Curious to know what the SN users think about this question.
What’s riskier
A. Buying/holding US Treasuries for 10 years
B. Buying a hosted miner with Compass Mining
Select A or B and make your case. Best answers will be tipped 500 sats
Oooh that's a tough one, despite the 10 years guaranteed to debase in purchasing power terms, you still have the coupon payments and the possibility to trade it within that time if you know what you're doing.
While the miner carries risk too, there's the competitiveness of the device over 10 year period, which will probably become obsolete in terms of premium returns ever 5 years, then there's the risk of compass failing, or governments shutting them down
So to me, the miner is the riskier bet, but I would still go for it. If it's just holding though, for 10 years, versus the miner running for even 5, id' still go for the miner
My reasoning is that the bond payments are in cash, which i probably would now hold or try to reinvest, while the miner pays out in satoshis, even if the miner is canned earlier, I still have custody of the satoshis in a private key held wallet and the longer the miner can run, me taking that risk, the more sats I have.
So i'd opt to run it till its shut down in one way or another, if it makes the 10 years great, if not I still have the sats that I can now hold and still get purchasing power appreciation
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Great answer! If the government can fix its fiscal policy the debt can be covered by tax receipts thus protecting your principal. Hosting mining is super risky but it’s reasonable bet that BTC will be the collateral the world wants.
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Absolutely, I don't see any country offering a positive return holding their 10 year as a passive holder collecting your coupon payments.
A miner also you can sometimes reclaim some of your capex back, should you feel the risk is too you high, if you sell the miner
Will be interesting to see how those bitcoin-backed bonds from El Salvador would do long-term once the market matures.
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There is almost no risk with the 10y Treasury. You are guaranteed to earn less interest than inflation will devalue it. A guarantee to loose = no risk.
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The US government is insolvent. They use new debt to pay for old debt and the Fed is monetizing the debt. The government could go belly up and stop all payments especially if tax revenues decrease substantially and foreign investor lose confidence in US treasuries.
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50% A 50% B remind me in 10y
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B is far more risky. 10Y treasuries is as safe as it gets.
Mining is a relatively new industry, with new regulations and bans every few months. Compass mining have a lot of capital held up and liquidity must be extremely difficult to manage.
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Okay I'm looking at this in preservation of purchasing power equivalent.
Option A. Guaranteed to lose purchasing power over 10 years.
Option B. There's at least a chance of increasing your purchasing power with Compass.
Both options kinda suck. I'm going to say option A is riskier because it has guaranteed downside.
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Lol, I just wrote the same but said that guaranteed downside means zero risk. Depends on what the word "risk" means.
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Depends on what you mean by riskier. A is more bureaucratic, which allows you to at least make an educated decision with some protections. I think you would end up losing less money with option A.
With option B, I know some people who are paying for hosting who are still waiting to be hooked up. The drawdown on this option is higher because you're not guaranteed anything.
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Interesting question... I am also curious to hear people make their case. My gut says B is more risky, though I guess you get to keep your sats so maybe over time B gets less risky.
Experiment: I will match @BlokchainB with 100 sats for the best answers!
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I would rather choose B;
Because the average individual may require much knowledge and time and funds to use and maintain a/an hosted miner. And if the right market conditions occurs, especially during a bull-run year like in 2021, could cause one's small investment to 1x or 10x even, depending on the amount of invested at first.
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This question depends on the definition of Risk... Is a 100% assured loss a risk at all?
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Sure it is. Risk is the potential loss either total principal or through inflation. The goal here is to protect your purchasing power over time.
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I am shocked a lot of Bitcoiners are going with A even with the US government being insolvent. A bond can be deemed worthless with the strike of a pen
While a few sats mined that no one knows about in your custody that no one can take from you is the more risky option.
Sounds like fiat cuckery is still strong😆
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