@jp
20831 stacked

Good insight - I suppose, it's more about what $1 can purchase when 1 sat = 1 dollar.

If the dollar inflates to the point in which anything less than a dollar (by today's standards - pennies, nickels, etc) has zero utility then the dollar becomes the base denomination and a 1:1 ratio would have no material impact on transaction capabilities

It would be interesting to see Bitcoin adoption in countries where 1 sat is equivalent to that countries "dollar" denomination (and whether or not this causes transaction issues in daily life).

I am not quite sure this economy exists (perhaps Venezuela might qualify).

Interesting question posed by @monrch

I hate technical analysis (1 sat = 1 sat), but if you look at weekly candles and RSI levels, the current market we are seeing is equivalent to when Bitcoin was 5k on March 2020 and when Bitcoin was $3k in December 2018

I would argue the opposite.

The current RRO market rate is 0.4% which means that banks are willing to lend out their money to the Fed at 0.4% - a lower interest rate than other assets (e.g mortgages, business/personal loans, etc.). If there were valuable assets to invest in, the Banks would be making loans out for the purchase of these assets (and not to the Fed)

Source: https://www.federalreserve.gov/newsevents/pressreleases/monetary20220316a1.htm#:~:text=The%20Board%20of%20Governors%20of,%2C%20effective%20March%2017%2C%202022.

Also, if you're interested in learning more about Finance/Economics (in a straight-forward way), I would highly recommend Investopedia.com. Google anything related to finance, (e.g Reverse Repos - https://www.investopedia.com/terms/r/reverserepurchaseagreement.asp) and they will provide very good content

RROs are the banks giving back money to the Fed because the banks have no other places in th economy to deploy/loan the funds out to.

The bank will give money back to the Fed, effectively reducing the money supply (temporarily)

Here is a basic summary of a RRO: https://www.youtube.com/watch?v=H_wwzyAGPZw

RRO are essentially banks giving money back to the Fed for a very short period in time (only a few hours - generally for overnight holding - these are called "overnight repos").

The thought is that RRO peak when the banks have zero use for the money (e.g the banks do not have any worthy borrowers to make additional loans to).

People have been looking at the RRO as a measure of excess liquidity in the market that even the banks don't want to hold onto cash. Others have argued that this is indicative of real negative interest rates taking place because the bank sees holding on excess liquidity as an expense to their business (although I am not sure that this has been proven)

here is a basic summary of the mechanics of a RRO: https://www.youtube.com/watch?v=H_wwzyAGPZw

To my knowledge, this is the first time RRO have sustained such a high level - I think a lot of economists are stumped on this.

Basic thought is that there is so much excess liquidity in the market that the banks cannot stuff money anywhere else in the economy that they feel comfortable with - highlighting just how over valued every asset in the market is.

As credit dries up, all the zombie companies will be exposed and employees will find themselves quickly unemployed :/

FWIW, I think you provided a great and fair response. Appreciate your viewpoint (which I happen to agree with).

Even if I didn't agree with it, your response opens up conversation & engagement within the community (which is what most of us are here for)

Agreed.

This article could have been better written and I also think the key points highlight in the article are fairly weak.

The subsidization of solar and wind have directed a lot of resources toward these boondoggles rather than making fossil fuels a lot more efficient and available

Subsidies have existed both for alternative energy and fossil fuels so to use this as an attack vector on wind/solar isn't really a valid opinion.

Our productivity increases when energy gets cheaper and more abundant

Doesn't alternative energy increase the overall energy supply - wouldn't this be an argument for additional energy sources (fossil fuel and alt energy)?

It’s no wonder the best and the brightest in developing countries immigrate. They’re multiple times more productive in developed countries because they have access to abundant energy!

This commentary is limited in scope and doesn't take into account a variety of factors. Germany, for example, had the second highest net migration vs the world (https://www.un.org/en/desa/international-migration-2020-highlights) but can barely break into the top 10 in energy producers in the world. If you look at the UK, it paints even a starker picture.

Generally speaking, I am always skeptical of central banks adopting Bitcoin - Fiat currencies are such an attractive option for CBs.

However, given that developing nations are realizing the painful and forever-losing position they're in when their currency is subject to the fiscal policies of global superpowers, Bitcoin starts to looks more attractive.

Interested to see where this leads. I doubt Bukele would have made this announcement if he didn't expect good news to follow.

Side note: Developing nations are adopting Bitcoin faster than any other cohort (https://www.lynalden.com/wp-content/uploads/digital-alchemy-crypto-adoption-index.png).

I think the overall posting confuses the point of "arbitrage" and "value-added enhancement".

"Arbitrage" would be taking one asset (e.g bitcoin) and transferring it from one market to another (without any modification to the bitcoin itself) to make some profit due to market inefficiency.

"Value-added Enhancement" is the work (e.g electricity, computational power) that is produced to create a sellable good (e.g bitcoin).

The author incorrectly assumes that energy costs (e.g the potential energy of a bitcoin) is equal to an actual bitcoin and improperly classifies this as "arbitrage". Given that energy != bitcoin, but rather energy + computational hashes = bitcoin means that there will always be a profit-opportunity for mining companies.

My $0.02.

P.S. - Like the original HN poster mentioned, I am also an idiot.

I think HN still has an intelligent userbase, but they're smart within their own domain (software engineering); when it gets into Economics I think the community falls completely flat.

I've seen a recurring theme on HN forums, specifically related to Finance, where there is this ingrained hatred. I believe most of this stems from early-stage software engineers feeling "cheated" out of equity in companies and - in turn - think all finance is evil (when in reality they just were naive about how finance & equity actually works).

Finished reading "When Money Does" - 6/10 rating. A lot of repetitive stories and introduction of too many people/events makes the book hard to follow.

Next up: "Confessions of an Economic Hitman"

I believe a number of people would. There are a few companies doing this (Pay With Moon, The Bitcoin Company) and it appears there is a market for it

Depends on your liquidity requirements but you may want to check with Open Node.

Just revisiting this thread - thanks for the recommendations!

Circling back to this thread. Thanks for the recommendations!