tether. https://coinlib.io/coin/BTC/Bitcoin

- Tether headquarters in the Virgin Islands. 

- 3.87% cash on hand with a market cap of almost 60B?! https://tether.to/wp-content/uploads/2021/05/tether-march-31-2021-reserves-breakdown.pdf

- Where are the reserves? What happens if people withdraw for fiat?

Further info:

- Tether is BANNED in New York by the attorney general because they misrepresented their 1 to 1 claim of tether to USD.

https://financefeeds.com/new-york-crypto-either-play-rules-will-shut/#:~:text=The Attorney General Office has,in reserve at all times.

- Here is some insight into the structure of Tether. http://media.kalzumeus.com/tether-docs/bitfinex-response-to-nyag.pdf

Point 31

"In February 2019, well before the line of credit transaction closed, Tether updated the disclosures on its website to specify that its reserves “may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.” (Ex. B, at 6 (Item 1.1.32).) The website also made clear that that risks in buying tether included risks associated with the reserves: “Assets backing digital assets such as Tether Tokens, including loan receivables owed to Tether, are subject to the risk of default, insolvency, inability to collect, and illiquidity.” (Ex. C, at 2 (Item 7).)"

Tether tried to avoid being audited and "dissolved" their relationship. https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved

 

Quite a few people covering this topic https://www.youtube.com/watch?v=jFp86n7QCf0

 

On Ransomware:

 

Edited May 21, 2021 by Castanza

[TwoCitiesCapital]

14 minutes ago, Castanza said:

- 80% of Bitcoin purchases are with Tether. https://coinlib.io/coin/BTC/Bitcoin

- Tether headquarters in the Virgin Islands. 

- 3.87% cash on hand with a market cap of almost 60B?! https://tether.to/wp-content/uploads/2021/05/tether-march-31-2021-reserves-breakdown.pdf

- Where are the reserves? What happens if people withdraw for fiat?

Further info:

- Tether is BANNED in New York by the attorney general because they misrepresented their 1 to 1 claim of tether to USD.

https://financefeeds.com/new-york-crypto-either-play-rules-will-shut/#:~:text=The Attorney General Office has,in reserve at all times.

- Here is some insight into the structure of Tether. http://media.kalzumeus.com/tether-docs/bitfinex-response-to-nyag.pdf

Point 31

"In February 2019, well before the line of credit transaction closed, Tether updated the disclosures on its website to specify that its reserves “may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.” (Ex. B, at 6 (Item 1.1.32).) The website also made clear that that risks in buying tether included risks associated with the reserves: “Assets backing digital assets such as Tether Tokens, including loan receivables owed to Tether, are subject to the risk of default, insolvency, inability to collect, and illiquidity.” (Ex. C, at 2 (Item 7).)"

Tether tried to avoid being audited and "dissolved" their relationship. https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved

 

Quite a few people covering this topic https://www.youtube.com/watch?v=jFp86n7QCf0

 

On Ransomware:

 

I'm not going to defend Tether because they're shady and non-transparent - but pointing to the 3% in cash backing it is disingenuous. 

Repos, repurchase agreements, treasury bills, etc. are ALL very liquid and can typically be turned into cash instantaneously in most environments and can be used to fulfill withdrawal requests 99.9% of the time.

We can debate whether or not it's a good idea to have such exposure to credit risk via corporate and secured loans and if this will function as efficiently as a stablecoin as others that are backed solely by cash, but suggesting that it's only backed 3% by 'cash' is intentionally misleading seeing as how our financial system considers those things as "cash & equivalents" in every other respect. 

 

 

Edited May 21, 2021 by TwoCitiesCapital

[TwoCitiesCapital]

1 hour ago, changegonnacome said:

The expected value/return of a crime is a function of the probability of escape multiplied by the nominal $ value of the crime lets call it maybe something like this:

$ of Crime ($C) x Probability of Escape (PoE) = Expected Value of Crime (EVC)

Bitcoin/Crpyto increases the PoE.....it therefore increases EVC.....which in turn increases crime itself.....its been most notable in the ransomware segment and the move up the stack to national infrastructure vs. private companies has poked the transnational bear.......and we've seen a relentless wave of news since then

I guess we gotta ban cash transactions in USD and only accept electronic payments with a paper-trail since cash increases the expected value of a crime. Not to mention you can snort blow with cash which is a crime in and of itself and should also be factored into the equation. 

