Bertrand Darnault

@patio11 Does the EM use case require few (stable)coins because balances/savings held would be minimal? In other words, would you see a high number of transactions on top of a relatively low supply base? I'd love to see data around this...

The assertion that stablecoin growth is primarily driven by what might be called real usage in emerging markets is a popular one. It flatters the ecosystem and that use case might be its only product with material usage that is not speculation. That use case requires few coins.

I listen to a few crypto podcasts and wanted to highlight something which is both true and given the incentives of the speakers commendably epistemically rigorous. Begins approximately here, in a conversation about stablecoins and crypto yields: overcast.fm/+UTHIPo0i4/43:…

@brockm @patio11 covers the nuances around this topic very well on bitsaboutmoney.com. These two posts are especially relevant: bitsaboutmoney.com/archive/no-pay… bitsaboutmoney.com/archive/optima…

I’m somewhat skeptical that there’s some technological solution around the corner, where the scaling issues around bitcoin are going to be solved to such a degree, that all payments themselves can be trustless. The main reason being that all of the solutions being pursued thus far, achieve trustlessness by giving up on the possibility of recourse in the transaction. The only real counterparty problem being solved then, is eliminating the possibility of settlement default, once a transaction has been arranged. But this has never been the only trust issue in payment arrangements. Most of the kinds of default that people think about in the real world, have nothing to do with the possibility of non-settlement, and everything to do with the possibility of breach of contract on the delivery of goods or rendering of services. To the extent that bitcoin scaling discussions set these issues aside, and instead center the discussion around durability in only the most adversarial situations (resisting state overreach, usually) — a broader understanding of the way economic advancement comes about is ignored. Economies don’t flourish simply because they have reliable money and payment schemes. They flourish because social trust is possible — that people will honor contracts, commitments, won’t resort to violent means of dispute resolution. This is actually why I find the anarcho-capitalist frame of thinking around bitcoin so distracting to moving bitcoin forward. The target it’s aiming for, simply bypasses all of these notions, and is really just an exercise in question begging. “But if we have recourse on payments, how will that prevent the government being able to regulate or censor it?” If that’s what you think is the highest good to be considered in the project of finding ways to scale bitcoin payments, then I’d suggest that none of the solutions you land on are going to be satisfactory for mainstream use — ever. Because there can never be a way to control for matters of social trust through cryptographic protocols alone. We are not digital light beings that live inside computers, that can be forced to act or not act based on computational rules. Our interaction with any technology is always analog and mediated by a social context — where all the interesting problems of counterparty risk exist. This is, of course, what the insight was that led to the creation of tbDEX. Instead of any doubts being raised in me about this observation, the stridency of my stance here has only increased, as I’ve watched the conversation move forward.

@nicolasburtey Where are you seeing evidence of this? Gold was a broadly accepted MoE. Bitcoin continues to remain a niche MoE, even as a replacement to poor MoEs/fiats. Gold's elastic supply made it a suitable base layer for an MoE. The same can't be said of Bitcoin and its inelastic supply.

bitcoin is now more scarce than gold, but the reason to be bullish on bitcoin is because it is becoming a better medium of exchange than gold has ever been.

@ZeMariaMacedo @ethena @Delphi_Ventures Another question Re: negative funding is how holders of USDe will behave. Ethena assumes they'll redeem USDe without charging them negative interest. The reserve fund creates moral hazard. Many users will compose USDe on defi for yield and perceive it as stable collateral.

@ZeMariaMacedo @ethena @Delphi_Ventures Isn't it true in any scenario where the funding rate is negative long enough to: 1) Cause the supply to shrink 2) Start depleting the reserve (regardless of the market cap/size that USDe previously reached)

$ENA is live! @ethena is one of our highest conviction bets this cycle both @delphi_ventures and personally I believe: - sUSDe will offer the highest dollar yield in crypto at scale - USDe will become the largest stablecoin outside of USDC/USDT in 2024 - Ethena will become the highest revenue generating project in all of crypto Thread on what Ethena is, why I'm excited, and the risks as I see them

@nicolasburtey Check out recent tweets and Medium posts by @brockm for insights into why some Bitcoiners may prefer monarchies. Here are two relevant ones: x.com/brockm/status/… x.com/brockm/status/…

Hearing more and more in bitcoin circles that monarchy is better than democracy. I’m not sure how I feel about that.

@BitcoinBombadil @brockm As for the odds of Bitcoin being adopted as money, I highly recommend reading "Better Money" by @lawrencehwhite1

@BitcoinBombadil @brockm And here's a helpful read on the subject: dankradfeist.de/ethereum/2021/…

Even in Fiat Clown World, Cash is at the top of the Balance Sheet in the Assets category because it is considered the lowest risk/safest store of wealth on the balance sheet. In time, people will look at #Bitcoin on the balance sheet in the same way they look at Fiat Cash today.

@brockm @Gh4nder If Bitcoin IOUs are needed for it to be used as money, all users will be paying for "political risk insurance" without receiving it. In addition to paying for "stability insurance" due to Bitcoin's inelastic supply. These costs seem prohibitive to its broad adoption as money.

