[HN Gopher] Mexican billionaire Salinas says his banking busines...
___________________________________________________________________
Mexican billionaire Salinas says his banking business may embrace
Bitcoin
Author : shivbhatt
Score : 170 points
Date : 2021-06-28 06:01 UTC (17 hours ago)
(HTM) web link (www.reuters.com)
(TXT) w3m dump (www.reuters.com)
| neilwilson wrote:
| Banks create and take financial assets and discount them into
| their own liabilities, which can be in any denomination they feel
| capable of supporting.
|
| Since there is paper gold, it would be amazing if paper bitcoins
| didn't show up at some point.
| outside1234 wrote:
| "Billionaire banker sees potential to do more money laundering"
| magsnus wrote:
| Bitcoin needs to go away. All cryptography has a shelf life so it
| is not a good store of wealth and it is terrible as a transaction
| medium.
|
| 1 Bitcoin transaction: 1200 kWh
|
| 100k VISA transactions: 148 kWh
|
| Avg US houshold per month: 877 kWh
| fabianfabian wrote:
| There is a difference between currencies, payment systems and
| settlements, Bitcoin can do all. Also, you forgot to list the
| dollar.
| jcranmer wrote:
| The VISA transaction is effectively how most people will
| transact with dollars.
|
| If you're seriously unsure about how much more energy Bitcoin
| uses than cash, when I last did the math, Bitcoin mining
| consumed more energy than the entire US Mint by a few orders
| of magnitude. It's not even close.
| plebianRube wrote:
| Mind posting your math so we can check your claim?
| mshumi wrote:
| BTC Ledger =/= BTC consensus. If the protocol can be made pure
| proof of stake while maintaining the same availability and
| security guarantees this is no longer an issue. However, this
| is against the best interest of miners.
| errantmind wrote:
| As usual when this tired argument is made, you aren't
| considering the Lightning Network, which enables cheap and
| energy efficient send/receive for Bitcoin.
|
| Even if this didn't exist, Bitcoin isn't going anywhere. Its
| value could be dramatically reduced by banning fiat on-ramps,
| but it will still be around. Cryptocurrency is a genie out of a
| bottle, you aren't going to put it back in and pretend it never
| happened.
| nerdponx wrote:
| Hasn't Lightning been in the works for 4+ years? Is it
| actually progressing towards usability? I remember hearing
| about it during the 2017 speculation frenzy and block size
| controversies, when people raised the exact same concerns
| about Bitcoin transactions being slow, expensive, and carbon-
| intensive.
| rawtxapp wrote:
| It is fully functional with growing adoption (1ml.com), you
| can try some of the lightning wallets available
| (https://lightningnetworkstores.com/wallets, personally I'd
| recommend Phoenix Wallet).
| jerry1979 wrote:
| El Salvador is more or less adopting the Lightning Network
| as a way to enable Bitcoin as legal tender in its borders.
| serial_dev wrote:
| Is the Lightning Network ready and 100% rolled out? When will
| it be ready? Which energy consumption numbers were incorrect
| in your parent comment?
|
| > Cryptocurrency is a genie out of a bottle
|
| That might be true, but that doesn't mean that criticism of
| Bitcoin (which is only one of the crypto currencies) is not
| valid.
| neb_b wrote:
| There is still active development, but https://strike.me
| uses the lightning network. There are several other apps
| built on top of the lightning network.
|
| I use the lightning network almost every day listening to
| podcasts with the Breeze app https://breez.technology/
| thebean11 wrote:
| > Which energy consumption numbers were incorrect in your
| parent comment?
|
| The number of transactions per second of Bitcoin, as it can
| handle many if you include lightning
| cjaybo wrote:
| And what about the answers to the two questions leading
| up to that one?
| thebean11 wrote:
| I'm not sure how to answer those, what exactly is the
| question? The lightning network is live, you can use it
| now.
| phil-m wrote:
| As usual when this tired counter-argument is made, you aren't
| considering alternative solutions (cryptocurrencies) that are
| already working with Consensus algorithms like (variants of)
| Proof of Stake...
|
| Forget Bitcoin, Lightning Network was announced years ago and
| it's still far from being used in production. Also this
| doesn't solve the Proof of Work problem Bitcoin has, the
| higher its value the more energy is used, a second layer
| solution isn't going to fix this issue, it's only increasing
| throughput.
|
| Since developers of Bitcoin are extremely conservative and
| censoring, I doubt Bitcoin is going anywhere in the mid to
| far future. Other projects are just faster and can
| potentially deliver their promises.
| rawtxapp wrote:
| PoS is far from being perfect and has it's own sets of
| issues (ex: rich gets richer, hackers that end up getting
| large sums of coin now also have control over the network,
| custodians also have large control, etc).
|
| > Forget Bitcoin, Lightning Network was announced years ago
| and it's still far from being used in production.
|
| It _is_ being used in production with growing adoption
| (1ml.com) and it is what they are using in El Salvador.
