Turkish Exhange called Thodex scammed 2 mrd dollars

[virtusa]

The more that crypto is used as payment, the more it is at risk of shutdown.

Question: what would you do if you are in a war and afraid to lose that war?

Answer: you would attack your enemy from start and try to eliminate him as quickly as possible.

Translated to crypto: if governments would really be afraid that crypto's would threaten or take over their financial system, they would already have acted to stop that. The fact that governments don't do anything might indicate that governments have already a very effective weapon to destroy crypto's. Strategically the best thing they can do is wait till a lot of people are in crypto's and then hit them hard. That would probably take away the appetite of millions of crypto holders to ever start with crypto's again. That would solve the problem forever. Reacting too quick would not generate enough big losses, so crypto's would come back.
Bitcoin would then become a highly speculative investment asset, a high risk and a very low reward, or even a total loss (depending on how quick you can get out in a crash).

 

[NoahA]

I don't think of bitcoin as replacing a fiat and neither does Tesla, or Microstrategy or NYDIG or Square

Bitcoin as a form of payment for goods & services is not the only functionality

The above mentioned are using it as an investment asset to hedge inflation

I think of bitcoin as a highly speculative investment asset, a high risk and a high reward

If you keep focusing on the fiat narrative, you will not understand why 1 bitcoin is worth over $50K

But here is the thing. Its only useful when you talk about BTC in terms of how much fiat it gets you. Do you think we will ever get to the point where its common place to say "Buy this house with 10 BTC, or buy this Tesla with 1 BTC"? Absolutely not.

It only sounds attractive against fiat, but ironically, fiat is what will always be necessary to give it value. But I'm happy to concede that it will keep going up until the FED comes out with their own crypto, and then I think all hell will break lose for BTC and ETH.

 

[NoahA]

Question: what would you do if you are in a war and afraid to lose that war?

Answer: you would attack your enemy from start and try to eliminate him as quickly as possible.

Translated to crypto: if governments would really be afraid that crypto's would threaten or take over their financial system, they would already have acted to stop that. The fact that governments don't do anything might indicate that governments have already a very effective weapon to destroy crypto's. Strategically the best thing they can do is wait till a lot of people are in crypto's and then hit them hard. That would probably take away the appetite of millions of crypto holders to ever start with crypto's again. That would solve the problem forever. Reacting too quick would not generate enough big losses, so crypto's would come back.

I don't exactly agree. I don't think they want to rock the boat too much. There is too much wealth now in crypto. They don't want to eliminate all this on a whim because it might create more trouble for them. Look at this virus issue. Shutting down all the jobs not meant the government had to replace all this currency.

So I think the value of crypto just got too far ahead of themselves and they weren't ready for it. So now its going to be about providing a smooth landing, rather than full blown crash.

 

[johnarb]

But here is the thing. Its only useful when you talk about BTC in terms of how much fiat it gets you. Do you think we will ever get to the point where its common place to say "Buy this house with 10 BTC, or buy this Tesla with 1 BTC"? Absolutely not.

It only sounds attractive against fiat, but ironically, fiat is what will always be necessary to give it value. But I'm happy to concede that it will keep going up until the FED comes out with their own crypto, and then I think all hell will break lose for BTC and ETH.

You're still focusing on a way to spend bitcoin in the future and Michael Saylor (MSTR) has already said he plans to never sell any of the bitcoins they hold in treasury. MSTR owns over $4.5 billion worth of bitcoin and MSTR is still buying as of a week or so ago, basically spending company free cash flow to purchase more bitcoins

So how is MSTR going to use the bitcoin to "cash out"? You can watch the youtube videos, he will use the bitcoin as collateral to borrow fiat for capex and other business expenses

He can put $200M worth of bitcoin as collateral asset to borrow $20M at near 0 interest rate

Think of a rich guy worth a couple of $100M and he owns a Monet, he cannot use it to buy a house for his mistress. It's a store of value for him, to hedge the inflation

This same rich guy may own $10M worth of Amazon stock, he can call his broker and borrow $1M to buy the house but now he can also call Fidelity to borrow against his bitcoin holding

The method of payment does not make sense for bitcoin, you cannot buy groceries or furniture using bitcoin right now as the bitcoin transaction fees are high, just sell the bitcoin in the future to spend the profits or borrow against it

Forget buying coffee unless you want to use L2 solutions (i.e Visa or PayPal or Venmo or Square)

 

[NoahA]

You're still focusing on a way to spend bitcoin in the future and Michael Saylor (MSTR) has already said he plans to never sell any of the bitcoins they hold in treasury. MSTR owns over $4.5 billion worth of bitcoin and MSTR is still buying as of a week or so ago, basically spending company free cash flow to purchase more bitcoins

So how is MSTR going to use the bitcoin to "cash out"? You can watch the youtube videos, he will use the bitcoin as collateral to borrow fiat for capex and other business expenses

He can put $200M worth of bitcoin as collateral asset to borrow $20M at near 0 interest rate

Think of a rich guy worth a couple of $100M and he owns a Monet, he cannot use it to buy a house for his mistress. It's a store of value for him, to hedge the inflation

This same rich guy may own $10M worth of Amazon stock, he can call his broker and borrow $1M to buy the house but now he can also call Fidelity to borrow against his bitcoin holding

Is this like taking out a line of credit against the equity in your house? And then your house drops in price, and your line of credit is immediately called back?

So all of this is contingent on the value of BTC staying high relative to fiat.

