(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.) I recently went kitesurfing in Fuerteventura, one of the Canary Islands that is technically part of Spain. If you had seen me, you would have snickered to yourself and said, “man, Arthur really needs to stick to crypto!”
Another phenomenal article by Lord Satoshi's VP of fiat banking affairs. Arthur's posts are the most insightful of ANY financial analyst in the market today - he has a supremely unique ability to mix the horrifying fiat complexity and dread with the hope of a Lord Satoshi/crypto future in comical and educational terms that entertain throughout. I cannot recommend reading multiple times to truly absorb it all.
My guess is the Alt is Filecoin, Hayes got me onto Token Terminal after saying check the protocols that are making money/revenue and Filecoin is top 3 in revenue generated on token terminal & Arthur would see that daily. Plus with Filecoin releasing FVM & lilypad tech for AI & compute over data it has to up there on his list. Plus his family office is based in Singapore and Filecoin is all over the Asian markets...
Hi Art, the best indicator is the ISM for the next bull run, it is forecast to peak in Feb 2025 with a 6 month tail into Sept/October, we are currently in recovery/growth phrase, when it gets above 50 the game is on!!. http://uk.investing.com/economic-calendar/ism-manufacturing-pmi-173
Bear in mind though, that FOMO delusion may be losing some of its effect with each cycle. Filecoin’s oligarchy may be paying themselves the fees to create an illusion of adoption, analogous to ICOs that buy their token (over and over again as EOS ostensibly did with their numerous ICO auctions, HEX etc) from themselves creating an illusion of massive investment.
Filecoin is just another in a long succession of shitcoins like Ethereum and pretty much everything that’s not Bitcoin.
Hi Art, it really is hard to tell, it really is just a hunch. But I just checked Token Terminal & Filecoin made $20 million in fees in the last 180 days to put that in perspective ICP made $150k. I just remember Hayes saying follow the money and that he checked Token Terminal every morning to see what was making money, it always amazed me no one was talking about the revenue FIL was generating. Plus it is down 99% from its all time high, the network is still growing & building. The dev team is one of the best in business. I’m just trying to take in all probabilities, they have the data & storage space, they are building the compute over data element and thats what AI really needs. I also really like AKT but can’t see it being that. He’s doing a keynote at Token 2049 in Singapore on the 13-14 Sept and he is going to talk about it there so we will find out soon enough. Good Luck Pete
The vast majority of share in the decentralised data storage space, the compute on that data will be critical when AI comes in so there’s a catalyst that will drive utility and adoption.
Chip I’ve had a very quick look, it looks very similar to Akash & Render networks. If it was me I think I’d look at Akash & Render and my reasoning is you’re going to get more bang for your buck. The supply is a lot lower in Bittensor but I reckon it would be hard to get a 10x on it. Where I can see Akash & Render doing 10x both in the next bullrun. I hope this helps in some way.
Hi Chip, you need to click on revenue fees and you should see it, if I could attach a screenshot to help I would but that doesn’t look like substack allows it. Plus Token Terminal everything used to be free but they have but a lot of it behind a paywall recently. In the protocol’s lifespan it has Filecoin has amassed $1.5 billion in revenue & Eth is $8.7 billion.
enjoyed the thoughts, i have some questions though.
wasn't Trump president for all of 2020 though? and would there not be lag effects on the purchasing power from all the print print in 2020? how is "inflation and raises accounted for" in the two charts you present? just asking don't hurt me
A key point is that investments that will do well either have an income (e.g. BigTech) or no expenses (e.g. a hard asset such as Bitcoin). Thus ostensibly why Hayes chose Filecoin per Peter Killops’ comment on this page.
First my summary of this blog.
• With such a large debt-to-GDP ratio, the Fed is actually injecting stimulus by forcing interest rates higher because it’s both paying interest on reserves parked at its windows, while also increasing the interest payments of the U.S. Treasury. Volker didn’t have to try to control the market price (i.e. interest rate) because he wasn’t staring at a global depression, government collapse when he only did QT, as the GDP-to-debt ratio was minuscule. I must correct Hayes, that the Fed isn’t making a mistake by choice as they are trapped and have no other choice.