|
| > Since developers of Bitcoin are extremely conservative
| and censoring
|
| It's a decentralized network where nobody controls it,
| developers can't push changes willy-nilly. Bitcoin isn't
| trying to be everything to everyone and that's ok. You can
| have other layers and projects which enable these fast
| moving ideas (most of them are going to be deprecated
| sooner or later because they'll turn out to be bad ideas
| anyways). Once these projects prove it works, Bitcoin can
| incorporate them. Most of these projects that are faster
| sacrifice decentralization to a certain extent and if we
| didn't care about decentralization, then why even bother
| with crypto, we already have Paypal/Visa/etc.
| sprafa wrote:
| ... complete lack of understanding that crypto is moving to
| proof of stake which reduces energy use by something like a few
| orders of magnitude.
| top_sigrid wrote:
| Well this might be true for some cryptos. It is not true at
| all for Bitcoin which is still by far the biggest and most
| relevant.
| New_California wrote:
| Bitcoin is here to stay.
| kriz9 wrote:
| Does that 148 kWh also consider the energy spent on running the
| offices, energy spend on commute for VISA employees and all the
| other things that keep this system working ?
| apetrovic wrote:
| I never understood this argument. These employees are real,
| living people. Even if Bitcoin rules the world and VISA
| ceases to exist, these people will continue to go to
| (different) offices. So, isn't that extra energy expenditure
| not really tied to the banking system, it's just office work?
| jcranmer wrote:
| No, but neither does the 1200 kWh for Bitcoin also consider
| that energy. Bitcoin won't obviate the need for mortgage loan
| officers to decide whether or not to loan someone a million
| dollars(' worth of bitcoin) to buy a house, nor will it
| eliminate or even reduce military spending. So please stop
| insisting that you tally that up on the side of fiat, because
| that means you're no longer comparing apples and oranges.
| errantmind wrote:
| Bitcoin is naturally deflationary. It encourages saving
| over spending, which suppresses frivolous consumption. I'd
| be curious to see how this compares to the energy
| consumption required to produce all the useless junk most
| people buy (including myself sometimes).
|
| I unironically believe a deflationary currency is the only
| way to avoid climate collapse. That could be Bitcoin or
| something else, but what it can't be is a central authority
| who has the option to infinitely increase the money supply
| to maintain 'economic growth'.
| phil-m wrote:
| You can achieve this without Proof of Work, but
| unfortunately Bitcoin will probably stay forever with
| this Consensus algorithm (considering the circumstances).
|
| Bitcoins energy consumption is disproportionate to the
| value for the societey it has.
| jerry1979 wrote:
| How do you evaluate energy consumption vs value for
| society? Some see it this way: Bitcoin has a
| revolutionary potential to bring the global south out
| from under the financial thumb of the global north. We
| can see glimmers of this unfolding now in El Salvador as
| they implement Bitcoin as legal tender.
|
| Also, given that point-of-source green energy is cheaper
| & more politically stable than fossil fuels, shouldn't we
| expect to see greener and greener Bitcoin mining? In
| fact, China banned Bitcoin mining in it's coal regions
| and then more recently throughout the country. Meanwhile,
| El Salvador plans to build mining facilities using geo-
| thermal power.
| jcrben wrote:
| It's not deflationary. The supply will increase for the
| next hundred years at least. The odds favor that this
| inflation, coupled with a lack of capital return, will
| underperform real investing.
|
| The proper comparison for "investing" in bitcoin is
| investing in stocks, many of which ARE deflationary by
| decreasing their shares outstanding every year.
|
| People are no more incentived to save by bitcoin than
| they are by real investment. To reiterate, it's been
| sound money mgmt to defer consumption and invest for the
| past few hundred years at least.
|
| The payment to bitcoin miners comes from bitcoin holders.
| At current prices it is billions of USD per year, paid
| out by inflation to burn fossil fuels. I'd rather get
| paid on my investment than pay.
| jalcazar wrote:
| It should read "Salinas Pliego" as "Salinas" is understood to be
| "Salinas de Gortari"
| xtracto wrote:
| Is Salinas de Gortari a billionaire? I think few millennials
| actually know who the previous president is.
| [deleted]
| corpMaverick wrote:
| Not good. Salinas is one of the worst oligarchs in Mexico. A text
| book narcissist.
| villgax wrote:
| I just hope BTC becomes the global alternative to the USD being
| set as a reference for value
| arcticbull wrote:
| That would make the global financial system dramatically less
| stable.
| New_California wrote:
| On the contrary, the Bitcoin based global financial system
| would be robust, reliable, dependable, non-inflationary,
| neutral, and apolitical.
|
| Note after hyperbitcoinization the volatility would be much
| lower than it is today, simply because it would take so much
| more to affect the price.
| [deleted]
| arcticbull wrote:
| "Non-inflationary" in supply terms only, of course, but
| that's just half the picture. You can easily have inflation
| in an economy with a fixed monetary supply if velocity
| increases disproportionately. [1]
|
| Worse, without a central monetary authority to adjust the
| supply boom and bust cycles are greatly exaggerated just as
| they used to be with the gold standard. There's no
| mechanism to address a deflationary spiral or runaway
| inflation (again that can happen with fixed supply). That
| makes it less reliable and less dependable.
|
| There's no such thing as neutral and apolitical money,
| certainly not at the point of use.
|
| This is broadly speaking wishful thinking and voodoo
| economics.
