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Bitcoin Tech Talk #506

Interesting Stuff

Is Nostr getting brigaded?

Opt out of the rigged games.

Do not despair about that which you cannot control.

GBTC has multiplied and mutated into many products in the stock market. I suspect they'll all suffer similar fates.

We really need open source hardware for AI.

Remember, in a fiat world, the stock market is a Keynesian beauty contest.

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Bitcoin Tech Talk #505

Interesting Stuff

That was the greatest fight I've ever seen.

Every Bitcoin Conference should have saunas and cold plunges.

Hope is proportional to how much you can accurately plan.

Living honestly is a hard things in the world to do, which is why it's a virtue.

The problem with free is all the virtue that's required to make it work.

Have good fundamentals and many issues fix themselves.

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Bitcoin Tech Talk #504

AI fails Zork, $20M protest machine exposed, fake disease fools all AIs, Cashu mints drained, Silent Payments guide, NAKA's $210M trap, Xenophon's ...

Value capture is such a dystopian term. It's usually used by people that are used to rent-seeking, as if value were something you can go trap and make your own.

Remember when tokens used to refer to altcoins and not the input/output for LLMs?

The best part of having Bitcoin is being able to say no to people that want to monetize your reputation.

Scarcity >> Privacy Look at how much ZCash moved today (down 30%) on the news that there was an exploit that might have created unlimited extra ZCash tokens that was closed on June 1. Bitcoin is still the only game in town when it comes to credible long-term absolute scarcity.

The dangers of leverage, $NAKA edition: The company has $210M in debt to Kraken paying 8% APR backed by most of their Bitcoin stash, or 4405 BTC. This loan is due in December and as BTC price lowers, their Loan-to-Value ratio gets worse and worse. At $63,500, they're at 75% LTV At $59,600, they're at 80% LTV At $56,000, they're at 85% LTV They have a little bit of dry powder left, about 650 BTC that are not pledged to the loan, but they need it to service the 8% interest and the shortfall between revenue and expenditures (particularly executive salaries). Historically, they've tried to hover around 70% LTV, suggesting that the liquidation price isn't too far away from that. So to sum up, there are many ways for this to go wrong: 1. Bitcoin drops enough where they get liquidated ($50k would certainly do it, probably something higher would also do it) 2. BItcoin stays down until December and they can't roll over the loan. 3. Bitcoin stays down until December and they roll over the loan on punitive terms that reduces their stack quicker than they are now. They would likely have to sell some Bitcoin because they're not getting $210M in loans in this scenario. There's really only one way for things to go right: Bitcoin price goes up massively by December. Even then, the interest payments and operations expenses will likely destroy a ton of value. The lesson here isn't to dunk on the company. It's just showing you how fragile leveraged positions are. You can have the world's most pristine asset and still lose if the market moves against you.