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In peacetime successful centralized companies get compromised by the state.

In wartime you expect me to believe Samourai is coinjoining Russian oligarch UTXOs and the state is turning a blind eye? If you believe that I have a bridge to sell you.

Many of the thousands of altcoins that pop up out of nowhere may be just a more sophisticated version of this same scheme.

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If you could legally acquire an NFT for $100 and sell it to an anonymous entity for $1,000,000 after a few days, laundering money in your country would be effortless.

The value of bitcoin mainly depends on two factors:
1. The pressure governments exert against wealth accumulation in general.
2. The pressure they are able to exert against holding/transacting btc in particular.

They define a trade-off of incentives & disincentives to hold btc.

Apparently unpopular opinion: Using coinjoins is acknowledging "tainted bitcoins" are less valuable, which misses the whole point of bitcoin.

Bitcoin is trust-minimized wealth. Any premium on "clean bitcoins" relies on Government approval —it is trust-based—, and represents an arbitrage opportunity created by people who do not understand where the value of bitcoin comes from.

The valuation of assets with a deterministic supply depends uniquely on their demand.

Following @NGDP_Advice is probably the easiest way to understand the consequences of the monetary policy carried out by the Fed in the last few years. nitter.poast.org/NGDP_Advice/s

I always rejected the idea of getting a mortgage myself. To some extent as a reaction to the apparently anti-EHM meme that says "renting is burning away money". But I recently realized that young folks with a secure and abundant income as their only wealth component have an excessively liquid portfolio, which is an economic waste. Any investment allowing them to move to the right of the Efficient Frontier, whether it is getting a mortgage or buying bitcoin, would appear as "free money".

Many people believe that a significant part of bitcoin value comes from future cost savings in Government-approved transactions. E.g. paying for coffee. But we already have many great alternatives for uncensored transactions.

Bitcoin's value mainly derives from resisting censorship in transactions you would not be able to do otherwise.

If you do not demand censorship-resistance and you do not want to bet on the rise of such demand, you have no reason to demand bitcoin.

This book has so much potential to multiply wealth that I am tempted to buy one for every school and politician in my country. amazon.com/-/en/Bryan-Caplan/d?

How much does it cost to destroy Bitcoin? (Part 2) gist.github.com/fernandonm/684

TL/DR: Many orders of magnitude more than the security budget.

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A company investing in bitcoin is a *trusted third party*, that ruins the main purpose of owning bitcoin.

"State recognition of a commodity as money may give it the character of money in the legal sense, but not in the economic sense" - Carl Menger.

fnietom boosted
fnietom boosted

Muy buen hilo de Fernando, como ya es habitual!!!
👇👌👀👀👀👀👌👇
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RT @fnietom
1/ PoW enables an efficient convergence to a coin value maximizing consensus. I.e. the unforgeable cost necessary to produce new blocks minimizes the trust required to choose the chain with the most valuable coins, providing an honest signal of the value of the coins transacted.
twitter.com/fnietom/status/141

5. Unless you don't think a trust-minimal asset will always be demanded by the market, why would you want to go through all these shenanigans?

P.S. While this is an extreme case for clarity, much smaller levels of DC fee revenue may affect Bitcoin incentives and represent a damage to bitcoin owners.

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3. This split can be expected to spread to Bitcoin. If DC fees dominate, the race would otherwise be won by the fork with more valuable DC transactions, regardless of whether it maximizes bitcoin value or not.

Bitcoin transaction demand ≠ bitcoin demand.

4. I tend to believe Bitcoin would likely split in 3 in such scenario, as some holders may prefer to remove DC induced risk altogether and disallow Drivechains (potentially dominant hashrate escrows in general).

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Why would Bitcoin become incentive incompatible if Drivechains are allowed?

Because coin value maximization (i.e. risk/trust minimization) may stop being the main driver of tx fees.

1. Let's say over 2/3 of Bitcoin miner fees end up coming from DC transaction fees, through BMM.

2. Then, for some reason, the DC splits in two forks with similar hashpower, making unclear what side would win a race to withdraw coins to the main chain.

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