|
| Currencies need to be fungible, predictable, cheap to
| transact and hold their value as long as required to invest
| or spend on basic needs. Bitcoin is absolutely none of
| these things, making it crap money.
|
| Worse, it's the grey goo of energy usage.
|
| [1] https://www.stlouisfed.org/on-the-
| economy/2014/september/wha...
| New_California wrote:
| Keynesian vs Austrian once again - lets agree to
| disagree.
| plebianRube wrote:
| For the best these people are victims of the blub
| paradox, but for financial systems.
|
| Blub paradox: (programming) The situation where a
| programmer (financial participant) sees less powerful
| programming languages (finacial sustems) than those
| he/she knows as lacking in important features, but more
| powerful ones as having bizarre or unnecessary features
| arcticbull wrote:
| Re: Keynesian v. Austrian let me ask you this. As the
| money supply increased 25% last year why isn't everything
| 25% more expensive? As the M2 supply increased 15X since
| 1970 why are things only 7X more expensive?
|
| The idea inflation is supply side only is trivially
| falsifiable is it not?
|
| If the treasury minted a trillion dollar coin and gave it
| to me, then I threw it into a vault and never touched it
| the supply went up but prices stayed flat. Supply alone
| isn't a complete picture, obviously - what people do with
| that supply matters too. So what am I missing?
| seoaeu wrote:
| > non-inflationary
|
| You have a pretty warped definition of inflation if you
| think Bitcoin is non-inflationary despite undergoing 70+%
| inflation over the last few months.
| [deleted]
| TheGigaChad wrote:
| NoCoiners, I offer coping lessons. Reach out to me if interested.
| adelHBN wrote:
| He is smart. Unlike Musk, he is buying Bitcoin when it's down.
| luffapi wrote:
| Musk receives billions of dollars in government handouts. Tesla
| and Space X could not exist without the government pouring our
| tax dollars on them. I don't think it's too far of a leap to
| suggest Musk's role in destabilizing BTC came at the request of
| his patrons in the government.
|
| Or he's just incredibly stupid. Maybe a bit if both.
| SantalBlush wrote:
| That does seem like too far of a leap, unless you have some
| strong evidence to support it. Did the government ask him to
| tweet about Gamestop, too?
| luffapi wrote:
| So you think he's just incredibly stupid? I would believe
| that but he does have billions of dollars of incentives to
| do the bidding of the US gov.
|
| I could also see him tweeting GameStop as an anti crypto
| move. He basically has done nothing but inject fraud and
| FUD into the "internet investing" space that Bitcoin is a
| huge part of. How many people sold BTC to buy GME or
| otherwise shifted money there away from crypto?
| jjcon wrote:
| *Looks like someone may have bought into the hype at just
| the wrong time*
| luffapi wrote:
| Well Musk both created the hype and bought into it at the
| wrong time, definitely worth taking a look at his motives
| for making such an aggressively destructive move.
|
| If you're suggesting I bought in at the wrong time, I
| didn't. I would _never_ listen to Elon Musk.
| onion2k wrote:
| _Salinas last year said he had about 10% of his liquid portfolio
| invested in bitcoin._
|
| Billionaire buys BTC. Billionaire pumps the price of BTC.
| Billionaire profits. There's at least one other billionaire who
| plays this game.
| celticninja wrote:
| As a billionaire I am not sure he really needs to pump bitcoin
| to make a return. If you watch the interview with him he makes
| his case for holding bitcoin and it is a reasonable one. He
| says when he started his career the Mexican peso was 20:1 to
| the US dollar, now it is 20,000:1.
|
| Many in developed countries don't understand the challenges of
| a devaluing currency with unlimited supply or the difficulty of
| being unbanked.
| economusty wrote:
| He can still leverage the bitcoin, he may be holding and not
| selling but that doesn't mean he isn't borrowing against the
| bitcoin and using the borrowed cash to make growth
| investments.
| pibechorro wrote:
| Dont worry, they will soon. All developed countries have been
| bailing out banks etc by printint trillions. It will catch up
| to them.
|
| Good on him. Good on Mexico. Preserving the wealth of the
| middle class and giving access to the poor and unbanked is
| tye way forward for a more egalitarian society.
| null_object wrote:
| > Good on Mexico. Preserving the wealth of the middle class
| and giving access to the poor and unbanked is tye way
| forward for a more egalitarian society.
|
| Genuine question - how is this going to help the "poor and
| unbanked" to get access to an economy that's somehow
| insulated from what you say is the inflation surrounding
| them? And in what concrete way is it leading to a more
| "egalitarian society"?
|
| As far as I can see, this only gives an opportunity to the
| already wealthy (and especially the super-wealthy) to
| _increase their wealth at the cost of newcomers to the
| system._ But I 'm genuinely curious about the part that I'm
| missing, where the poorest in society are reaping the
| benefits of their Bitcoin holdings?
| arkitaip wrote:
| Billionaires routinely conspire with politicians and law
| makers to prevent workers from earning a few dollars more per
| hour, but somehow they would would be too ethical to pump and
| dump Bitcoin?
| throw0101a wrote:
| > _As a billionaire I am not sure he really needs to pump
| bitcoin to make a return._
|
| It's not about making a return, or about having 'enough'.
|
| It's about keeping score, and the person with the highest
| number "wins".