• Eventually the fiscal situation will spiral into out-of-control inflation unless the government can ramp up to financial repression on steroids (ergo CBDCs) to force depositors to save at negative real interest rates. In this way, the inflation can be reduced/minimized (and hoping the governments can inflate away their debt-to-GDP problem over the very long-term) by essentially bleeding depositors of wealth with an inflation tax, albeit at hopefully lower inflation than it would be if unchecked with the worsening status quo.
• To get the significant/surviving/most-favored financial players to play along given they would no longer be able to earn risk-free profits on reserves parked at the Fed, they will be allowed to offer ETFs (e.g. a Bitcoin ETF) for which they can take risk-free fees. As Hayes had explained in his Kaiseki blog (https://cryptohayes.substack.com/p/kaiseki-b15230bdd09e) this would allow speculative profits in CBDC fiat, but not delivery of the underlying asset. Thus speculative bubbles blown by still massive increases in QE to fund these massive fiscal deficits, because such financial repression will likely also require the government to become even more socialist (think UBI paid with CBDCs).
This plan will fail because Westerners aren’t Asians. Westerners will break out of this walled garden, when they can compare the freedom of the underlying asset to the ETFs which send profits back to overzealous governments which will essentially confiscate it all with CBDCs, taxes, wealth taxes, decrees, edicts, etc.. The truculent, uncooperative Westerners (especially North Americans!) will force the government to become even more totalitarian as the governments attempt to hold on for dear life (HODL).
Also Satoshi put a poison-pill in Bitcoin…because anyone who does not know the following will lose all their Bitcoins. There is a 13+ million BTC anyone can spend booty created by the 2017 soft fork. The pay-to-script-hash that enables the SegWit and all that Blockstream Power Rangers developers “users controlled Bitcoin” (User Activation Soft Fork ASAF) nonsense (i.e. the imbecile, erroneous concept that Bitcoin is a democracy and not here to destroy democracy), is anyone can spend in the legacy protocol. Satoshi intentionally laid this trap and set the blocks to 1 MiB, so that it will be immutable and the future reserve currency. Bitcoin is merely the 1988 Economic Magazine's cover story Phoenix. I even dug up the 1998 anonymous user group post that foreshadowed by essentially describing its design. Do you not see a 10 year cycle? 1988 announced. 1998 design leaked anonymously. 2008 launched. 2018 reached popular awareness. And 2028 it rises as the Phoenix fulfilled.
The 2017 soft fork never hard forked off, but it will be forced to. And legacy protocol hodlers will receive both forks, but those not hodling in addresses that begin with 1 will only receive the non-legacy fork and thus they will receive a nearly worthless token (because the miners will have first dibs on the anyone can spend).
The looming Bitcoin ETFs will be completely drained when the miners restore the Nash Equilibrium that the 2017 impostor soft fork broke, thus taking as “anyone can spend” donations all BTC that are stored in addresses that begin with 3 or bc1. Actually what BlackRock will be doing is acting like they are innocent when everyone is fleeced and destroyed, while they are actually working for the colonial masters. This will be the hack on centralized keys that does not require access to the keys because it will come from the miners. Read the fine print on the Terms and Conditions of BlackRocks ETF filings. So what BlackRock’s ETF investors will end up with is essentially soft fork impostor tokens and they will be capital control marooned on the CBDC regime.
@Rob-yc7bs I was the person who figured out that Satoshi employed double-hashing precisely to combat quantum computing with colored coins. You do not know what you are talking about. Bitcoin is only fiat if TPTB control 51% of the mining hashrate (which I believe they will but they will not reveal their hand until it is time for the Antichrist).
He knows what he is doing. Wouldn't be reading it otherwise. That said I look at all perspectives and Dr. Charles his view that stablecoins will capture all the utility and make BTC tumble was conveniently left out of the equation by Mr. Hayes :)
That said Mr. Hayes has shared his opinion that he believes BTC will capture utility in that IOT/AI will need hard decentralized currency so BTC.
I was referring to Dr.Charles not knowing what he is doing. You can never do just one thing, that is what these sophists always forget to incorporate in their model. Have you read my detailed comment yet?
