Bitcoin Daily Discussion, December 09, 2020

Daily Discussion, December 09, 2020
Billionaire Ray Dalio Recognizes Bitcoin as Gold Alternative
I think it's time to stop recommending Ledger as a hardware wallet.
Billionaire Investor Ray Dalio Turning Bullish On Bitcoin
Remember to Zoom Out
Fantastic mural in Wan Chai, Hong Kong
The Tipping Point With Bitcoin
A financial system bailed out
If your details were leaked by Ledger, you should demand a refund.
5 years ago bitcoin was too expensive
Unpopular opinion: Not your keys not your coins logic doesn’t make sense to me. Chances I will die, lose my own keys, get robbed or get screwed over by a friend or family members using multi sig seems like a higher risk than a trusted third party.
Interesting Fact: Bitcoin's market capitalization is roughly 1/4 that of silver
Venezuela Traded in Bitcoin with Turkey and Iran, Passes New Anti-Blockage Law
Coinbase asking too much personnal data, any good alternative?
French Government Surprises Companies and Citizens With Proposal Of STRICT New Requirements For Crypto Traders...
Where i can sell stuff for bitcoin ?
I wonder if this guy could do AMA about his life today.
One of the most empowering things about Bitcoin is realizing that so called experts sometimes have no idea what they’re talking about.
RSK is evolving: “We’re very excited with this release as it is a big step towards a full decentralized smart contract platform on top of Bitcoin,” - Chief Data Scientist
Is coldcard mk3 the best hardware wallet atm? In terms of security
After it transformed my life from a broke college kid to a full-time business owner and crypto advocate, I decided to get some art made to represent my journey. I would not have become the amazing person I am today without this technological achievement. Thank you, Satoshi!
Metcalfe's law: What are the pros and cons of this theory?
It's amazing to see BTC close above $18k for 15 days (non-consecutive) in 2020, and counting. Back in 2017, BTC only closed above $18k for three days.
Another Bank Becomes Bullish on Bitcoin - Wells Fargo
BTC003: Bitcoin & A Deflationary World w/ Jeff Booth

Daily Discussion, December 09, 2020

Posted: 08 Dec 2020 11:00 PM PST

Please utilize this sticky thread for all general Bitcoin discussions! If you see posts on the front page or /r/Bitcoin/new which are better suited for this daily discussion thread, please help out by directing the OP to this thread instead. Thank you!

If you don't get an answer to your question, you can try phrasing it differently or commenting again tomorrow.

Join us in the r/Bitcoin Chatroom!

Please check the previous discussion thread for unanswered questions.

submitted by /u/rBitcoinMod
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Billionaire Ray Dalio Recognizes Bitcoin as Gold Alternative

Posted: 08 Dec 2020 10:30 PM PST

submitted by /u/mebinici
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I think it's time to stop recommending Ledger as a hardware wallet.

Posted: 09 Dec 2020 03:51 AM PST

After reading approximately the 700ths post of some poor chap being phished, because of the negligence and incompetence of this company, I will never recommend anybody to buy a Ledger product again. I hope you agree and strike them from all your guides, how-tos and recommendations.

Imagine paying $70 for a shitty little hardware wallet, but to these greedy fucks, that's not enough. They HAVE to have your identifying personal information FOREVER, including your name and physical home address, just to squeeze out a few more Euros of bottom line per customer by marketing or probably outright selling the data. And YOU pay for that by being exposed and phished. Ledger sacrifices YOU for a few Euros.

Edit 2:

BTW, if any representative of Ledger, Trezor or ColdCard wants to correct anything I said here, please DM me. I'll gladly correct the post and apologize for errors.

I would very much appreciate clear and certain language around who retains what data for how long, in which way and why.

Edit:

If you already bought from Ledger, demand erasure of your personal data immediately. Here is an example E-Mail:

Subject: Demand of erasure of personal data subject to Art. 17 GDPR.

Good day,

hereby I demand the immediate erasure of my personal data subject to Art. 17 GDPR.

Art. 17: (1) The data subject shall have the right to obtain from the controller the erasure of personal data concerning him or her without undue delay and the controller shall have the obligation to erase personal data without undue delay where one of the following grounds applies:

Complete text of the law: https://gdpr-info.eu/art-17-gdpr/

Please inform me of the erasure as soon as it is done.

