mjr__ Mircea, do you think that Coinbase could be a large part of this rally? They are pretty new and supposedly doing a ton of volume... expanding the user base...
mjr__ Has to have some impact, I think it's a combination of them and the ton of news coming out about Bitcoins. I even think that it is possible that if they have halted sales due to demand, that they caused the dip. But purely speculative. I mean a million dollars a month is not crazy, but I think it would move the market.
mircea_popescu Maybe it's driven by people trying to get on MPEx.
mjr__ Lol, S.DICE is doing well for me right now. But mpoe is undervalued I think. I hold both. But I look forward to the end of the month report.
mircea_popescu Won't be long now.
mjr__ Yeah, can you believe that someone said to me on Reddit (of course you can) that exchange rate has nothing to do with returns. Ie. you either hold S.DICE or you hold Bitcoins. I'm like, you sell and buy S.DICE or S.MPOE using Bitcoins, it's a way to grow your Bitcoins, and the value of those Bitcoins changes, so your total return when measured in dollars is a function of both effects.
mircea_popescu Well, people think that S.DICE betting volumes are somehow related to Bitcoin price. This may or may not be true. If you look at the graphs there's no relation so far, but maybe because other factors drowned it out and will be more apparent in the future.
mjr__ True. But that does not change the fact that when measured in USD, your total return is still a function of price of Bitcoins and price of shares + dividends, same on any stock exchange when you are in a different country. If I buy Japanese stocks on Nikkei, I have to also account for Yen/USD exchange. Anyway, if I am expecting financial savvy on Reddit, I should get my head checked.
mircea_popescu This is true. On all counts lol
mjr__ "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." From the site of the hedge fund that Nassim Taleb works at. I just finished Antifragile, and I think it is a great book, I just wonder if he is aware of Bitcoins.
mircea_popescu He's prolly right.
mjr__ That was a quote from Ludwig von Mises.
mircea_popescu I think the Bitcoin gambit currently is to try and persuade some hedge fund people.
mjr__ That is what I am working on, because that will change everything. If you can bridge Wall St. and Bitcoins you can first of all get a rally up to $100 if capital starts pouring in and second of all gain legitimacy as they are behind it, since they have Washington in their pocket. My original plan was to get a public company with Bitcoins as assets, but I would have to do a reverse merger for that and buy a public company, so might be too hard. So now I am looking at a slower approach to start a hedge fund type deal. I already convinced the CEO of my company and he is meeting with some Forex guys and is going to see if they could offer a product using Bitcoins. At some point, people on Wall St will realize that instead of gold, Bitcoins are a much better opportunity against the dollar.
mircea_popescu They're realising.
mjr__ They are. At that point, there will be an influx of capital that has never been seen in Bitcoin.
mircea_popescu A bunch of MPEx traders are actually traders.
mjr__ I know.
mircea_popescu This has been going on for a while by now.
mjr__ I know that a lot of people in this field are in finance, but they do this on their own. Soon, it will be financial companies, and at that point, we will see a ton of demand all at once, in my opinion. Egypt, Argentina, Venezuela etc. Fiat currencies are failing hard and today I realized that our system is not tried and proven, it is very very new, we only adopted this in the US in 1971. So it is still an experiment, having money not backed by any asset. If someone could start an ETF that tracks Bitcoins, that would change everything, that is what I was trying to do, but it is hard. Getting it publicly available would cost like 50k, and that is just basically a setup fee.
mircea_popescu So why's that hard ?
mjr__ Well...you get no return on that 50k.
mircea_popescu All you need is someone start a general partnership with a few tens of mils from a dozen friends and it's done.
mjr__ Well yeah.
mircea_popescu Prolly happen this year, too.
mjr__ If I had a few tens of mills it would be done already. It's easy, you let people buy a Bitcoin backed ETF with their E*Trade accounts. They have a hedge against the dollar, inflation proof, and currently yielding great returns. Just a tiny fraction of the money on wall street could quadruple the "market cap" of Bitcoin.
mircea_popescu O no. This would not be open to the masses for a decade at least. You have to understand the "for people" attitude Internet dweebs immediately paint over Bitcoin is nothing of any consequence. They do it because that's all their experience allows. Otherwise, Bitcoin is strictly for the elite.
mjr__ Well yeah. But if you have a publicly traded stock anyone can buy it.
mircea_popescu But you don't.
mjr__ Yeah :( not yet.
mircea_popescu You get a closed partnership with a billion under management.
mjr__ That is a nice way to do it too.
mircea_popescu Why bother offer it to the public ? The incentives just aren't there.
mjr__ But I really want to offer it to the public.
mircea_popescu I guess you do, but that's neither here nor there.
mjr__ So that everyone, even old people who don't understand, can get exposure.
mircea_popescu Old people that don't understand shouldn't get exposure. Actually : they should *not* get exposure.
mjr__ Well... I don't want to see us recreate the current system, but just put ourselves in positions of power. I want to see everyone enjoy this new change, or at least have the option to.
mircea_popescu Dude. Somebody who doesn't understand does not and can not have a position of power. They'll just hurt themselves.
mjr__ Well not power, but I want to make it easier for them to get exposure to the Bitcoin economy without having to actually get involved. Similar to gold ETF.
mircea_popescu Why ? This is a bad idea. Getting involved is a guarantee they put the effort into understanding.
mjr__ Well, not if they just buy shares using investment account.
mircea_popescu If they can't be bothered to do that, there's no reason to suspect they won't hurt themselves.
mjr__ True, but I think the option should be there so that anyone can actually have a portfolio with publicly traded shares that touches the world of Bitcoins. So, whether it is a hedge fund or a public company or an etf I think something along those lines is coming.
mircea_popescu Anyone currently can. For 30 btc and a little gpg knowledge.
mjr__ :) gpg is also going to be huge.
mircea_popescu It literally takes the average knowledgeable person 1 hour to go from holding some fiat to holding some BTC stocks. Now, that they're not knowledgeable is ok, but should be fixed there, not at this other end.
mjr__ But also, I think it is so funny that someone tried to do the idea in reverse.
mircea_popescu What do you mean ?
mjr__ A hedge fund wanted to raise btc so they could convert it out of btc and put it into the stock market. They were on twitter called btchedgefund or something. So backwards, let me take your BTC and put it into dollars. It's funny though, my friend who I work with is so impressed with Nomura because they use pgpi. He was like that is the future, they really have their shit together.
mircea_popescu mjr__ Ya that's nonsense. Also often these are simply scams.
mjr__ What is?
mircea_popescu The backwards.
mjr__ Yeah for sure. One of the things that I take away from all that I've experienced in Bitcoins is that if you expect scams, you are safer than getting blindsided by "mortgage-back securities" or credit default swaps. The key is to know the risk and the downside.———
- New York Times copies Trilema after a year and a half, Nomura Securities copies MPEx after a year and a half... Trendsetting. It's a thing. [↩]