| isatty wrote:
| Billionaires, just like everyone else, love making money.
| cqt100 wrote:
| Most people want to do honest work. If they didn't,
| everyone would be a parasite and the system would collapse.
| krferriter wrote:
| Billionaires buying up all the real estate to ride the
| price wave is not "honest work"
| [deleted]
| holoduke wrote:
| The reality is that 95% of the world population is doing
| shitty work and they would love becoming a parasite to
| escape their current live.
| WJW wrote:
| I'm pretty sure a billionaire does not need to worry about
| being unbanked even in Mexico. There are many other types of
| assets he could hold that would bring as much inflation
| protection as bitcoins with a fraction of the volatility. Now
| obviously in his particular case he's done pretty well with
| his hodlings because the price went up so much, but that is
| not guaranteed to happen again in the future and may in fact
| reverse. As long as it stays so incredibly volatile, holding
| bitcoin should be regarded as speculation first and an
| inflation hedge second.
| janandonly wrote:
| Name one asset (class) that does as well as Bitcoin.
|
| Gold? No, it's only back at its 2012 peak now.
|
| Bonds? I'm laughing.... or crying...
|
| Stocks ... Could be, but very risky... because if QE stops
| tomorrow the stock market will correct -60% or more...
| hellbannedguy wrote:
| Cartel drug money.
|
| (Until Mexico gets a slight handle on systemic corruption
| in every aspect of that country; I have a hard time
| believing anything they claim about anything.)
| bellyfullofbac wrote:
| Hah, love the delusion.
|
| Any mention of interest rate hikes and Bitcoin takes a
| dive too, because as far as I understand it, there's many
| borrowing cheap money (i.e. with low interest rate) to
| "invest" hoping to profit off the ponzi scheme.
| zarzavat wrote:
| Exactly how long does something have to hold its value
| for it to not be a "ponzi scheme?" Because I've been
| reading snide remarks about Ponzi schemes and tulip
| bubbles on HN since bitcoin was in the single figures.
| Kbelicius wrote:
| Madoff started his business in the early 60s and it
| operated until 2008. How long do you think something
| should hold its value til we can, with certainty, say
| that it is not a Ponzi scheme?
| janoside wrote:
| https://www.lynalden.com/bitcoin-ponzi-scheme/
| celticninja wrote:
| Do you have any sources for that?
| arcticbull wrote:
| Doge. You know, the joke currency.
|
| Just wait till you see what happens to the price of
| crypto when Tether QE ends and 65% of all trading volume
| just pops out of existence.
|
| Gotta ask why are you worried that the stock market
| _might_ correct 60% when Bitcoin _did_ correct 65% this
| past month (65K to 28K peak to trough)?
| errantmind wrote:
| Going to need you to thoroughly substantiate Tether doing
| QE. I've looked into this and see nothing other than
| circumstantial evidence.
|
| That said, I fully expect Tether to implode in the next
| year or so.
| arcticbull wrote:
| Tether themselves said the coin is 3% backed by dollars,
| so it's 97% QE. The burden of proof isn't on me, it's on
| Tether. Extraordinary claims require extraordinary proof
| - they claim to have $60B of assets and to be the 7th
| largest player in the global commercial paper space,
| right behind Vanguard. They refuse to substantiate their
| claims with an _audit_. Not to mention they 're 11 people
| on various non-extradition-treaty islands nobody in the
| commercial paper space has ever heard of. And Paolo
| appears to be doing interviews from his mom's basement.
| nwiswell wrote:
| Do you think USDC is also a fraud? They're eating into
| USDT's market share at an alarming rate... If USDT is
| really insolvent, the collapse should happen pretty soon.
| arcticbull wrote:
| Personally, I have always held USDC in high regard. Their
| attestations (not audits, which they have also never
| done) are now roughly 3 months late and they have
| recently changed their wording from being 1:1 backed by
| dollars to being backed by various approved investments.
| [1] It was right at the time they made these changes that
| growth went parabolic.
|
| I'm also suspicious that right as the crypto downturn hit
| they suddenly went out to raise $440M - something I
| wouldn't expect a stablecoin with billions in the bank to
| need to do. [2] However, personally I would assign them a
| risk score of 3/10 ("Hmmm") as compared to Tether's 11/10
| ("Oh sweet mercy") - a sentiment echoed by the Fed [3].
|
| IMO there's a few things propping up USDT, including
| multi-stablecoin liquidity pools doing automatic
| arbitrage against other stablecoins.
|
| [1] https://www.centre.io/usdc-transparency
|
| [2] https://www.coindesk.com/usdc-builder-circle-
| raises-440m
|
| [3] https://www.coindesk.com/us-fed-official-calls-
| tether-a-chal...
| WalterSear wrote:
| They have also been avoiding audits.
| canadianfella wrote:
| You are a billionaire?
| [deleted]
| joshsyn wrote:
| Oh this so much. So many people are envious and think being a
| billionaire is a zero sum game.
| mrtksn wrote:
| The norm in this type of countries is to keep USD, EUR and
| property. Bitcoin is the way to get rich, at least the mental
| model is based on that.
