Real estate or Bitcoin?

Bitcoin is basically a pure momentum play. That is - rather than investing in stocks of actual companies (with real business, employees, and cashflows) which have recently been trending up..

It's like buying "trending" as an isolated concept, abstracted from any real cashflows.

Saylors trick works well enough on the way down. MSTR will have a very sharp draw whenever Bitcoin starts to steadily go down.

https://en.wikipedia.org/wiki/Tulip_mania

Familiar with 'Tulip mania'. But here we are at $100k, 16 years later.

The tulip bubble burst when it ran out of people to put new money in to keep inflating it. Real estate bubble burst similarly. In a global world, with a global digital "asset" it takes longer to run out of people. But in the end, its not really a productive asset, its just hype/momentum.

Real estate has positive "fundamental value".
Bitcoin has zero to negative "fundamental value". Seems to have entertainment value for those who love gambling.
You cannot live in bitcoin or rent it. I would choose real estate.

Couldn't you say the same thing about gold? Although it has some minimal utilitarian use or even paper dollars? Personally, I agree with what you're saying, but what causes me to pause a bit are the number of very intelligent people backing digital currency, especially Bitcoin. Although it does seem a bit fanatical, almost cultish. However, it is a bit head scratching that this digital asset has gone from zero to $100,000 and you're basically saying it's all smoke and mirrors.

They are part pumping and dumping, and part have strong libertarian, anti-regulation political views. They complain that our financial system is too inefficient /slow (which is on purpose to accomplish certain law enforcement and anti money laundering goals, but libertarians really don't care about those things, or think they should be done in other ways, or have some money they need to launder...).

Yes, it is smoke and mirrors, very very successful. Louis Vuitton is also very successful at selling margin in a handbag (even I bought it, and more than one!). Some people argue it is actually an "investment" since prices of luxury bags indeed have been going up faster than the stock market. If you are very very good at marketing you can have hype going for a long time.

There is some scarcity with gold, it is not substitutable with silver or other metals. Unlike gold, there is infinite supply of other "digital coins".

>>>the number of very intelligent people backing digital currency, especially Bitcoin.

And lvs are still very well made. My wife has one of the bottomless totes, that's 20 years old and still looks great!

So the last Bitcoin should be mined in 2140, although it seems like there are some guardrails in place that prevent every Bitcoin from being mined. At this point I think miners will only make money on transaction fees, and this will keep the block chain going. I would think Bitcoin would become more attractive to investors as it becomes more scarce? But the question you bring up krolic, seems to be the big debate. Is this truly all smoke and mirrors or is this a new form of currency that will continue to attract investors into the foreseeable future. And not just conspiracy theorist libertarian pirates.

When I read about it, it seems like quite an elegant equation, but then again, what do I know? I think NADA has expressed some skepticism here about Bitcoin in the past. Curious about your thoughts on it now?

>>>Is this truly all smoke and mirrors or is this a new form of currency that will continue to attract investors into the foreseeable future.

Yes.
It is smoke and mirrors that will likely keep going for a while and continue to attract "investors" (technically they are "speculators") into the foreseeable future.

>>>So the last Bitcoin should be mined in 2140,

Even so, its not scarce because I could start KroliKoin tomorrow using the same (or better!) blockchain technology. The main difference between Bitcoin and KroliKoin is the HYPE.

Suppose I agreed with you that it was scarce. So what? something scarce is only valuable if it is useful. There is some junk in my mom's garage that is very rare and scarce, but not valuable.

Unlike gold, from which you could make industrial products or jewelry, or an LV handbag in which you can carry stuff, bitcoin has no utility. What is the utility of bitcoin?

Some people will argue that bitcoin could be a "store of value", but so are many other things including all the currencies, LV Handbags and even real estate. There is not much scarcity in things that could store value, plus even as a store of value it is not very good: not sufficiently popular, slow transactions, too volatile, and transaction fees are high. My nanny does not accept it, and neither does the coffee shop in my neighborhood, or Uncle Sam.

Here is what finance theory would tell you about bitcoin, explained very simply by a NYU professor:
https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/BitcoinAsset.pdf

Just an FYI: Bitcoin was at $6,100 when he wrote this ; )

Very successful hype. :-)

There is no "intrinsic value" to bitcoin according to most of the existing finance theories.
However, momentum strategies, meme stocks and pump and dump schemes have worked great for many speculators in the last couple of decades and regulators have not caught up yet.

Since we went off the gold standard, is there really any intrinsic value to US Dollar or any currency?