Regarding your added detail, Dr. Charles may be correct about stablecoins capturing all the value for the consumer. But firstly that would be the stupidest assertion that a peg to the dollar would provide any utility for the wealthy who want a hedge against the dollar. And for the consumer/user they may be algorithmic stablecoins which are entirely decentralized, especially when these can be a decentralized way to never pay any tax on capital gains on the appreciation of the underlying asset. There are many variables in play and I seriously doubt Dr. Charles is fully knowledgeable about all the technology.
The elite don't want a hedge against the dollar, they want to keep the dollar dominance right where it is. They're happy to get free money while normal plebs get inflated away. It's the informed non-elite (and countries that saved up all US debt & now realize the US is about to stimmy their own economy at their expense) that need to hedge. Hence they're reluctant to buy up bonds now.
BTC also still doesn't have a solution to the end of the mining incentives to maintain the decentralized network?
Mr. Hayes also mentioned the extra debt isn't a guarantee assets, like BTC, will go up.
"Just because a government borrows doesn’t mean the money supply will increase and subsequently drive inflation. The debt burden only boosts the money supply if there are no natural buyers.'"
Thank you for your points and thoughtful discussion. My reactions.
The 10% wealthy are not the 0.1% elite (c.f. blog for my comment https://open.substack.com/pub/cryptohayes/p/fungible?comments=true&commentId=41390187). The wealthy are increasingly aware that the world is mired in inescapable deglobalization and financial repression (https://open.substack.com/pub/cryptohayes/p/double-happiness?comments=true&commentId=41381042). Thus they need a hedge against the demise of the U.S. dollar as the world’s reserve currency by ~2028-2033ish (after the dollar strengthens into the WWIII Thucydides trap ~2027ish) and moreover against the unavoidable, more totalitarian forms of financial repression looming such as capital controls and Hotel California-esque CDBCs. So while the elite may not want the 10% wealthy to diversify, they will not be able to entirely stop them from doing so, although the authorities will try and probably first with more subtle forms of financial repression such as directing them towards ETFs of hard assets (e.g. Bitcoin) wherein those fools will not control their private keys. Hayes explains that these wealthy have numerous OTC options for averting capital controls. Also Hayes corrects points out that the status of the U.S. dollar as the reserve currency limits the capital controls that can be effectively put on the U.S. dollar. So if TPTB elite are forced to go hardcore totalitarianism on the U.S. dollar (e.g. canceling cash, etc) then they have sealed the fate of the loss of its reserve currency status which will transfer to Bitcoin because no other entity (not even China as a regional power) is capable of reigniting the globalization model that erected the U.S. dollar as the world’s reserve currency.
One solution to the end of the programmed mining reward (wherein models of transaction fees seem to imply incentives incompatibility to mine the longest chain, although this is disputed) is by that time TPTB who I think launched Bitcoin (as I wrote they’ve been announcing it on a 10 year cycle since the 1988 Economist Magazine cover story) will surreptitiously control 51% of the mining. Bitcoin fanatics like Hayes ostensibly do not (at least publicly) appreciate how diabolical Bitcoin is in the long-run.[1] Akin to death and taxes, the power-law distribution of wealth and fungible resources is undefeated. I have for nearly a decade been publicly positing that Bitcoin is TPTB’s plan to implement the final stages of Biblical Revelation where all the control and wealth will be controlled on the proverbial Seven Hills (of metaphorically Rome or Jerusalem).
Hayes’ entire correct thesis in his blogs is that there will not be enough natural buyers of sovereign debt. That is a given because Europe hit the ZIRP bound and more saliently because government debt-to-GDP ratios are beyond the level where they could sustainably pay a positive real interest rate. Thus the only buyers are some form of financially repressed. I believe this is inarguable. I am wondering if you have even comprehended his blogs when you quote that out-of-context under the pretense of there being any hope in Hades of natural buyers for sovereign debt. The only natural buyers will be short-term speculators of a pending recession.
Hayes quotes him only w.r.t. to their plan for financial repression, not Bitcoin expertise. The first words out of Dr. Charles’ ignorant mouth at your linked timestamp are strong evidence that he is totally ignorant of Bitcoin. Satoshi obviously didn’t design Bitcoin to be a transacting medium, when he intentionally set the block size to 1 MiB and then disappeared (with the Wikileaks excuse conveniently provided to him by Rothschild) when he was being pressured to increase it or justify the hard limit. Bitcoin was designed to kick off all the plebs and be a global reserve currency asset with only 7 transactions per second for the entire world. You really should wrap your mind around my comments about how the 2017 soft-fork will be destroyed by a poison-pill (“anyone can spend” of pay-to-script-hash) that Satoshi put in Bitcoin.
