BitsMcBytes's recent activity

  1. Comment on Why crypto could be green power's unlikely new best friend in ~enviro

    BitsMcBytes
    Link

    One of the key aspects of the power grid is that it must supply exactly the amount of power demanded at any given time. When power grids were first established, they were designed with coal and big spinning turbines in mind. As a result, the mechanisms keeping the entire system stable relied on the same technology.

    But increasing integration of increasing levels of volatile renewables is impacting both the stability of the grid and how balancing services are provided. Today, there are three main solutions: peaker plants; demand response; and energy storage.

    The advantages of crypto mines in demand response revolves around their high degree of flexibility. Industrial plants can also reduce their power consumption, but not as easily because of the disruption to physical processes.

    2 votes
  2. Comment on Retirement warning highlights fight over finance’s hardest problem in ~finance

    BitsMcBytes
    Link Parent
    To my point above, the 90s had an all-time high peak of US labor force participation. That and the huge stock gains in the run-up to the dotcom bubble led to the US experiencing a rare fiscal...

    To my point above, the 90s had an all-time high peak of US labor force participation. That and the huge stock gains in the run-up to the dotcom bubble led to the US experiencing a rare fiscal surplus. It can be also be said Clinton’s tax hikes and austerity measures to trim expenses were a contributing factor among those events.

    Tax revenue as % of GDP is relatively unchanged (~19.5%) over last 90yrs even as top income tax rates have come down from >90%. Suggests we can’t tax ourselves out of US fiscal deficit and sovereign debt.

    US can tax more if it wants to temporarily rebalance TGA, but inflation and stocks are the only things keeping tax receipts above US interest expenses and Entitlements.

    If we really wanted to de-lever the US balance sheet… Treasury tells Fed to revalue gold at $20k/oz, that’s deposits $5T into TGA instantly. Treasury bids $5T in USTs at market prices, that drops debt/gdp from 120% to 70-80% overnight.

    1 vote
  3. Comment on Retirement warning highlights fight over finance’s hardest problem in ~finance

    BitsMcBytes
    Link
    An interesting observation is if you look at the of chart of US Labor Force Participation Rate and US Debt as % of GDP, they are inversely correlated, suggesting that as the population ages,...

    An interesting observation is if you look at the of chart of US Labor Force Participation Rate and US Debt as % of GDP, they are inversely correlated, suggesting that as the population ages, Debt/GDP goes up.

    But also, the of chart of US Labor Force Participation Rate and US Fed Balance Sheet is inversely correlated as well, so as the population ages out, the balance sheet increases.

    So a bit cyclically, as the population gets older and the labor force participation rate goes down, monetary and high street inflationary pressures go up. More entitlements need to be structured to ensure retirees have livable income. But those same inflationary pressures also make it so the purchasing power of that income goes down, so those entitlements need to increase to compensate.

    6 votes
  4. Comment on Climate sustainability through a dynamic duo: Green hydrogen and crypto driving energy transition and decarbonization in ~enviro

    BitsMcBytes
    Link
    Recent peer reviewed study shows Bitcoin mining coupled with green hydrogen can enable wind farms to expand capacity by up to 73.2% and solar farms by 25.5%, accelerating the renewable transition.

    Recent peer reviewed study shows Bitcoin mining coupled with green hydrogen can enable wind farms to expand capacity by up to 73.2% and solar farms by 25.5%, accelerating the renewable transition.

    1 vote
  5. Comment on Memecoin trading at levels last seen before crypto bubble burst in ~finance

    BitsMcBytes
    Link Parent
    My theories: Bridging to an L2 is a UX nightmare L2s essentially keep all state under a multisig (sometimes upgradeable, sometimes with low thresholds!) Telegram bots like Bonkbot make trading...

    My theories:

    • Bridging to an L2 is a UX nightmare
    • L2s essentially keep all state under a multisig (sometimes upgradeable, sometimes with low thresholds!)
    • Telegram bots like Bonkbot make trading memecoins on Solana feel like a video game
    1 vote
  6. Comment on Memecoin trading at levels last seen before crypto bubble burst in ~finance

    BitsMcBytes
    Link
    A unique thing about this is that Coinbase doesn't offer the majority (any?) of these new memecoins, it's mostly happening on Solana. Which is interesting because Solana was originally described...

    A unique thing about this is that Coinbase doesn't offer the majority (any?) of these new memecoins, it's mostly happening on Solana.

    Which is interesting because Solana was originally described as "Blockchain at Nasdaq speed" highlighting the high throughput, low latency features of its design... a narrative for enterprise and institutions, not for retail traders playing games of internet culture and PvP gambling via memes. But the trading volume here is proving that Solana is the retail chain.

    11 votes
  7. Comment on The Treasury Standard: Causes and consequences in ~finance

    BitsMcBytes
    Link
    Hendrickson argues that the "Treasury Standard" represents the culmination of a historical evolution where states monopolized currency issuance to finance increasingly costly wars, tracing this...

    Hendrickson argues that the "Treasury Standard" represents the culmination of a historical evolution where states monopolized currency issuance to finance increasingly costly wars, tracing this development back to the Military Revolution of 1500-1800. This monopoly on money was crucial for emergency war financing, necessitating the suppression of competing currencies to safeguard this capability. To ensure the long-term viability of this system, states were compelled to commit to price stability to sustain demand for their currency.

