Billionaire Boys Club

coinspeak October 29, 2020 Leave a comment 421 Views

If you had 1 billion dollars how much due diligence would you do before opening 8 or 9 figure positions?

I’m curious because some of the largest investments I see in BTC defy logic. Sure, if you’re a crypto kid in your mom’s basement YOLO’ing BTC is fine, but if you have 9 figures in a public company’s treasury I think *some* caution would be in order.

The quickest way to become a millionaire is to start with a billion dollars and invest in BTC.

Let’s start  our examples with quotes by Michael Saylor and Raoul Pal.

That’s $175M in personal money put into BTC. But this investment is based on what?

Ah, the classic “Few understand this” ending to a crypto tweet. Very sage. This guy must really know what he’s doing and is definitely not succumbing to meme cults!

But wait, let’s do a few minutes of due diligence on this “monetary energy on a software network”. Let’s start by taking a look at BTC and it’s 1MB blocksize capping throughput at 7 transactions per second.

At 7 transactions per second the maximum number of transactions per year is: 220,752,000

7 x 60 x 60 x 24 x 365 = 220,752,000

Between his personal and business holding Saylor has ~$600M invested in BTC. So, Saylor has nearly $3 invested for every transaction that could possibly be transacted on BTC operating at maximum capacity in an entire year! If 1 billion people wanted to make one BTC transaction it would take almost FIVE years. I guess he must really understand network effects! Maybe I am not included in the “few understand this” group, but I’m trying!

But wait, seems the BTC network fees are rising again. I’m sure that’s fine and not a problem for a world currency.

Contrast 7 transactions per second BTC with BSV’s unlimited scale. Two different models, two very different futures.

Despite my being confused by Saylor’s love of BTC I like Saylor’s style. He’s all in on BTC between 9800 and 11,100 with a big stack and is a relentless shill. I don’t think his investment will last long but I give him style points aplenty.

Let’s see what Raoul Pal at RealVision has to say:

Hmm, he sounds moderately bullish. /s

I like Raoul. He’s a smart guy and I agree with most of what he says about Bitcoin, except that he thinks BTC is Bitcoin. Has he not done his homework? He’s a Macro guy, shouldn’t he have a full picture before diving in and advising his clients to be committed to BTC?

Maybe some due diligence into this area and how to reconcile the problem with mass adoption would be in order before dropping your entire portfolio into BTC?

Bitcoin was designed with a very specific economic model. Mess with Bitcoin, as BTC had done, and that model breaks. If these money guys don’t get the technical aspects I’d assume they’d at least understand the economics.

But let’s give these Billionaires some more time to get the big picture. They are early. They’re completely wrong, but early, so they’ll be fine. Bitcoin is a complicated subject. It draws on many areas of expertise. I had the technical background to get the gist of Bitcoin from the start and I spent over a year in 2012 ridiculing Bitcoiners before I saw the bigger picture. There is a steep and never ending learning curve to Bitcoin and IMHO Saylor and Raoul have a lot to learn.

I am a contrarian on BTC. I’ve been unabashed about this for 2 years. It’s not easy being the contrarian when I wake up and BTC has gone up the entire market cap of BSV, times two, overnight. But there’s nothing about BTC that makes sense as a dominant world currency. It’s crippled.

As a comparison, from my view most of the world is holding NKLA while I’m sitting on a bag of TSLA.

Let’s turn to Mike Novogratz:

Is that so? BTC just implemented Schnorr signatures and Taproot to increase “privacy” and scaling. But in reality this adds more technical debt to BTC and takes it further away from the genius design of the original Whitepaper. The BTC devs took a once in a lifetime invention and turned it into a Frankenstein so they could force your transactions through their second layer transports (for a small fee of course).

There is mounting legislation addressing privacy and money transfer. Just about any “privacy” feature runs afoul of these regulations. How does a money guy like Novogratz not know this? It beats me.

Satoshi saw all of these pitfalls and designed Bitcoin to be publicly traceable, pseudonymous, honest money.

But I digress.

Let’s address the popular Store of Value argument:

Oh boy, this is a good one. Let’s take all of the features and advantages of digital money and smart contracts and NEVER use them. Thinking BTC becomes more valuable because no one uses it is a special kind of logic. And guess what, BSV has the same scarcity features as BTC plus scalability/usability.

BTC may have a great bull run to finish the year but it’s not a long term solution. It doesn’t scale.

With these institutions and billionaires lining up behind BTC you’d think it’s game over for BSV, right? Probably.

But then again, maybe….

dubaisummit.org

https://twitter.com/GinoLeod/status/1320868296825028610?s=20

Oh, and one more thing…. Peter McCormack, who was sued for libel for calling Craig Wright a fraud, has declared intent to stop defending his case. What did his legal team see that had them drop their vigorous defense?

Craig Wright is Satoshi Nakamoto. I imagine this is CSW on his way to work this morning.

 

 

About coinspeak

20 years as an IT consultant. Escaped the rat race in 2015. Addicted to travel and tacos.

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