|
| The inflation in these countries is not because of the way
| their economy is structured but because lack of structure and
| integrity. Things are not good in these countries, people
| don't seek to preserve the current wealth(and fail because of
| their currency) but they seek to get out of poverty and those
| who are not in poverty seek to explode their wealth so that
| the can buy a mansion and a Ferrari. The richer ones seek
| ways to hide their wealth out of the reach of the politics
| because in this type of countries the political situation is
| usually unstable and those who get very rich are cronies.
| When the crown falls the cronies need to have an exit
| strategy(sometimes they can adopt but sometimes the new crown
| comes with its own people) and that usually is buying
| property or companies overseas. Now they have the BTC option.
|
| Therefore, in such countries people don't really keep local
| currency long term already(when they do, they will do it to
| get interest rates that at least match the inflation). The
| inflation rate is relevant only when doing business deals,
| financing projects or purchases and adjusting employee
| salaries. No one is losing their wealth to inflation.
| xiphias2 wrote:
| ,, The norm in this type of countries is to keep USD, EUR
| and property''
|
| It was while people had at least some hope to buy a
| property. But nowdays the yearly increase in a property
| price is more than the median yearly salary of a person in
| the poorer countries (this may soon be true for western
| countries as well).
|
| In Eastern Europe people immigrate to west for higher
| salaries so that they can buy an apartment in their home
| country, but if they don't use a loan to buy it, they are
| losing a lot of time to be able to buy a good place that
| they planned to.
|
| Still, as you wrote, in Europe people are still thinking
| very conservatively.
| JumpCrisscross wrote:
| > _the yearly increase in a property price is more than
| the median yearly salary of a person in the poorer
| countries_
|
| This is not a limiting factor for billionaires looking to
| protect their wealth from expropriation, the use case the
| parent post contemplates.
| ajsnigrutin wrote:
| > The norm in this type of countries is to keep USD, EUR
| and property. Bitcoin is the way to get rich, at least the
| mental model is based on that.
|
| Property is hard to buy and sell (takes time), and there
| were a lot of new printed dollars and euros recently.
| mrtksn wrote:
| The inflation is still very low and practically 0 in
| short term and buying/selling property doesn't take that
| long actually. People don't buy and sell all the time
| when they need money, they use financial
| instruments(property ownership unlocks lots of great
| financial instruments). Nobody is buying BTC against
| inflation, it's simply too volatile. You can't know when
| Musk will tweet what, central banks and property laws and
| taxes on the other hand are slow moving and predictable.
| freddie_mercury wrote:
| Property is not hard to buy or sell in a developing
| country. What makes you think it is hard?
| IG_Semmelweiss wrote:
| Probably not universal, but it does seem developing
| countries do not have reliavle title searches or title
| insurance.
|
| Source: tried to buy property for many months in 2
| different foreign countries. Havent been able to do so
| yet mostly due to challenges around title and very poor
| broker listings / knowledge
| freddie_mercury wrote:
| Just because it works differently than you're used to
| doesn't make it "hard", though. It might be "risky",
| which is what it sounds like you're talking about.
|
| But in many ways it is easier than in the west, since you
| don't need to deal with: inspections, appraisals,
| mortgage contingency, closing periods, CCRs, escrow, etc.
|
| I own two pieces of property in a developing country and
| in both cases it took about a day. I gave them cash and
| they handed over the title.
| ajsnigrutin wrote:
| Neither buying or selling can be done overnight, but
| usually takes at minumum weeks, probably months to do
| fully. Bitcoins take seconds.
| freddie_mercury wrote:
| Buying in a developing country can absolutely be done
| same day. I've done it and know several others who have
| done it as well.
|
| It definitely doesn't take months.
| arcticbull wrote:
| > Property is hard to buy and sell (takes time), and
| there were a lot of new printed dollars and euros
| recently.
|
| Supply is only half the equation. Velocity matters. [1]
| The new supply was added due to a drop in velocity, and
| they plan to remove it from circulation once (if)
| velocity returns to normal. This is SOP - and a huge
| advantage of centrally managed currencies. There's no
| doubt in my mind we'd have seen a massive deflationary
| spiral otherwise.
|
| Let me ask you, why do you think this new supply was
| added and what was its impact?
|
| [1] https://www.stlouisfed.org/on-the-
| economy/2014/september/wha...
| ItsMonkk wrote:
| You're confused.
|
| (M2 * M2V) / GDP = 1[0]
|
| That's the formula to calculate M2V.
|
| New supply is not created due to the drop in velocity,
| velocity drops when new supply is added. When M2 rises
| and GDP stays the same, M2V drops.
|
| As you can see from your own chart, when the economy came
| back to normal in 2015, they did not remove it from
| circulation. And yet velocity, when the economy was
| booming, was still dropping. M2 is constantly rising.
| This is forced because we have trade deficits that force
| us to accept debt equal to those deficits.
|
| The impact was rising asset prices. The value of goods
| was not touched at all. Money is not neutral.
|
| [0]: https://fred.stlouisfed.org/graph/?g=F3kb
| arcticbull wrote:
| I'm not sure I see it that way but open to being wrong.
|
| Velocity does not by necessity drop when new supply is
| added. Velocity is how quickly money changes hands in an
| economy - an increase in economic activity is an increase
| in velocity. GDP is calculated from supply and velocity,
| not the other way around, yeah? [1] Adding supply by
| decreasing interest rates can stimulate economic
| activity, increasing both the supply and velocity
| commensurately.