A gold bug friend says the difference is the US military. Upon that rests real power, not just cultural sway.

The best legitimate use of bitcoin I’ve heard about is for residents of countries with non-stable currencies and capital controls. E.g., if you put money in a bank, you know inflation will drive its value to zero. So why not bitcoin instead?

Of course, a traditionally-minded person would say “Well, buy Tether or something else that is crypto-dollars”. But people of a certain mindset question the stability of the dollar…. more than the stability of bitcoin.

So given all that, is there utility in bitcoin for some people? Yes, I suppose. What should that utility be valued at? Hard to say. Is that what most people buying bitcoin are thinking about? Doubtful.

>>>Since we went off the gold standard, is there really any intrinsic value to US Dollar or any currency?

Agree, there isn't. A currency is not an investment, it is a medium of exchange/store of value.

The like to like comparison is "should I hold US Dollars, or some unstable currency Nada mentioned, or Bitcoin?"

And then it is your trust in US govt/military vs macro vs libertarian/globalization views, etc. Each currency is a better or worse store of value based on these factors.

And then there is hype.

But that hype has driven it from 0 to $100,000 coin. And there seems to be quite a few intelligent people that believe in this digital currency, including some major Banks.

There was a time when currencies weren't backed by the full faith and credit of the United States government. That led to bang and bust cycles and it was really buyer beware. Maybe that's where we're headed - at least for those who are happy to go in. My rule of thumb is: would I be happy being paid in that currency/store of wealth? If my employer suddenly told me I was going to be paid in Bitcoin, I'd probably quit.

MTH,
Do you really believe Bitcoin is so unstable that between the time your employer paid you and you were the value would go to zero or significantly crash? Because if that's not the case I don't think that your argument holds water

@30 not completely the right question. If you are "paid in a currency" that probably means the salary is set in that currency. And bitcoin can crash significantly in a matter of days or months making it not viable for such contracts.

If you peg your earnings to the dollar, and just use bitcoin to process the transaction once a month, based on exchange ratio on that day, and assume employees convert bitcoin to dollars on the same day, then sure, you are only introducing a short duration risk that might be acceptable, plus some transaction fees, however is it fair to say you are really being "paid in bitcoin"? or is it just a weird and expensive payment method for your dollar salary?

Even if it were to dip 5% in the time it took me to convert, I'd feel jipped.

https://www.capitalisnt.com/episodes/why-this-nobel-economist-thinks-bitcoin-is-going-to-zero-with-eugene-fama

>>>But that hype has driven it from 0 to $100,000 coin.

I have not seen too much explanation for hype in finance/economics, but it appears sometimes it does work quite well, giving rise to momentum strategies and bizarre outcomes like meme stocks.

Hype also made a lot of money for LVMH and few other brands.

>>>And there seems to be quite a few intelligent people that believe in this digital currency, including some major Banks.

What people say could be part of pump and dump schemes

Banks don't "believe" in crypto, they are responding to hype/demand and are adding capabilities because some of their wealth clients have bought crypto or want to buy crypto, and banks don't want these clients going off platform

There are also some interesting uses for blockchain technology that banks are looking at. But those are not the same thing as bitcoin

Thanks for sharing the link, Keith. I had high hopes for the commentary given who was providing it, but I was a bit disappointed. I didn’t find it too coherent. Not saying the positions aren’t well-thought out or not, just not communicated coherently. As compare to Krolik here, who has been very coherent in expressing her take on it.

Kind of off topic, but I'm wondering how people feel about the staggering amount of electricity consumed by Bitcoin and AI?

Nada, Good interview. In general, persistence of momentum has made a big dent to Efficient Markets Hypothesis already.

On Bitocoin, it seems that basic utility of Bitcoin is ease of transaction and avoiding banking / govt controls offset by volatility. And I like the example of Bear Babies. Other Cryptos I assume provide the same utility as Bitcoin. I would be very rich if I had any clue about when the market will change their mind about Bitcoin in favor of other cryptos or whether they will all go down.

I think there are a lot of people that really believe in this new digital currency. I have a client that's a mathematics professor, was also the co-creator of one of the larger digital currencies. Definitely not a pump and dump guy, more like a mega mathematics nerd who loves talking about all things crypto, he's in his early thirties.

I was also introduced to a young man in a hoodie a friend of my ex-wife, who's been involved in crypto for many years. He's sort of been this crypto advisor to some pretty big shots in various aspects of Hollywood and Broadway, he's made a lot of people extremely wealthy. Unfortunately, I've been sticking to a more traditional path in investing, and didn't take any of his advice. But I'm okay with that, because I know things could have very easily went the other way.