Dr. Charles can only think of currency in terms of a medium-of-exchange, and he forgets that reserve currencies are a unit-of-account. He is conflating, ostensibly because the dollar did. But throughout history there were two-tiered currency regimes.
While he is correct about stablecoins being preferred for a medium-of-exchange, he seems to forget that if stablecoins are not decentralized then the bilateral (i.e. permissionlessness) is lost. And you can not have an algorithmically backed stablecoin without an underlying non-stablecoin, decentralized crypto asset.
18:15 timestamp in Dr. Charles’ explanation of why he thinks Bitcoin will decline to 0, he thinks the only utility of the Bitcoin is as a payment system. This is egregiously myopic. The world will naturally gravitate to a reserve currency, and the void left by the natural, unavoidable destruction of the U.S. dollar’s role in that regard because of deglobalization forced by end-of-line, global debt-to-GDP ratios means that there will only be Bitcoin available to fill that looming void.
Btw, I forgot to mention that one of the key drivers of CBDC is that it’s a regulatory end-run around the political unpopularity of increased taxes, given they enable negative real interest rates on savings (i.e. financial repression) thus a hidden tax.
[1] Additionally I wonder if Hayes even knows that if you do not store your Bitcoin in addresses that start with a 1 (not 3 nor bc1) then you will have all your Bitcoin donated to the miners circa ~2028. This could be a very costly ignorance for him. I am thinking he does not even read the comments here.
Arthur, couldn't the Fed just set a cap on the amount of reserves where it will pay the IORB rate? Couldn't that have the effect of bolstering the regionals while kneecapping the majors (instead of total carnage)?
If that were the case, the majors would try to push for new high-fee products, but regionals could raise their customer deposit interest rates to be more appealing. (Which would have the added effect of supporting local businesses and small-caps.)
Another phenomenal article by Lord Satoshi's VP of fiat banking affairs. Arthur's posts are the most insightful of ANY financial analyst in the market today - he has a supremely unique ability to mix the horrifying fiat complexity and dread with the hope of a Lord Satoshi/crypto future in comical and educational terms that entertain throughout. I cannot recommend reading multiple times to truly absorb it all.
Another Arthur Hayes face-ripping tour de force. HODL.
My guess is the Alt is Filecoin, Hayes got me onto Token Terminal after saying check the protocols that are making money/revenue and Filecoin is top 3 in revenue generated on token terminal & Arthur would see that daily. Plus with Filecoin releasing FVM & lilypad tech for AI & compute over data it has to up there on his list. Plus his family office is based in Singapore and Filecoin is all over the Asian markets...
How confident are you? I want to buy before the article and keynote...
Art is looks like I was right!! - https://www.coindesk.com/markets/2023/09/05/the-relationship-between-bitcoin-and-interest-rates-is-breaking-down-arthur-hayes/
I had a feeling you would be! Going to accumulate a bit.....let's harvest in the bull!
Hi Art, the best indicator is the ISM for the next bull run, it is forecast to peak in Feb 2025 with a 6 month tail into Sept/October, we are currently in recovery/growth phrase, when it gets above 50 the game is on!!. http://uk.investing.com/economic-calendar/ism-manufacturing-pmi-173
Bear in mind though, that FOMO delusion may be losing some of its effect with each cycle. Filecoin’s oligarchy may be paying themselves the fees to create an illusion of adoption, analogous to ICOs that buy their token (over and over again as EOS ostensibly did with their numerous ICO auctions, HEX etc) from themselves creating an illusion of massive investment.
Filecoin is just another in a long succession of shitcoins like Ethereum and pretty much everything that’s not Bitcoin.
https://anonymint1.substack.com/p/decentralized-data-storage-and-delivery
Hi Art, it really is hard to tell, it really is just a hunch. But I just checked Token Terminal & Filecoin made $20 million in fees in the last 180 days to put that in perspective ICP made $150k. I just remember Hayes saying follow the money and that he checked Token Terminal every morning to see what was making money, it always amazed me no one was talking about the revenue FIL was generating. Plus it is down 99% from its all time high, the network is still growing & building. The dev team is one of the best in business. I’m just trying to take in all probabilities, they have the data & storage space, they are building the compute over data element and thats what AI really needs. I also really like AKT but can’t see it being that. He’s doing a keynote at Token 2049 in Singapore on the 13-14 Sept and he is going to talk about it there so we will find out soon enough. Good Luck Pete
I think it’s Filecoin too Pete.