|
| The economy slowed down, money stopped changing hands as
| people were locked inside, and the Fed lowered interest
| rates and allowed the supply to rise to incentivize
| economic activity.
|
| The pandemic scared people into saving. The new money is
| in fact to your point invested, which has led to an
| increase in certain asset prices, but at a rate that far
| outpaces inflation (i.e. the same quantity of Apple
| shares will today buy you a lot more bread than a few
| years back). [2]
|
| As for 2015, the supply was actually contracted in that
| the fed began unwinding its balance sheet. It was doing
| so at a good clip. As you can see here [3] the balance
| sheet dropped from 4.5T to 3.75T before the pandemic.
| However, to the extent inflation remained well
| controlled, it shouldn't be particularly critical to do
| so.
|
| [1] https://www.investopedia.com/articles/investing/05141
| 5/how-c...
|
| [2] https://fred.stlouisfed.org/series/PSAVERT
|
| [3] https://www.federalreserve.gov/monetarypolicy/bst_rec
| enttren...
| ItsMonkk wrote:
| > GDP is calculated from supply and velocity, not the
| other way around, yeah?
|
| No.
|
| Your graph shows that the Fed only starting to unwind
| their balance sheets in 2018. Why was the Velocity of
| Money dropping during a boom phase? It's because it's
| calculated like I said.
|
| Our trade deficits force us to take our greater and
| greater amounts of debt. During recessions - where people
| and companies are unable to take out the debt - the
| government is forced to back us.
|
| The growth of GDP has been constantly dropping because
| our economy has been keeping alive more and more zombie
| companies. Many of these companies are taking out debt,
| and funneling that debt directly back into their stock
| through buybacks. These buybacks increase the demand of
| their stock and reduce the supply, which raises prices,
| which raises their market cap, which allows them to take
| out more debt! Since their market cap has risen, Vanguard
| and Blackrock and all of the other index funds are now
| forced to buy more, which pushes even more demand to
| these stocks.
|
| With the growth of debt, the Fed can now unwind their
| balance sheets. The cycle continues...
| seibelj wrote:
| Property is easy for the government to seize. Bitcoin,
| not so much.
| mrtksn wrote:
| Governments seized a lot of BTC in the past. As soon as
| they have physical access to the owner, it is seizable.
|
| Bulgaria seizing 213K BTC:
| https://www.coininsider.com/bulgarian-government-
| owns-3-bill...
|
| The US seizing 73K BTC:
| https://www.bbc.co.uk/news/technology-54833130
|
| are prime examples.
|
| More recently, US getting back some of the ransom paid:
| https://www.fastcompany.com/90644461/stolen-bitcoin-is-
| hard-...
|
| In fact, seizing property can have many complications and
| be very hard(ownership structures, occupant protection
| laws, debts and obligations etc).
| javert wrote:
| > As soon as they have physical access to the owner, it
| is seizable.
|
| This is incorrect. If the owner doesn't reveal the
| private key, the government cannot seize the bitcoin.
| celticninja wrote:
| But with a bank account they don't need physical access
| to the owner.
|
| https://www.theguardian.com/business/2019/aug/25/british-
| cit...
| celticninja wrote:
| Re th last link, it is possible that they recovered the
| fee paid to the affiliate of the ransomware gang that
| installed the ransomware. This is possibly because the
| affiliate was an informant for the FBI. So it wasn't
| really seizing it, more like returning it.
| neb_b wrote:
| Sure it's seizable, but it can be much harder
| (impossible?) to seize if the owner knows what they are
| doing.
| krferriter wrote:
| Your body is easy to seize
| arcticbull wrote:
| The world's #2 biggest holder of Bitcoin is the Bulgarian
| FBI. The #4 biggest holder of Bitcoin is the US FBI.
|
| Never underestimate the cryptanalytic power of whacking
| someone with a rubber hose until they give you their
| keys.
| gruez wrote:
| > The world's #2 biggest holder of Bitcoin is the
| Bulgarian FBI. The #4 biggest holder of Bitcoin is the US
| FBI.
|
| Source?
|
| >Never underestimate the cryptanalytic power of whacking
| someone with a rubber hose until they give you their
| keys.
|
| No forms of wealth is safe against torture, and I don't
| think people expect bitcoin to be any different. It's
| still vastly more secure than a bank account (which only
| requires a phone call to seize) and is trivially linked
| to your identity (as opposed to pseudonymous bitcoin
| addresses)
| arcticbull wrote:
| Bulgaria seized 200,000 BTC in an organized crime
| crackdown in 2017 [1]. The FBI seized 144,000 BTC in the
| Silk Road crackdown in 2013, though have since auctioned
| some of that off. [2]
|
| I believe there are only 4 addresses with more than
| 100,00BTC each. Satoshi is 1. I believe Bitfinex is 3.
|
| [1] https://www.coindesk.com/bulgarian-government-
| sitting-3-bill...
|
| [2] https://www.forbes.com/sites/andygreenberg/2013/10/25
| /fbi-sa...