Although I don't believe that most people are in this and are promoting a massive pump and dump scheme, I don't have any evidence of that. However, even with the very little bit that I know about Bitcoin, I've been skeptical from $1,000 up to its current $100,000 coin price. And I've taken the advice from friends in more traditional investment positions not to invest, like krolic, they also call it basically a scam.

It will be interesting to see if smart contracts make it into the real estate industry. I've owned real estate in third world countries, where it can be a little bit dicey. I think being able to record those transactions in the blockchain and essentially hold your ownership there would be a big improvement over what a lot of these countries currently have.

Yes 30, The power usage is off the charts!

>> I'm wondering how people feel about the staggering amount of electricity consumed by Bitcoin and AI

Applying judgement to economic activity can be hairy. Would it be fair of me to judge Krolik’s former predilection for her self-professed LVHM hype when she could similar judge some economic activity that I prefer? Electricity is not bad in and of itself. In ~100 years, I imagine humanity to have burned through all the carbon reasonably available, after which renewable is the only option. But in the meantime, I think there is a judgement that can be made w.r.t. carbon.

So the economic question becomes the amount of GDP produced per unit of carbon released. I think AI will win on that basis over Bitcoin easily. Partly because the Bitcoin blockchain is very energy-inefficient compared to (say) the Ethereum blockchain. But more importantly, what is the productivity or hedonic gain to be had by economies from crypto? It’s been 15 years, if there was something, wouldn’t it have showed up already?

AI, on the other hand, has been improving productivity in pretty obvious ways. And I’m guessing it’s had and will have all sorts of hedonic benefits. And I am guessing the energy efficiency will improve drastically over time, as DeepSeek demonstrated, with smarter algorithms. Crypto, OTOH, relies on cryptographically difficult problems (read: energy-intensive) computed at mass scale (decentralization feature). You cannot get rid of the latter easily, and if you get past the former the whole thing would collapse. I’m sure I’m missing something, and that someone will figure out an even more efficient crypto eventually, but… for what productivity gain / hedonic purpose? If people could enamel their teeth with Bitcoin rather than gold, that’d be something… but unfortunately, that cannot be a thing.

Keith, you seem to have perfectly fine contacts in the crypto world who should be able to explain it to you. It kinda sounds like they tried explaining it, but it just didn’t make sense to you. And the fact that it went up now leaves you in a position where you are perplexed, that you are simply too dull to understand their explanation?

>> I've owned real estate in third world countries, where it can be a little bit dicey. I think being able to record those transactions in the blockchain and essentially hold your ownership there would be a big improvement over what a lot of these countries currently have.

Uh… I don’t think that’s how real estate property rights work. You can flash your encryption key all you want, but when it comes down to it, it’s a question of who can flash the guns… which best involves a stable govt.

I am half joking. I understand you meant it as a way that is better than, say, local office accidentally removing your name and slipping their cousin’s name instead, out of oversight from a central authority.

>>>It will be interesting to see if smart contracts make it into the real estate industry.

They should, and I agree it would be a particularly useful technology in the scenario you describe which would be a high utility use case for blockchain (which is NOT the same thing as a digital currency)

>>>I have a client that's a mathematics professor, was also the co-creator of one of the larger digital currencies. Definitely not a pump and dump guy, more like a mega mathematics nerd who loves talking about all things crypto, he's in his early thirties.

When he is talking about digital currencies, what specifically does he say? Does he say bitcoin should be worth a dollar? 100k dollars? and what would he base that value on? Because a lot of nerdy experts "talk about it" but in my experience they never appear to say anything concrete. Note: technical details don't count, because like with most things, technical questions about how it works and questions about usefulness/worth are totally separate.

>>>I was also introduced to a young man in a hoodie a friend of my ex-wife, who's been involved in crypto for many years. He's sort of been this crypto advisor to some pretty big shots in various aspects of Hollywood and Broadway, he's made a lot of people extremely wealthy.

So one thing to know about hype, it appears to be persistent and transferable. So if you are a president-elect with tens of thousands of fans, you can launch a crypto currency and it will be worth billions overnight. If you are a Hollywood celebrity, you also can do a variation on that, and it's like a pureplay monetization of hype. Before you had to launch a perfume or a cosmetic line or a clothing line or an alcohol brand and for each unit of product you would be able to charge a bit above product fair value for hype. With crypto, you could now skip the product and sell hype directly.