    As the centuries progressed, innovations such as banking began to erode the state's capacity to finance wars through currency debasement. This led to the rise of central banks as a novel means of funding conflict, with the Bank of England introducing a pivotal tactic: halting the convertibility of paper money into gold during wars, while pledging to restore the conversion rate to pre-war levels afterwards. This strategy maintained stable currency demand and significantly expanded war financing capabilities. However, the failure of the interwar gold standard revealed the limitations of this method.

    The Bretton Woods system attempted to resolve these issues by linking the dollar and gold, but it could not withstand the fiscal demands of American foreign policy. As a result, the Treasury Standard emerged, positioning US debt as the central element of the system.

    Currently, a relentless global appetite for "safe and liquid" US assets facilitates the government's ability to fund military expenditures through debt expansion. The dominance of the dollar further empowers the United States to wield sanctions effectively. However, this system encourages the US to accumulate excessive debt to satisfy global reserve demands, rendering it increasingly precarious. Additionally, the overuse of sanctions might prompt nations with trade surpluses, potentially adversarial to the US, to reduce their reliance on USD assets.

    This fragility of the Treasury Standard, exacerbated by US fiscal and foreign policies, poses significant risks, particularly in light of its vulnerability to geopolitical shocks.

    1 vote
  8. Comment on Millennium trader scored $40 million windfall in Egypt FX plunge in ~finance

    BitsMcBytes
    Link
    Commentary on this from X:

    Commentary on this from X:

    As currencies devalue relative to each other, there are all sorts of arbitrage games that wealthy people and institutions can play to benefit from the debasement, as millions of people earn their salaries and store their liquid savings in that which is debased.

    Even the upper-middle class could play this by taking out housing debt in the local currency, thus shorting the money that people earn their salaries in and store their savings in.

    The working class has fewer options to do things like that, and face the brunt of the devaluation.

    2 votes
  9. Comment on Bitcoin tops $72,000 for the first time in ~finance

  10. Comment on Bitcoin tops $72,000 for the first time in ~finance

  11. Comment on Bitcoin tops $72,000 for the first time in ~finance

    BitsMcBytes
    Link Parent
    I mean even Fidelity is now recommending 1-3% crypto (their BTC ETF) in their portfolios: https://www.fidelity.ca/en/investments/solutions-portfolios/all-in-one/ Larry Fink (BlackRock CEO) is on...

    I mean even Fidelity is now recommending 1-3% crypto (their BTC ETF) in their portfolios:
    https://www.fidelity.ca/en/investments/solutions-portfolios/all-in-one/

    Larry Fink (BlackRock CEO) is on TV calling BTC digital gold:
    https://twitter.com/screentimes/status/1766483035711488083

    The institutional infra is being built out and marketed now that the ETFs are available. Traditional asset managers and fund managers that would have lost their job buying bitcoin over the last decade can now just buy shares of one of the BTC ETFs because its just stock like anything else in the portfolio, particularly moreso when those ETFs have options available to provide embedded leverage and risk hedging.

    4 votes
  12. Comment on Bitcoin tops $72,000 for the first time in ~finance

    BitsMcBytes
    Link Parent
    My guess for why Berkshire is sitting on $168B in cash is that they can clip 5% on a big chunk of that with little duration risk and use the yield to pay corporate expenses, while waiting for a...

    My guess for why Berkshire is sitting on $168B in cash is that they can clip 5% on a big chunk of that with little duration risk and use the yield to pay corporate expenses, while waiting for a possible market drawdown so they can gobble up assets at a lower price (I’m speculating.)

    1 vote
  13. Comment on Bitcoin tops $72,000 for the first time in ~finance

    BitsMcBytes
    Link Parent
    For me its in some ways yes but in some ways no (in terms of hoping its the business model.) This model itself is a money printer, and at a certain scale, these higher rates meant to tame...

    For me its in some ways yes but in some ways no (in terms of hoping its the business model.) This model itself is a money printer, and at a certain scale, these higher rates meant to tame inflation become paradoxically inflationary themselves. If big companies are parking billions of excess reserves in short-duration treasuries, thats a lot of risk-free cash being generated and given right to them. And its not just stablecoin issuance companies doing this, but banks like JPM (they had like one or two trillion parked in RRP I think?), Berkshire, etc...

  14. Comment on Bitcoin tops $72,000 for the first time in ~finance

    BitsMcBytes
    Link Parent
    That is Tethers business model. Take users USD, buy T-Bills and short duration treasuries, give users USDT. Circle and PayPal also do this for USDC and PyUSD.

    That is Tethers business model. Take users USD, buy T-Bills and short duration treasuries, give users USDT. Circle and PayPal also do this for USDC and PyUSD.

  15. Comment on Bitcoin tops $72,000 for the first time in ~finance

    BitsMcBytes
    Link Parent
    In certain lending/borrowing protocols, the lending rate is just a function of the utilization of how much is borrowed (with some caps on deposits and borrows to maintain a risk policy.) For...

    In certain lending/borrowing protocols, the lending rate is just a function of the utilization of how much is borrowed (with some caps on deposits and borrows to maintain a risk policy.)

    For example, USDC is being heavily borrowed on MarginFi right now, so the rate you're getting as a lender is around 17%. If borrowers start paying this back, the lenders get a lower rate. If more people start lending, the borrowers pay a lower rate.

    Staking of course is different and typically less dynamic than borrowing/lending, normally a staking rate is just whatever inflation issuance you'd collect for locking up your tokens for a duration (though liquid staking can significantly dial down the duration risk for most people.)