| gruez wrote:
| >I believe there are only 4 addresses with more than
| 100,00BTC each. Satoshi is 1. I believe Bitfinex is 3.
|
| The flaw in your analysis is that you assume that there's
| a one to one relationship between an address and a
| person. This is not the case because a typical bitcoin
| wallet has hundreds of addresses and address reuse is
| discouraged. Therefore your conclusion that bulgaria is
| the nth largest bitcoin holder in the world because there
| are are only n addresses with balances larger than it is
| incorrect.
| arcticbull wrote:
| Sorry, I was also quoting a number of other sources. They
| may have done the analysis the same way of course. [1]
| You certainly do raise a good point however, I'm open to
| retracting that since to your point it's probably not
| possible to know for a fact. My bad!
|
| [1] https://medium.com/cryptocurrencies-ups-and-down/top-
| ten-bit...
| logicchains wrote:
| >The inflation in these countries is not because of the way
| their economy is structured but because lack of structure
| and integrity.
|
| Hyperinflation is a monetary phenomenon. If the government
| prints a bunch of money, the purchasing power of people
| holding the currency will go down. If the money supply was
| fixed, there couldn't be such inflation (if it was
| completely fixed, this could cause other issues, but not
| hyperinflation).
| JumpCrisscross wrote:
| > _If the money supply was fixed, there couldn 't be such
| inflation_
|
| Historically inaccurate. If the economic base vanishes,
| inflation--even hyperinflation--will manifest. Fixed
| quantity is no panacea.
|
| What matters is the ratio between money supply and the
| economy. This is why, when the industrial revolution
| switched humanity from stable state/near-zero growth to
| positive-growth mode, we matured past the gold standard,
| first to bimetallism and finally to fiat.
| pibechorro wrote:
| Lol infinite growth as mature. Tell me another.
| arcticbull wrote:
| You're neglecting the impact of velocity of money. Supply
| is only half the equation. [1]
|
| [1] https://www.stlouisfed.org/on-the-
| economy/2014/september/wha...
| nly wrote:
| All that matters to Mexicans is their local purchasing power
| though.
|
| Inflation in Mexico hasn't been that insane for the last 10
| years. You have to look at wage growth and investment returns
| to really make a judgement
| DasIch wrote:
| > Many in developed countries don't understand the challenges
| of a devaluing currency with unlimited supply or the
| difficulty of being unbanked.
|
| I have to admit, being in a developed country, that I
| genuinely don't understand why someone would switch away from
| a local currency that is failing at the task of being a
| currency to a cryptocurrency like bitcoin that is also
| failing at being a currency.
| simonh wrote:
| They are using Bitcoin as an asset much like property,
| bonds, gold, etc, not as a currency. In this respect you
| can think of people in this situation as treating foreign
| currency as an asset as well, as a way to park wealth to
| hedge against domestic inflation and devaluation.
|
| In extremes like Venezuela or Zimbabwe they do fail at
| being currencies as well, but the Peso is a perfectly
| functional currency. It's just not a reliable store of
| wealth. In developed countries we think of our currencies
| as both, but they're two distinct functions.
| celticninja wrote:
| Purchasing power of bitcoin over the last decade has
| increased, the purchasing power of the Mexican peso has
| consistently fallen. https://www.macrotrends.net/2559/us-
| dollar-mexican-peso-exch...
|
| The Venezuelan Bolivar is even worse.
|
| https://tradingeconomics.com/venezuela/currency
|
| If you saw this happening to a close neighbour then you
| would also be worried about your own currency.
|
| Not saying that bitcoin is the salve they need, just that
| perhaps given that context you can understand why it
| appears like an attractive alternative to the local
| currency. Also USD and EUR may be better options but I dont
| think having accounts denominated in these currencies is
| easily available to many people in Venezuela or Mexico. I
| have only (last 3 years or so) been able to hold EUR or USD
| denominated accounts (relatively easily) and I am in the
| UK. I'm sure it was possible to do for longer than that but
| it required hoops to be jumped through that are not always
| the easiest.
| DasIch wrote:
| I agree that the Mexican peso and the Venezuelan Bolivar
| are not doing well, certainly you wouldn't want to use
| them as currency, if you can avoid it.
|
| I can also totally see people using bitcoin as a
| speculative investment. That's also not an argument in
| favour of bitcoin as a currency.
|
| > Also USD and EUR may be better options but I dont think
| having accounts denominated in these currencies is easily
| available to many people in Venezuela or Mexico.
|
| So bitcoin is used not because it's a good currency but
| because it's better than the available alternatives. I
| guess that makes sense.
| dragonwriter wrote:
| Which makes Bitcoin a better investment, but it still a
| shit currency.
|
| Currency is the thing you retain from earnings or cash
| investments out into to cover near-term spending needs.
|
| The things important for currency are low-volatility and
| universal acceptance. Among the things that don't matter
| much for it are "does it tend, on average, to gain
| value".
| krferriter wrote:
| In fact a currency gaining value over time, especially at
| a high rate, is terrible for a monetary system in which
| you want to encourage monetary velocity instead of just
| stashing and saving.
|
| If I have a need to pay someone, I use Venmo or Zelle.
| Bitcoin is slow and expensive and volatile.