@Gh4nder Bitcoin doesn’t have to replace fiat currencies to be successful. It merely needs to function as an efficient hedge against political risk. And being that, doesn’t necessarily make it the best universal money in all respects.

Arguing that money should, by some objective measure, be a safer store of wealth than capital itself, is moralistic nonsense. To the extent that everyone thinks we can replace the function of capital markets as a superior savings vehicle -- you know, things with income-bearing assets behind them -- with fixed-supply money is just complete nonsense. Obviously I'm going to have to write my own bitcoin book now. I don't really have a choice.

@brockm Absolutely, that's what I meant by "salary or _ideals_". I wouldn't be surprised if it's often a combination of both, explaining the level of pushback and denial...

Generally speaking, people who advance the arguments at issue here, are almost always -- with extremely rare exceptions -- political libertarians or anarchists. And that's why they're attracted to say, the Austrian school. Because the whole economic approach is built atop libertarian political ethics.

When I see someone in the bitcoin space talking about how bitcoin will elide the need for a stock market in the future, which they dismiss as nonsense high-risk speculation in the same way a long-bearded Marxist would, without any semblance of understanding for what a capital market is, I make a mental note to not take that person too seriously going forward.

@brockm Re: fiat, I'd love to see more discussions on "upgrades" like NGDP targeting. From people like Lyn Alden who look at this from a control systems perspective. And from proponents of rule-based systems, one of the core tenants of crypto.

@brockm "It is difficult to get a man to understand something, when his salary depends on his not understanding it." (Upton Sinclair) Whether salary or ideals, there's a clear dismissal of market drivers+evidence. Ex: the lack of demand for BTC in El Salvador.

@brockm Agreed. Good perspective on this topic: dankradfeist.de/ethereum/2021/…

Expanding on this point a bit: it really does seem that a lot of people in the bitcoin space really do believe that having sound money will remove the need for, or the ability for to have structures of high finance. And that raw idle savings will become the primary method of capital allocation. It's really bizarre and actually makes no sense whatsoever. But these ideas do get a lot of engagement and retweets.

@TimmerFidelity Great threads and base case model for valuing Bitcoin. Can a case be made that BTC will mostly replace monetary gold, as its S2F surpasses it? Similar to gold over silver. Where would you place BTC in the S-curve vs. gold+silver? Seems like a key part of its exponential growth.

Following up on my previous threads, here are some thoughts on Bitcoin’s potential market share vs gold: In the chart below I show the value of “monetary gold,” which is that share of gold held by central banks and private investors as a monetary asset (as opposed to jewelry or industrial uses). This is an admittedly inexact science, but based on data published by the World Gold Council, I am guessing that the share of monetary gold is around 40% of total above-ground gold. Based on the calculations outlined in my previous threads, I estimate that Bitcoin will eventually capture around a quarter of the monetary gold market. At 40%, monetary gold is currently worth around $6 trillion, while Bitcoin is worth $1 trillion.

@sarahtavel @sarahtavel USD stablecoins are liquid, digital and way more stable than both pesos and BTC. As a result, they dominate crypto asset adoption in Argentina and everywhere else. Here's a chart from @chainalysis on USDT vs BTC purchased on CEXs in Argentina.

And yes, I know that the Argentine peso, when compared to just about any other currency, doesn't look good. What all Argentineans want most is the USD, not crypto. However, USD isn't easy to get, and people are literally stashing wads of USD bills under their mattresses to save $. It's not exactly liquid or digital. So, my point in showing BTC in Pesos is that seeing BTC against your local currency affects how people think about crypto. I can't help but wonder whether it affects ppl's willingness to consider a USD stablecoin. p.s. This is a screenshot I took in October before Milei's December devaluation, which makes the point a little clearer bc it's more recognizeable.

Another way to look at crypto to get you out of US-centric thinking: We're used to looking at crypto prices in USD. Imagine if you have a high-inflation local currency (like my family in Argentina). This is Bitcoin in Argentine Pesos (!):

@artemis__xyz @solana @artemis__xyz @httpsageyd I noticed that the transfer volume of $USDT on @solana grew for the 1st time to 5% in January. Any idea why? I cannot find any clue...

Stablecoin transfer volume surpassed $367 billion for the week of January 8th. This notable growth can be attributed to the $USDC transfer volume on @solana, which has propelled stablecoins to reach their highest transfer volume levels in over a year.

@karpathy @paulg Same experience with night dives. The combination of silence, weightlessness and lack of visual stimulation relaxes all the senses. Had a magical experience diving under a full moon with bioluminescent plankton. We swung our hands to use the plankton as a flashlight.

@paulg 💯 the deepest version of this I’ve felt was a few years ago in a night dive - floating in complete darkness and silence through an alien environment teaming with life (and probably a pinch of nitrogen narcosis).

I don't think I'm ever calmer than when scuba diving.

@jp_koning @nic_carter @Nouriel @MountainUSDM @jp_koning the rebasing method for USDM is described here: docs.mountainprotocol.com/reference/usdm…

It's interesting to see @Nouriel championing flatcoins over stablecoins. I think he's got this the wrong way around, though. Stablecoins will always dominate because the medium is "wedded" to the unit of account, and that's a useful feature.