The vast majority of share in the decentralised data storage space, the compute on that data will be critical when AI comes in so there’s a catalyst that will drive utility and adoption.
Peter, you ever evaluate TAO (Bittensor)?
Never heard of it Chip, do you have a links to the whitepaper or website?
Bittensor.com
Chip I’ve had a very quick look, it looks very similar to Akash & Render networks. If it was me I think I’d look at Akash & Render and my reasoning is you’re going to get more bang for your buck. The supply is a lot lower in Bittensor but I reckon it would be hard to get a 10x on it. Where I can see Akash & Render doing 10x both in the next bullrun. I hope this helps in some way.
Cheers let me have a look.
Peter, I just checked and I don't see that Filecoin has anywhere near that amount in fees over last 180 days - am I missing something?
30 day sum of $1M?
Hi Chip, you need to click on revenue fees and you should see it, if I could attach a screenshot to help I would but that doesn’t look like substack allows it. Plus Token Terminal everything used to be free but they have but a lot of it behind a paywall recently. In the protocol’s lifespan it has Filecoin has amassed $1.5 billion in revenue & Eth is $8.7 billion.
Hi Chip that sounds about right, I’ve just sent you the screenshot via @ X/twitter mention :)
Thanks, appreciated
You are a real one for this response! I bet you are right. I look forward to reading his next essay and the keynote. Cheers
Wtf is this shitcoin you speak of Lad?!
Don't tell me it's $ASTO!
Guy above thinks Filecoin. Looks to be down 99%....
Filecoin is just another in a long succession of shitcoins like Ethereum and pretty everything that’s not Bitcoin.
https://anonymint1.substack.com/p/decentralized-data-storage-and-delivery
Correct and don't worry, I'm 99% net worth in king corn.
Bitcoin can't 50X this cycle though. For me it's worth a small gamble.
Cheers.
I also had acknowledged it might FOMO:
https://cryptohayes.substack.com/p/double-happiness/comment/41381042
Cheers.
Two horses one ass... fuckin' classic
Dying to know the AI shitcoin... my guess is still AKT and the 99% comment is a bit of misdirection.
Luke Gromen use that term a lot, you should check out his work!
Guy above says Filecoin. Looks to be down 98.5% from it's 2021 highs...
enjoyed the thoughts, i have some questions though.
wasn't Trump president for all of 2020 though? and would there not be lag effects on the purchasing power from all the print print in 2020? how is "inflation and raises accounted for" in the two charts you present? just asking don't hurt me
ICP?
Should’ve read this blog first before commenting on 𝘿𝙤𝙪𝙗𝙡𝙚 𝙃𝙖𝙥𝙥𝙞𝙣𝙚𝙨𝙨 (https://open.substack.com/pub/cryptohayes/p/double-happiness?comments=true&commentId=41381042).
QUOTE: “[chart showing Treasury interest payments exceed nominal GDP, growing faster than GDP] 𝘐 𝘦𝘴𝘵𝘪𝘮𝘢𝘵𝘦 𝘵𝘩𝘢𝘵 ~$23 𝘣𝘪𝘭𝘭𝘪𝘰𝘯 𝘪𝘯 [net] 𝘭𝘪𝘲𝘶𝘪𝘥𝘪𝘵𝘺 𝘪𝘴 𝘯𝘦𝘵 𝘪𝘯𝘫𝘦𝘤𝘵𝘦𝘥 𝘦𝘷𝘦𝘳𝘺 𝘮𝘰𝘯𝘵𝘩.”
A key point is that investments that will do well either have an income (e.g. BigTech) or no expenses (e.g. a hard asset such as Bitcoin). Thus ostensibly why Hayes chose Filecoin per Peter Killops’ comment on this page.
First my summary of this blog.