Kind regards, Your Name.

submitted by /u/Thanatos_1
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Billionaire Investor Ray Dalio Turning Bullish On Bitcoin

Posted: 09 Dec 2020 02:35 AM PST

submitted by /u/vinnie_chapman
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Remember to Zoom Out

Posted: 09 Dec 2020 12:32 AM PST

submitted by /u/emperor-penguin-
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Fantastic mural in Wan Chai, Hong Kong

Posted: 08 Dec 2020 11:42 PM PST

submitted by /u/TheCryptomath
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The Tipping Point With Bitcoin

Posted: 09 Dec 2020 12:35 AM PST

I've started investing in Bitcoin 3 years ago, and my thinking up until recently, has been that I'm investing in something I believe in, in order to maximize my dollar position.

After going through the deep end, I've realized that I'm playing the wrong game entirely. The goal is not to maximize my dollar position. The goal is to maximize the amount of Bitcoin I have.

Conversely, waiting for BTC to drop in the hopes that I get a better deal for my fiat, is like playing roulette and going all black. It's super high stakes gambling, and I don't like gambling.

The only rational move in this situation is to transition completely out of fiat, into a BTC only position.

Don't take it from me. Take it from our new leader, Michael Saylor.

https://www.youtube.com/watch?v=9AgA8Yw_uZE

To the moon my brothers and sisters.

submitted by /u/dogefellowship
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A financial system bailed out

Posted: 09 Dec 2020 12:18 AM PST

Fractional reserve banking is not exactly how the banking system operates right now, to understand how the banking system works, it would be interesting to analyze the baking structure through a credit lending process and unwrap step by step all financial engineering build on the background.

To make it as simple as possible, let's simulate the process of an individual taking out a mortgage to buy a house, since the currency is borrowed from a commercial bank (buyer) to the transaction of the currency to another bank (seller), the seller's deposit account. Every step visualized in both balance sheets of the commercial banks.

At first the loan is created when the customer borrows currency, the balance sheet of the buyer bank looks like this:

https://preview.redd.it/v64u5nrbe4461.png?width=463&format=png&auto=webp&s=a54107296c2ecfec9f61259e6ae8f728d0385a28

In the asset side of the commercial bank appears the loan, in the liability side, the borrower's account is credited with a new deposit. At this moment money is created out of nothing with the loan matching the other side of the balance sheet. Bank deposits are simply a record of how much the bank itself owes its customers. So, they are a liability of the bank, not an asset that could be lent out. Realize that the bank's business model relies on receiving a higher interest rate on the loans (or other assets) than the rate it pays out on its deposits. It is important to mention that the repayment of this loan exempting the interest, destroys the same amount.

Proceeding with the house purchase, this is how the transaction between banks look like when the house buyer and the seller settle the transaction:

https://preview.redd.it/1kfe1kgde4461.png?width=1088&format=png&auto=webp&s=bd5583695fb03a1120eac719df84a430a3c7807c

As seen in the figure, deposits are transferred to the seller's bank along with reserves, which the buyer's bank uses to settle the transaction. Unfortunately for the buyer bank settling all transactions in this way would be unsustainable, the buyers bank could run out of reserve to meet possible outflows or reserve requirements which fixes a Deposit/Reserve ratio limiting potential loan demand.

Under this scenario, a withdrawal or a potential loan lent, could place the buyer's bank under the minimum reserve requirement. Being a commercial bank in this position, it is necessary to borrow liquidity in the repo market. Also, banks with excess reserves are in the opposite situation, lending liquidity in the repo market in exchange of earnings.

The Repo market is an over the counter (OTC) market where financial products are traded between two parties in exchange of cash, generally treasuries as are the pristine collateral with low risk. This is how the exchange looks like between two entities:

https://preview.redd.it/5cib1fyee4461.png?width=1287&format=png&auto=webp&s=198da019490f6352513da5e525e4626c58488543

Institutional investors lend cash in exchange of collateral typically T-Bonds as we mentioned, after a short maturity generally a few days the bank buys-back the treasury at a slightly higher price, earning the counterpart a little profit.

To keep in context with the FED policies, central bank uses net transactions data reported by commercial banks for a particular computation period (few weeks) to calculate reserve requirements applying the reserve ratios. If the commercial bank reserve is less than the reserve requirement, it must borrow from the discount window. That means borrowing directly from the central bank which lends at an interest rate usually 1% higher than the repo market rate. Basically, it is much cheaper to borrow from the repo market than directly from the central bank.

On September 2019 a disruption in the repo market led to a sharp spike in short-term interest rates, shown in the chart below:

https://preview.redd.it/42inz20ge4461.png?width=1168&format=png&auto=webp&s=4752e353263d3f95ce376d28f0dde9f3d03ff2ce

As we described before, trying to find liquidity to cover lack of reserves, commercial banks found out this scenario. Institutions refused to lend for treasuries and asked a higher rate, as a consequence, the rise in liquidity demand made the repo rate to sky-rocket forcing the central bank to step in.