I am not sure if any economic or behavioral theorist has studied hype and could explain and predict its persistence, but someone should apply math to psychology and history, like a real life Hari Seldon. And then maybe we will have some framework to explain momentum and how long crypto hype might last.

>>> Before you had to launch a perfume or a cosmetic line or a clothing line or an alcohol brand and for each unit of product you would be able to charge a bit above product fair value for hype.

"Jeremy Renner's Hot Sauce"

It's interesting that Isaac named his fictional character Hari, In Sanskrit it has a number of meanings, but one here that would be appropriate might be the remover of darkness and illusion.

And just to be clear, my young acquaintance with the hoodie was just another young math prodigy with a real belief in BTC. He's not part of Hollywood etc, just sort of fell in with some people in the business. As a true believer, he simply convinced people, or more like directed people to buy into this digital currency rather early.

I think Bitcoin longs read Krolik's opinion and it is down 7% at 8.42pm Sunday night.

And down 10% now.

Let's hear from Gemini:

A good argument that Bitcoin is a real currency is that it fulfills many of the traditional functions of money:
* Medium of exchange: Bitcoin can be used to purchase goods and services from a growing number of businesses around the world.
* Store of value: Bitcoin's value has generally increased over time, making it a potential store of value. However, it is important to note that Bitcoin's price is volatile and can fluctuate significantly.
* Unit of account: While not yet widely used as a standard unit of account, Bitcoin can be used to denominate prices and debts in some contexts.
Additionally, Bitcoin has several characteristics that make it attractive as a currency:
* Decentralized: Bitcoin is not controlled by any central authority, such as a government or central bank. This makes it resistant to censorship and manipulation.
* Limited supply: The total number of Bitcoins that will ever be created is limited to 21 million. This scarcity can help to protect its value over time.
* Secure: Bitcoin transactions are secured by cryptography, making them difficult to counterfeit or tamper with.
* Portable: Bitcoin can be easily transferred between individuals anywhere in the world with an internet connection.
However, it is important to note that Bitcoin is not without its challenges. Its price volatility and limited acceptance are two of the main obstacles to its widespread adoption as a currency. Nevertheless, Bitcoin has the potential to play a significant role in the future of finance.

Wealth is becoming an abstraction with the decline of cash.

The fact that it is decentralized is a selling point or a nightmare depending on how you think of government. Right now we're divided into nation states that provide a modicum of rule and order. Governments are also capable of bad things - censorship, political and social repression, genocide, etc. Sometimes there's an out - regime change due to internal (Syria) or external (Iraq) pressure. On the other hand, Bitcoin is used by people involved in drugs and arms trade and human trafficking. I'll risk lawless governments that can be reformed or overthrown over uncontrollable lawlessness.

But let's keep in mind that the majority of various illegal activities still are using dollars.

What percentage of all dollar transactions are illicit? What percentage of bitcoin transactions are illicit?

Also, I heard the US govt would be able to control Bitcoin if needed, they just don't need to right now.

I've read that less than 1% of BTC transactions are illicit. Of course it's difficult get an exact number for obvious reasons.

I don't think anyone really knows the percentage of either cash or Bitcoin transactions which are illicit

https://www.nytimes.com/2025/02/04/business/sec-crypto-task-force.html

This has to be a totally random coincidence
https://www.reuters.com/markets/currencies/trumps-meme-coin-made-nearly-100-million-trading-fees-small-traders-lost-money-2025-02-03/

Yes lol. And don't forget the Melania coin. I suppose we'll get a Barron and Ivanka coin as well.

https://www.drorpoleg.com/in-praise-of-ponzis/

I've never bought any Bitcoin, but I did find it very interesting when I first started to read about it. The problem when it was extremely cheap, like a couple of bucks or less, you couldn't buy it. You had to mine it and that was beyond my scope. All these other meme coins to come out seem to just be like people playing the lottery, they're addicted to gambling. Maybe they're bored and they find it interesting? I still think there's the possibility that Bitcoin can become an even more established store of cash, as nada pointed out, especially in places where currency is literally not worth the paper it's printed on and governments can can devalue it at any time.

That said, I personally know people that have made many millions of dollars as true believers in Bitcoin. Yeah I've got a little fomo.

>> I still think there's the possibility that Bitcoin can become an even more established store of cash, as nada pointed out, especially in places where currency is literally not worth the paper it's printed on and governments can can devalue it at any time.