• With such a large debt-to-GDP ratio, the Fed is actually injecting stimulus by forcing interest rates higher because it’s both paying interest on reserves parked at its windows, while also increasing the interest payments of the U.S. Treasury. Volker didn’t have to try to control the market price (i.e. interest rate) because he wasn’t staring at a global depression, government collapse when he only did QT, as the GDP-to-debt ratio was minuscule. I must correct Hayes, that the Fed isn’t making a mistake by choice as they are trapped and have no other choice.
• Eventually the fiscal situation will spiral into out-of-control inflation unless the government can ramp up to financial repression on steroids (ergo CBDCs) to force depositors to save at negative real interest rates. In this way, the inflation can be reduced/minimized (and hoping the governments can inflate away their debt-to-GDP problem over the very long-term) by essentially bleeding depositors of wealth with an inflation tax, albeit at hopefully lower inflation than it would be if unchecked with the worsening status quo.
• To get the significant/surviving/most-favored financial players to play along given they would no longer be able to earn risk-free profits on reserves parked at the Fed, they will be allowed to offer ETFs (e.g. a Bitcoin ETF) for which they can take risk-free fees. As Hayes had explained in his Kaiseki blog (https://cryptohayes.substack.com/p/kaiseki-b15230bdd09e) this would allow speculative profits in CBDC fiat, but not delivery of the underlying asset. Thus speculative bubbles blown by still massive increases in QE to fund these massive fiscal deficits, because such financial repression will likely also require the government to become even more socialist (think UBI paid with CBDCs).
This plan will fail because Westerners aren’t Asians. Westerners will break out of this walled garden, when they can compare the freedom of the underlying asset to the ETFs which send profits back to overzealous governments which will essentially confiscate it all with CBDCs, taxes, wealth taxes, decrees, edicts, etc.. The truculent, uncooperative Westerners (especially North Americans!) will force the government to become even more totalitarian as the governments attempt to hold on for dear life (HODL).
Also Satoshi put a poison-pill in Bitcoin…because anyone who does not know the following will lose all their Bitcoins. There is a 13+ million BTC anyone can spend booty created by the 2017 soft fork. The pay-to-script-hash that enables the SegWit and all that Blockstream Power Rangers developers “users controlled Bitcoin” (User Activation Soft Fork ASAF) nonsense (i.e. the imbecile, erroneous concept that Bitcoin is a democracy and not here to destroy democracy), is anyone can spend in the legacy protocol. Satoshi intentionally laid this trap and set the blocks to 1 MiB, so that it will be immutable and the future reserve currency. Bitcoin is merely the 1988 Economic Magazine's cover story Phoenix. I even dug up the 1998 anonymous user group post that foreshadowed by essentially describing its design. Do you not see a 10 year cycle? 1988 announced. 1998 design leaked anonymously. 2008 launched. 2018 reached popular awareness. And 2028 it rises as the Phoenix fulfilled.
The 2017 soft fork never hard forked off, but it will be forced to. And legacy protocol hodlers will receive both forks, but those not hodling in addresses that begin with 1 will only receive the non-legacy fork and thus they will receive a nearly worthless token (because the miners will have first dibs on the anyone can spend).
The looming Bitcoin ETFs will be completely drained when the miners restore the Nash Equilibrium that the 2017 impostor soft fork broke, thus taking as “anyone can spend” donations all BTC that are stored in addresses that begin with 3 or bc1. Actually what BlackRock will be doing is acting like they are innocent when everyone is fleeced and destroyed, while they are actually working for the colonial masters. This will be the hack on centralized keys that does not require access to the keys because it will come from the miners. Read the fine print on the Terms and Conditions of BlackRocks ETF filings. So what BlackRock’s ETF investors will end up with is essentially soft fork impostor tokens and they will be capital control marooned on the CBDC regime.
QUOTE: “𝘉𝘪𝘵𝘤𝘰𝘪𝘯 𝘪𝘴𝘯'𝘵 𝘳𝘦𝘢𝘭 𝘮𝘰𝘯𝘦𝘺. 𝘐𝘵'𝘴 𝘢 𝘧𝘪𝘢𝘵 𝘤𝘶𝘳𝘳𝘦𝘯𝘤𝘺. 𝘈𝘯𝘥 𝘣𝘪𝘵𝘤𝘰𝘪𝘯 𝘸𝘰𝘯'𝘵 𝘸𝘰𝘳𝘬 𝘰𝘯 𝘵𝘩𝘦 𝘯𝘦𝘸 𝘘𝘶𝘢𝘯𝘵𝘶𝘮 𝘴𝘺𝘴𝘵𝘦𝘮.”
