Operation Saylor - Episode 5/120
Hi again and welcome to another episode of the Operation Saylor. This is update number 5, corresponding to November 2022.
If you are reading this for first time, you might want to check Episode 1, where my plan and details are explained. That will get you in context.
Stats
- BTC stack: 1.1628 BTC
- € stack: 6,535.20 €
- Current total value in €: 25,140.00 €
- € into BTC: 25,000 €
- Paid back to bank: 1,464.80 €
- Outstanding debt: 42,479.53 €
- Installments to go: 116
Charts
Log
During last month I came across a couple of reads and a new company that brought me to think I'm not as crazy as I look like.
The first read was a section of the Fiat Standard, where Saifedean discusses possible scenarios on how a transition from a fiat world to a hyperbitcoinized one could look like. In it, he discusses that there are both forces that push for a smooth transition as well as for an abrupt one. As part of his analysis, he presents the following as one that pushes for a sharp adoption:
A counter-point to consider to the preceding two sections' analysis is the impact of the strategy of borrowing dollars to buy bitcoin. While many people would be tempted to exit fiat debt entirely and shift to holding hard bitcoin savings, the continued existence and wide availability of fiat debt will offer a strong incentive to borrow fiat and use it to accumulate bitcoin. One of the smartest and most far-seeing analysts of bitcoin, Pierre Rochard, had identified this phenomenon as early as 2013, outlining how bitcoin allows investors worldwide to carry out a speculative attack on all national currencies similar to what George Soros and beneficiaries of low interest rate lending have been doing to weak national currencies for decades, with spectacular success. The speculative attack strategy is to borrow the weak currency, and use the proceeds to buy the stronger currency. As the borrowing of the weak currency causes an increase in its supply, selling it to buy the strong currency causes a decrease in demand for it, and results in the decline of its value next to the stronger currency. This reduces the value of the loan the attacker owes, and increases the value of the currency he holds, a highly lucrative combination. With bitcoin a harder currency than all national currencies, it could serve as the perfect launchpad for attacks against national currencies. It is a natural evolution of the interaction between the two forms of money: hard bitcoin is optimized for appreciating as it is held, while fiat is optimized for devaluing as it is inflated and lent. The likelihood of speculative attacks casts doubt on the monetary upgrade scenario discussed above. How long can fiat survive if people can keep inflating its supply by borrowing it to buy harder bitcoin? We have never seen a similar situation and it is hard to estimate how this will unfold.
So apparently, I have started an speculative attack on the euro without even noticing. Shit happens.
After reading that, I pulled the string to the original piece by Pierre Rochard, which I highly recommend you go and read now. It's concise and extremely insightful.
The part that gets me most excited and simultaneously scared is the idea, proposed both by Saifedean and Pierre, that the inevitability of the speculative attack makes Bitcoin adoption an accelerating phenomenon, and not a slowly fading one as many people picture. Not a logarithmic curve, kind of like the chart of BTC in circulation by year, but rather an S curve, where the fastest middle part might break a few necks.
Lastly, I recently learned about this soon-to-launch company called Faucet21. Their proposal? Giving away personal loans like the one I got with the sole purpose of buying Bitcoin. As they put it, "Distributed, Retail Level speculative attack". They even have a nice calculator you can use to simulate the expected return of this strategy. You can go and play with my loan's numbers, for example.
When I started planning and executing Operation Saylor, I knew I was not the only one having this idea. But now, I must say I'm surprised at how old the idea is and how common it could eventually become. Because, from a game theory lens, every person that jumps on the loan-for-BTC boat is hurting the fiat and strengthening Bitcoin. If enough people do it... It reminds of the old quote from Satoshi: “It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.”
Well, I hope some of you don't think I'm that crazy after today's read, and perhaps some might even be thinking about joining the club. I'll see you again next month.