| vidarh wrote:
| EUR/USD accounts certainly has been available in the UK
| for much longer, but with many of the same problems as
| for people in developing countries (so I agree with the
| thrust of your comment):
|
| They've often required either a business account, a
| "premium"/high net-worth account of some sort, or dealing
| with an international banking team most normal customers
| either will never know exists or not have easy access to.
| rxhernandez wrote:
| How is it 20,000:1? Google's conversion calculator has it
| around 20:1 right now.
| murukesh_s wrote:
| if you see a 40 year period, inflation is 200k%? (wow)
|
| https://www.inflationtool.com/mexican-peso/1980-to-
| present-v...
| kungito wrote:
| From what I have heard was happening in my home country as
| well during hyperinflation, usually you don't have access
| to the foreign currencies, only the politically connected
| people to. Then they dump the forex into the black currency
| market at ridiculously inflated prices
| notahacker wrote:
| It's a _lot_ easier for a poor person to find someone
| that will give them a dollar for their pesos than some
| satoshis...
| dragonwriter wrote:
| Its 20,000:1 based on the old peso, because in 1993 the
| peso did what was in effect a 1,000:1 reverse split where
| 1,000 old pesos (1,000 MXP) were exchanged for 1 new peso
| (1 MXN).
| fedreserved wrote:
| Had to google that one. It seems your off.
|
| It's still 20_1 now. 20 pesos for every US Dollar
| arcticbull wrote:
| > As a billionaire I am not sure he really needs to pump
| bitcoin to make a return.
|
| What makes you think that billionaires are somehow altruistic
| actors no longer looking for an ROI? Especially an easy one?
| [edit] Or that they're immune to speculative manias?
| SuoDuanDao wrote:
| Anecdotal, but I recently wrote a book that had a quote
| from a prominent, successful person at the opening of each
| chapter. Part of my process was reaching out to the
| originators of these quotes and asking permission to
| include them.
|
| The result was fascinating. With exactly one exception
| (from a university professor) all the people I was able to
| contact were incredibly gracious and encouraging. Based on
| that experience I now believe that to have significant
| success really does require a reflexive attitude of
| generosity and gratitude. I don't think successful people
| are paragons by any means, but when I compare how they
| responded to how the average person would respond to a
| stranger asking a favour, I have to say - I'd definitely
| trust a random billionaire over a random member of my own
| social class.
| gamblor956 wrote:
| I used to work for many extremely wealthy individuals
| when I was at a firm, and I wouldn't trust any of my
| clients farther than I could throw them.
|
| I would absolutely trust a random homeless drug addict
| over the random self-made billionaire. You don't acquire
| a billion dollars by playing nice, fair, or by the rules,
| and the norm is for them to treat people as exploitable
| resources. Being nice is the exception, and generally
| something only done when it provides some sort of benefit
| to them to further their exploitative capabilities.
| karpierz wrote:
| I don't know that it's really indicative of grace if you
| phone someone and ask "hey, I'm including quotes from
| prominent, successful people in a book, do you mind if I
| add you to it?" and they say yes. You haven't really
| asked them for a favour, really you're doing them a
| favour by improving their reputation.
| SuoDuanDao wrote:
| yes, but 'best of luck with the project', or 'sorry I
| don't have time to read an advance copy' goes beyond
| what's expected with that kind of power differential. I
| do think most average people would have felt much more
| entitled to someone admiring their thoughts.
| [deleted]
| el_nahual wrote:
| 10% is far too much of his net worth for a pump-and-dump. A
| much more reasonable use case for holding ~1B worth of BTC for
| a man like RSP (Ricardo Salinas Pliego) is as insurance against
| having assets frozen or nationalized.
|
| A man like him is sufficiently diversified in asset holdings
| that he doesn't _really_ care about the fluctuations of any one
| (property, businesses, fx), but he very much cares about the
| government deciding to freeze his accounts.
|
| It's an enormous irony (if a predictable one) that the biggest
| buyers of a "control your money!" story are not your wacky
| libertarians living in the forest, but the ultra, ultra rich,
| especially those who obtained their fortunes in marginal ways.
| holoduke wrote:
| Seems like bitcoin is a the driver for influencers to earn a
| little money. Without those influencers bitcoin wouldn't be
| followed by the 99.9% wannabee influencers and worth nothing.
| TheGigaChad wrote:
| Hahaha, get some copium and enjoy being poor.
| errantmind wrote:
| Influencers don't really shill Bitcoin, ironically because it
| isn't volatile enough. They shill what are known as 'shitcoins'
| for PnDs
| swiley wrote:
| I honestly wouldn't be shocked if South America embraced bitcoin
| while North America banned it.
| DantesKite wrote:
| They certainly have a larger incentive to figure it out.
| Cenk wrote:
| Mexico is in North America
| BrissyCoder wrote:
| Sure, but no one blinked and eye until you pointed it out.
| Everyone knows that North America really means Anglo America.
| animal_spirits wrote:
| You are not correct on this matter.
| BrissyCoder wrote:
| 90% of the time when people say South America they're
| referring to the poor Spanish speaking countries.
|
| Let me ask you this... do you include Greenland in your
| definition of North America.
| gruez wrote:
| Maybe "latin america" instead? In terms of "north america"
| mexico is definitely the odd one out.
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