@Rob-yc7bs I was the person who figured out that Satoshi employed double-hashing precisely to combat quantum computing with colored coins. You do not know what you are talking about. Bitcoin is only fiat if TPTB control 51% of the mining hashrate (which I believe they will but they will not reveal their hand until it is time for the Antichrist).
Interesting you should quote Dr. Charles Calomiris on fiscal dominance. He's also saying BTC will go to zero within a decade :)
Not like his plan will succeed or he knows what the f*ck he is doing. Find my very detailed comment posted today.
He knows what he is doing. Wouldn't be reading it otherwise. That said I look at all perspectives and Dr. Charles his view that stablecoins will capture all the utility and make BTC tumble was conveniently left out of the equation by Mr. Hayes :)
That said Mr. Hayes has shared his opinion that he believes BTC will capture utility in that IOT/AI will need hard decentralized currency so BTC.
I was referring to Dr.Charles not knowing what he is doing. You can never do just one thing, that is what these sophists always forget to incorporate in their model. Have you read my detailed comment yet?
https://open.substack.com/pub/cryptohayes/p/kite-or-board?comments=true&commentId=41383074
Regarding your added detail, Dr. Charles may be correct about stablecoins capturing all the value for the consumer. But firstly that would be the stupidest assertion that a peg to the dollar would provide any utility for the wealthy who want a hedge against the dollar. And for the consumer/user they may be algorithmic stablecoins which are entirely decentralized, especially when these can be a decentralized way to never pay any tax on capital gains on the appreciation of the underlying asset. There are many variables in play and I seriously doubt Dr. Charles is fully knowledgeable about all the technology.
Why do you seriously doubt he doesn't know enough on Bitcoin, he's not some congress dude taking bribes. Mr. Hayes respects him enough to quote him.
You can hear Dr. Charles his opinion around this time https://youtu.be/aQ2Sth40Lvk?feature=shared&t=1216
The elite don't want a hedge against the dollar, they want to keep the dollar dominance right where it is. They're happy to get free money while normal plebs get inflated away. It's the informed non-elite (and countries that saved up all US debt & now realize the US is about to stimmy their own economy at their expense) that need to hedge. Hence they're reluctant to buy up bonds now.
BTC also still doesn't have a solution to the end of the mining incentives to maintain the decentralized network?
Mr. Hayes also mentioned the extra debt isn't a guarantee assets, like BTC, will go up.
"Just because a government borrows doesn’t mean the money supply will increase and subsequently drive inflation. The debt burden only boosts the money supply if there are no natural buyers.'"
Thank you for your points and thoughtful discussion. My reactions.
The 10% wealthy are not the 0.1% elite (c.f. blog for my comment https://open.substack.com/pub/cryptohayes/p/fungible?comments=true&commentId=41390187). The wealthy are increasingly aware that the world is mired in inescapable deglobalization and financial repression (https://open.substack.com/pub/cryptohayes/p/double-happiness?comments=true&commentId=41381042). Thus they need a hedge against the demise of the U.S. dollar as the world’s reserve currency by ~2028-2033ish (after the dollar strengthens into the WWIII Thucydides trap ~2027ish) and moreover against the unavoidable, more totalitarian forms of financial repression looming such as capital controls and Hotel California-esque CDBCs. So while the elite may not want the 10% wealthy to diversify, they will not be able to entirely stop them from doing so, although the authorities will try and probably first with more subtle forms of financial repression such as directing them towards ETFs of hard assets (e.g. Bitcoin) wherein those fools will not control their private keys. Hayes explains that these wealthy have numerous OTC options for averting capital controls. Also Hayes corrects points out that the status of the U.S. dollar as the reserve currency limits the capital controls that can be effectively put on the U.S. dollar. So if TPTB elite are forced to go hardcore totalitarianism on the U.S. dollar (e.g. canceling cash, etc) then they have sealed the fate of the loss of its reserve currency status which will transfer to Bitcoin because no other entity (not even China as a regional power) is capable of reigniting the globalization model that erected the U.S. dollar as the world’s reserve currency.