The things that make crypto attractive for crime are the same things that make it attractive for every day use: the ability to carry large sums, securely, and transact instantly. 

Edited May 21, 2021 by TwoCitiesCapital

[rkbabang]

1 hour ago, changegonnacome said:

 

Your right - its the victims fault, they did it to themselves 

 

I'll quote the cop that showed up a few years ago when I had a mountain bike stolen and he asked if it was locked up and I said no.  He shrugged and said "lock it or lose it".

 

[Castanza]

2 minutes ago, TwoCitiesCapital said:

I'm not going to defend Tether because they're shady and non-transparent - but pointing to the 3% in cash backing it is disingenuous. 

Repos, repurchase agreements, treasury bills, etc. are ALL very liquid and can typically be turned into cash instantaneously in most environments and can be used to fulfill withdrawal requests 99.9% of the time.

We can debate whether or not it's a good idea to have such exposure to credit risk via corporate and secured loans and if this will function as efficiently as a stablecoin as others that are backed solely by cash, but suggesting that it's only backed 3% by 'cash' is intentionally misleading seeing as how our financial system considers those things as "cash & equivalents" in every other respect. 

 

 

Tether said it was 100% backed by US currency and is still avoiding being audited. I think it's semantics. 80% is not a small number, and many of the other top cryptos also have similar flows. This just has Ponzi Scheme written all over it. 

[Castanza]

Cherry on the top is Jordan Belfort  (yes that one) interviewing the Tether founder  Booze is encouraged 

  

[TwoCitiesCapital]

1 hour ago, Castanza said:

Tether said it was 100% backed by US currency and is still avoiding being audited. I think it's semantics. 80% is not a small number, and many of the other top cryptos also have similar flows. This just has Ponzi Scheme written all over it. 

I would generally argue being backed by repos, t-bills, commercial paper IS being backed by US currency. We consider these things "cash & equivalents" everywhere else in the financial system. And the 20-25% in corporates is still USD backed - just with a small potential of capital loss which DOES seem reckless (again - not defending them). 

This isn't any different than your deposits at a bank. The bank doesn't hold 100% of that in cash. They hold 10-20% of it in cash. The remainder gets disbursed into Treasuries, repos, mortgages, credit cards loans, corporate loans, etc. No one is claiming your deposits at the bank aren't backed simply because they're not 100% cash...

I don't  use tether. I don't support tether. I would love it if Tether were audited.  wouldn't trust tether holding 20% in corporates and loans myself. But that's not the same thing as claiming it isn't backed. Until there is a default on those bonds, they are. 

Edited May 21, 2021 by TwoCitiesCapital

[wachtwoord]

2 hours ago, rkbabang said:

 

I'll quote the cop that showed up a few years ago when I had a mountain bike stolen and he asked if it was locked up and I said no.  He shrugged and said "lock it or lose it".

 

Indeed @rkbabang. Victim blaming may go against your sense of fairness @achangegonnacome and I might even agree. What we think is not relevant though because the world is not fair and denying reality is plain stupid.

Or do you drive around town with your entire life savings in a briefcase with Dollar signs drawn al over it?

Edited May 21, 2021 by wachtwoord

[RichardGibbons]

I'm not that libertarian relative to others on the board, but I'm still not a fan of the argument that crypto should be banned because it makes illegal things easier. I can see why a state would say that, but as an individual, I think there's value in currencies not controlled by the state.

Because even if you think that the state is completely trustworthy, you could be wrong. And, if there is a way for individuals to remove their assets from state control, then the state is less likely to try to implement an oppressive system knowing that the people have an alternative.

Plus, just because something is the law doesn't make it right. For instance, the Nazis passed a bunch of laws expropriating Jewish wealth. Even if a Jew could flee Germany, they wouldn't be able to take their money with them. If cryptocurrencies existed then, the Nazis might still have tried the same thing, but wouldn't have been nearly as successful.

And maybe you don't think that can happen here, but we already have laws like civil forfeiture. The government can and does seize assets based on suspicion of criminal activity (and for assets like cash, its simple existence seems to often be considered sufficient "evidence" that the asset was acquired through criminal activity.) Effectively, civil forfeiture laws allow the police to steal any large sums of cash that that they happen to stumble upon. So we're part way there.

So, I understand why the government would want to eliminate a currency that limits its ability to oppress people. But as an individual, it seems like a good thing that a currency exists that limits the extremes of states' control.