U.S. Secret Service Launches Cryptocurrency Awareness Hub

I recently sent a low-fee, nearly instantaneous payment over the lightning network with exactly zero trusted intermediaries. LN may or may not be ready for wider-scale adoption, but it was incredibly cool. It gave me that same feeling of power and possibilities as when I first learned to program a computer. I'm not sure if I can convince you but there is actually some there there.

If, as I predict, volatility goes down as the network grows and bitcoin becomes used for more things, so does average return. In other words, the "deflation" rate reaches some small but steady level. The days of number go up will be over, bitcoin would be something boring that goes up only slowly over decades. Like the foreign exchange of a virtual country, its market price vs other currencies would be determined more by balance of trade than by currency speculation.

Of course, that future is far from certain. Buying bitcoin now is like buying an option that pays out if that future comes to pass. The price of an option is very volatile, but it is never zero until it expires. Bitcoin might wax or wane in popularity, but it will never expire.

This is all that the words "speculative asset" entail: they are risks that work out in some possible futures and don't in others. So it doesn't bother me that some people bought bitcoin and $10 and are now sitting on a nice stack. That bitcoin could have easily gone to 0.01 today. They took that risk. Why shouldn't they reap that reward? Without those early market participants in bitcoin, wouldn't be even more highly concentrated? My advice to such whales would be to spend their bitcoin on business investments that help spread the coins and bootstrap the network. Bitcoin-related businesses that pay employees in bitcoin. There are still bold people out there who want to live in an alternate future and try to make it real.

Of course, I don't think everyone should get into speculation... It's got a pretty high attrition rate even among the professionals. But you know, oddly enough, it's when inflation rates are higher that the more people are forced to be speculators just to stay in place.

Being on the cutting edge means that most of the time, what you are doing just doesn't work.

I've been listening to old timers tell stories about working at MOS technology back in the 70s. MOS was rather vertically integrated, with chip design and fabrication feeding all the way to consumer products. So chip designers dealt with buggy manufacturing processes, board engineers got buggy new chips hot off the wafer, and software guys got buggy dev boards. A lot of time was spent trying to go back and fix bugs at the lower layers, sometimes all the way down to manufacturing defects. It might sound crazy today, but for a time they could do things that very few other companies could.

"It's slow", "it's buggy", "it's inefficient"... all of these are ways of saying "I can't, I won't". Expressions of fatigue. They don't lead anywhere.

"I'll make it fast," "I'll make it work," "I'll make it efficient"... all are expressions of will. This is the attitude that the builds the future.

Most people don't save for retirement by storing stacks of cash.

Sure, this is the defence. Some basic questions that would be asked in any (ordinary) policy proposal conversation:

* What are the major problems with existing currency systems?

* Which of these specific problems does crypto solve?

* What problems does crypto create? Are these less serious than the existing ones?

* How well/reliably does crypto solve them?

* Who are the stakeholders that will determine crypto adoption?

* Which of these stakeholders would switch to crypto, and why?

* Why wouldn't they?

* If crypto sees no widespread adoption, is there any market value to it as an asset? What would this value be? Why?

Let me remind you: crypto is backed by a highly centralised companies largely controlled by early adopters who hold the vast amount of the crypto value within the system; their relative control can only increase overtime as the asset is deflationary. The entire economy is determined by the immutable blockchain, unless its forked to preserve the interests of those with massive holdings. The immutability of the blockchain makes fraud irreversible, unless the chain is forked -- so fraud is only reversible against high stakeholders. The chain is incredibly operationally expensive to run, centralising service control to a few companies, and incredibly slow. The whole economy is public, so once your identitity is known, you're entire economic life is visibile to everyone -- making blackmail, fraud, and "ruthless and abtiary credit checks" easy.

We know what a society based on a deflationary stake captured-early is like: its called feudalism.

Crypto is an anti-democractic economically illiterate project to create a feudal society in which power is proportional to holdings; and redress requires convincing the powerful to "fork the economy".

If it had any chance of success at all, it would be necessary immediately to organize a massive political project to ensure it was stopped. The reality is its just a group of fanatics engaged in a get-rich-quick scheme thinking that in the future where they are rich, they'll have the power (by design of the system)!

Thankfully it's genuinely silly and ineffective, and the only thing crypto has ever done is be sold to the next fool along. No one really needs to worry, within the decade crypto will have collapsed. I'd say 5 years, but of course, bernie madeoff ran his greater-fool scheme for 30.

The difference (systemic vs non-systemic) is not just about magnitude, but also in who Lehman's counterparties were and the effects when those counterparties (those who were exposed to Lehman) could not get their expected capital (and the chain reaction of events that sets off throughout the capital markets and then the real economy). I remember reading some stat that claimed Lehman had derivative contracts with total notional value in the 10s of trillions.