One solution to the end of the programmed mining reward (wherein models of transaction fees seem to imply incentives incompatibility to mine the longest chain, although this is disputed) is by that time TPTB who I think launched Bitcoin (as I wrote they’ve been announcing it on a 10 year cycle since the 1988 Economist Magazine cover story) will surreptitiously control 51% of the mining. Bitcoin fanatics like Hayes ostensibly do not (at least publicly) appreciate how diabolical Bitcoin is in the long-run.[1] Akin to death and taxes, the power-law distribution of wealth and fungible resources is undefeated. I have for nearly a decade been publicly positing that Bitcoin is TPTB’s plan to implement the final stages of Biblical Revelation where all the control and wealth will be controlled on the proverbial Seven Hills (of metaphorically Rome or Jerusalem).
Hayes’ entire correct thesis in his blogs is that there will not be enough natural buyers of sovereign debt. That is a given because Europe hit the ZIRP bound and more saliently because government debt-to-GDP ratios are beyond the level where they could sustainably pay a positive real interest rate. Thus the only buyers are some form of financially repressed. I believe this is inarguable. I am wondering if you have even comprehended his blogs when you quote that out-of-context under the pretense of there being any hope in Hades of natural buyers for sovereign debt. The only natural buyers will be short-term speculators of a pending recession.
Hayes quotes him only w.r.t. to their plan for financial repression, not Bitcoin expertise. The first words out of Dr. Charles’ ignorant mouth at your linked timestamp are strong evidence that he is totally ignorant of Bitcoin. Satoshi obviously didn’t design Bitcoin to be a transacting medium, when he intentionally set the block size to 1 MiB and then disappeared (with the Wikileaks excuse conveniently provided to him by Rothschild) when he was being pressured to increase it or justify the hard limit. Bitcoin was designed to kick off all the plebs and be a global reserve currency asset with only 7 transactions per second for the entire world. You really should wrap your mind around my comments about how the 2017 soft-fork will be destroyed by a poison-pill (“anyone can spend” of pay-to-script-hash) that Satoshi put in Bitcoin.
Dr. Charles can only think of currency in terms of a medium-of-exchange, and he forgets that reserve currencies are a unit-of-account. He is conflating, ostensibly because the dollar did. But throughout history there were two-tiered currency regimes.
While he is correct about stablecoins being preferred for a medium-of-exchange, he seems to forget that if stablecoins are not decentralized then the bilateral (i.e. permissionlessness) is lost. And you can not have an algorithmically backed stablecoin without an underlying non-stablecoin, decentralized crypto asset.
18:15 timestamp in Dr. Charles’ explanation of why he thinks Bitcoin will decline to 0, he thinks the only utility of the Bitcoin is as a payment system. This is egregiously myopic. The world will naturally gravitate to a reserve currency, and the void left by the natural, unavoidable destruction of the U.S. dollar’s role in that regard because of deglobalization forced by end-of-line, global debt-to-GDP ratios means that there will only be Bitcoin available to fill that looming void.
Btw, I forgot to mention that one of the key drivers of CBDC is that it’s a regulatory end-run around the political unpopularity of increased taxes, given they enable negative real interest rates on savings (i.e. financial repression) thus a hidden tax.
[1] Additionally I wonder if Hayes even knows that if you do not store your Bitcoin in addresses that start with a 1 (not 3 nor bc1) then you will have all your Bitcoin donated to the miners circa ~2028. This could be a very costly ignorance for him. I am thinking he does not even read the comments here.
Peter, how are you playing it?
Love it! Nice guess…
for those of us who can't go to Token2049, any idea which shitcoin he's talking about?
Outstanding!
Arthur, couldn't the Fed just set a cap on the amount of reserves where it will pay the IORB rate? Couldn't that have the effect of bolstering the regionals while kneecapping the majors (instead of total carnage)?
If that were the case, the majors would try to push for new high-fee products, but regionals could raise their customer deposit interest rates to be more appealing. (Which would have the added effect of supporting local businesses and small-caps.)
Great artilcle.
Thx for the provided information Arthur !!!
Incredible article. Thank you