Realize that liquidity problems were already hitting the economy even before the COVID crises. This reveal how commercial banks are in the edge of insolvency as they need liquidity to keep issuing loans that make them earn with some interest and keep the business afloat.

However, like in 2008, the FED intervened with Quantitative easing (QE) program. This monetary policy tool is not necessarily inflationary as the general public believe. In this situation is generally used to recapitalize the banking sector. Let's draw how a commercial bank balance sheet looks like after a central bank QE purchase:

https://preview.redd.it/pftqv6qhe4461.png?width=744&format=png&auto=webp&s=34eadbfc66b50719f98f17749405315acef17678

Notice that central bank liabilities are the same reserves as the commercial bank's assets during all the process, reserves are under the central bank umbrella. At first, the bank is under the minimum reserve requirement and owns all kinds of assets (T, MBS…). In this case a treasury, and the FED is directly purchasing it, adding the asset in its balance sheet and creating reserves out of nowhere in its liabilities side which mirrors the commercial bank's assets. As we mentioned before this is not directly inflationary but provides the commercial bank with new reserves extending the loan facility to a new level, QE basically greases the printing machine.

Additionally, QE is used to manipulate interest rates. The chart below shows how interest rates are adjusted according to the increase or decrease of bank reserves. When reserves grow, interest rates decrease. And when reserves decrease interest rates rise.

https://preview.redd.it/pglzxc0le4461.png?width=930&format=png&auto=webp&s=b761653066f05c6835f58946a004524716aaf2cf

So, QE is also implemented to keep interest rates low to incentive corporations to borrow. As interest rates goes to 0% demand for credit grows.

The following chart shows how interest rates are kept artificially low as the big debt cycle is broken since 2008.

https://preview.redd.it/5gpwtfbme4461.png?width=1168&format=png&auto=webp&s=c917d697c6b44cfe0f81a2c4b579dd65220d5d7d

submitted by /u/oriok92
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If your details were leaked by Ledger, you should demand a refund.

Posted: 09 Dec 2020 12:56 AM PST

IMO this is completely unacceptable. Even if the phishing attempts seem obvious to you, stop supporting this incapable company who's entire business model is security that they have failed to provide.

submitted by /u/schnellzer
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5 years ago bitcoin was too expensive

Posted: 08 Dec 2020 02:29 PM PST

submitted by /u/goodbtc
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Posted: 09 Dec 2020 05:08 AM PST

As the thread titles states, looking forward to a healthy discussion.

Not to mention staking and lending options that actually give passive returns and instead of "hodl" you let your money work and earn you passive returns.

I'm not talking about shitcoins and won't mention which ones I'm talking about because I'm not here to shill anything.

Edit: Food for thought, using a hardware wallet doesn't give you the keys. It's also software and hardware managed by a third company. Like someone said in the comments, it's starting to look obvious to me this NKYNYC is a marketing stunt to sell hardware wallets. This is not 2013 where you trust a Fatboy in his moms basement to safekeeping your millions in space money but multi billion dollar companies that probably use x7 advanced multi sig cold storage wallets.

chewing popcorn

submitted by /u/ElliotMeijer
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Interesting Fact: Bitcoin's market capitalization is roughly 1/4 that of silver

Posted: 08 Dec 2020 10:47 AM PST

submitted by /u/pandoira
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Venezuela Traded in Bitcoin with Turkey and Iran, Passes New Anti-Blockage Law

Posted: 09 Dec 2020 03:46 AM PST

submitted by /u/n0mi1
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Coinbase asking too much personnal data, any good alternative?

Posted: 09 Dec 2020 03:41 AM PST

Hi there,

I bought for the first time about 1.5 years ago because like most of us here, I like the idea of a decentralized currency very much. Since then I haven't been able to buy more but I would like to start buying regularly again, even if I don't buy much at a time.

I've used coinbase so far but since I am a lot concerned with my privacy too, I am much annoyed by the fact that they require my ID, and I had to make a transfer to their bank in estonia just to be able to buy more BTC (otherwise my identity isn't proven according to them...).

I could deal with it but now they are asking me how much I plan to trade per year, and what is my field of industry. According to Coinbase it's required by my gov. and if I don't provide the info, I'll be blocked from trading on January 8th... To me, this is not at all compatible with the idea I have of BTC "philosophy".

So I'm planning on using TOR for any BTC related matter from now on, and I'm looking for an honest alternative that allows me to buy bitcoin and transfer it to my wallet without having to lay down my personal data.

Do you have any advice for me?

Cheers

submitted by /u/gainzit
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French Government Surprises Companies and Citizens With Proposal Of STRICT New Requirements For Crypto Traders...

Posted: 09 Dec 2020 02:28 AM PST