This just came to my mind. Now I don't know about the mechanics of this, but look at the huge drop BTC and ETH had just recently, all because the hash rate went down 50% for some routine maintenance. There are of course competing reasons for this, but this one seems very probable. This means that the all might BTC is reliant on a bunch of computers in one city in China? For such a decentralized currency, how is it so prone to a mini plunge? Even if the power goes out at my bank, I don't lose what I have stored there. My gold bars also do quite well to hold their value when the lights go out.

Seriously though, for a market to react like it did just because the machines were turned off for a while is quite worrisome. 1 trillion in value all contingent on a bunch of video cards in one Chinese city performing useless calculations. Aye....

 

[d08]

You're still focusing on a way to spend bitcoin in the future and Michael Saylor (MSTR) has already said he plans to never sell any of the bitcoins they hold in treasury. MSTR owns over $4.5 billion worth of bitcoin and MSTR is still buying as of a week or so ago, basically spending company free cash flow to purchase more bitcoins

So how is MSTR going to use the bitcoin to "cash out"? You can watch the youtube videos, he will use the bitcoin as collateral to borrow fiat for capex and other business expenses

Everyone plans to HODL forever when the conditions are favorable near ATH but that means absolutely nothing. When the conditions become difficult, he will sell and not talk about it. You'll know it after he has completely cashed out.

 

[johnarb]

Is this like taking out a line of credit against the equity in your house? And then your house drops in price, and your line of credit is immediately called back?

So all of this is contingent on the value of BTC staying high relative to fiat.

This just came to my mind. Now I don't know about the mechanics of this, but look at the huge drop BTC and ETH had just recently, all because the hash rate went down 50% for some routine maintenance. There are of course competing reasons for this, but this one seems very probable. This means that the all might BTC is reliant on a bunch of computers in one city in China? For such a decentralized currency, how is it so prone to a mini plunge? Even if the power goes out at my bank, I don't lose what I have stored there. My gold bars also do quite well to hold their value when the lights go out.

Seriously though, for a market to react like it did just because the machines were turned off for a while is quite worrisome. 1 trillion in value all contingent on a bunch of video cards in one Chinese city performing useless calculations. Aye....

Yes on the first part, if bitcoin value goes down, need to put more bitcoin as collateral

The mining is only an issue short term

Bitcoin mining difficulty adjusts every ~12 days

If all of China stopped mining right this instant, the hash rate will drop, transaction fees will shoot up, that may cause blocks to be solved at longer intervals than 10 minutes, until the difficulty adjusts which depending on where the cycle is, could be a few hours or over a week

And you can pretty much bet a bunch of miners are going to be in a hurry to fire up as much miners as quickly as possible, even old bitcoin mining hardware will be profitable with a lower hash rate and lower difficulty

China stopping their mining will be an awesome news. I would even start mining again

 

[johnarb]

Everyone plans to HODL forever when the conditions are favorable near ATH but that means absolutely nothing. When the conditions become difficult, he will sell and not talk about it. You'll know it after he has completely cashed out.

Do you know about SEC rules for disclosing material information for publicly traded companies such as MSTR and TSLA? Google it

 

[NoahA]

Yes on the first part, if bitcoin value goes down, need to put more bitcoin as collateral

The mining is only an issue short term

Bitcoin mining difficulty adjusts every ~12 days

If all of China stopped mining right this instant, the hash rate will drop, transaction fees will shoot up, that may cause blocks to be solved at longer intervals than 10 minutes, until the difficulty adjusts which depending on where the cycle is, could be a few hours or over a week

And you can pretty much bet a bunch of miners are going to be in a hurry to fire up as much miners as quickly as possible, even old bitcoin mining hardware will be profitable with a lower hash rate and lower difficulty

China stopping their mining will be an awesome news. I would even start mining again

Good answer. But the shock this caused was astounding in my opinion. Over 10% of the value wiped out, and BTC has still not recovered yet. And I'm sure you will argue that there are more hodlers than ever, but if they ever sniff a piece of news that makes them want to sell, I really do wonder where the price will end up. Heck, people might not even be able to rush for the exits if the infrastructure will not be able to support it.

Tell me if this is possible. Some piece of news hits that makes people start selling BTC. Its ok if its just a bit, the exchanges can absorb this. But all of a sudden you have BTC in cold storage being moved to exchanges. Now these guys want to sell. And during all this, you have exchanges that need to sell as well because many of their customers are selling. So you have exchanges competing with customers all trying to sell. Could be ugly.

 

[johnarb]

Good answer. But the shock this caused was astounding in my opinion. Over 10% of the value wiped out, and BTC has still not recovered yet. And I'm sure you will argue that there are more hodlers than ever, but if they ever sniff a piece of news that makes them want to sell, I really do wonder where the price will end up. Heck, people might not even be able to rush for the exits if the infrastructure will not be able to support it.

Tell me if this is possible. Some piece of news hits that makes people start selling BTC. Its ok if its just a bit, the exchanges can absorb this. But all of a sudden you have BTC in cold storage being moved to exchanges. Now these guys want to sell. And during all this, you have exchanges that need to sell as well because many of their customers are selling. So you have exchanges competing with customers all trying to sell. Could be ugly.

I cannot answer hypotheticals, but on the recent downturn, you're saying it was due to the decrease in hash rate, when I'm hearing it was due to high futures funding rates and liquidated leveraged longs but not my area so whatevers