Therein lies the rub. Suppose BTC actually becomes an established store of value, which entails its value becoming stable. Stable in the sense that it can buy a relatively fixed amount of (say) wheat across 1- or 10- or 100-year spans of time. That’s the sort of history gold or USD (including interest) has had. E.g., gold bounces around some year to year, but not egregiously, and perhaps has averaged 2% real returns across 100 years.

If BTC became something like that, how interested would you be in understanding it, finding out more about it, holding it, and having FOMO about it?

Stores of value are certainly a thing, and I guess we could compare BTC to them.

Gold
- been a store of ever since civilization began (10,000 years)
- not a currency (no one buying bags of wheat with it), never been truly so, because of frictions (“Lemme smelt 0.00002 grams off my nugget for that can of beans, sir!”)
- supply truly limited (humans banging rock for 10,000 years only to find a trickle more each year)
- impossible to replicate (only so many elemental metals, and only one Earth with fixed quantities of each)
- $20T total value, as measured by current price times all the gold in the world that’s ever been mined

USD+interest
- been a store of value for ~200 years
- most important and dominant currency in the world (used for 25% of global intra-country exchange and nearly 100% of international exchange); note how we quote the value of everything in USD with a $ symbol
- supply artificially restricted, with spigots being controlled by both holders of USD (voters don’t like inflation) and 25% of the economy of the world (open spigots => economy collapses)
- easy to replicate in theory (I am printing Nadollors for purchase as we speak!), but in practice no one cares (sadly, I have yet to find anyone willing to pay me USD for Nadollars)
- $20T total value, as measured by M2

BTC
- been around for 15 years, has never been a store of value in its nascent history
- not a currency, will never be in any meaningful manner (like gold, the frictions are too high)
- supply artificially restricted, by holders of BTC (who ultimately have collective control over whether there can be more than 20M BTC via protocol change)
- trivial to replicate, with a pretty robust pipeline of people currently willing to pay USD for all manners of replicas
- $2T total value at today’s prices, but that could be anywhere in 10 years because it’s not actually a store of value yet

So here’s the thing. The two best stores of value known to mankind are worth $20T each. It’s hard to scale much further than that because you start exceeding the value of the world economy, all productive assets in the world (every company, every house, every piece of land), once you start talking about $200T.

If and when BTC fulfills its potential as a true store of value, there will be no speculative demand for it (no buying it to get rich, just to store value). If and when that happens, where will it land? The super-store at $200T that exceeds the total value of all other assets in the world, a basket which includes the two best stores of value mankind has ever come up with? I’d be skeptical. At $20T, as a third leg of a gold/USD/BTC hegemony for stores of value. I can imagine it. At $2T, as a second-tier store of value reflecting its inferiority as a store of value compared to gold/USD as noted above for serving as a global store, but still fulfilling a niche. I can imagine that too. At $200B after a collapse in speculative fever, but with true believers hanging on. Sure, I can see that too. Towards $0, as the true believers fizzle away over 10- and 100-year timespans, making BTC a curious relic of history to be marveled for generations to come, like Tulipmania? Sure, I can see that too.

Thanks for all that nada! And I guess I was being a little cheeky with the fomo, at these levels I have zero interest in BTC. Just fantasizing about having bought a hundred coins back in the day ; )

Meanwhile, I am pretty sure my former bestie who has used her considerable talents to capitalize on crypto without regard to any principle other than her own desire to get even richer just upgraded her private jet. She and her cronies are now fully in charge and are all dancing at the demise of the CFPB and the gutting of the SEC. They are making sure nobody will get between them and their prey ever again. To their credit, they have been honest about their belief that they have every right to take money and liberty from anyone who is not paying sufficient attention to stop them.

>> Just fantasizing about having bought a hundred coins back in the day ; )

Well, I’m still hanging onto my only remaining Semper Augustus bulb waiting for a comeback.

“You know what, I think I’ll update my private jet next year…”

*yawn*

Studying the issue in further detail:

https://www.investopedia.com/articles/investing/081015/can-i-afford-private-jet.asp#:~:text=Key%20Takeaways,%2C%20hangar%20rental%2C%20and%20insurance.

>> The least expensive, new private jet for sale is the Cirrus Vision Jet, with a sticker price of $2 million. However, used private jets can sell for as low as $250,000.

Maybe I should get one too? Start with a $250K one and then upgrade to a $500K one. “You know what, my private jet was getting soooo long in the tooth, so you know, I just had to get a new one.”

… “and please let MCR know next time you talk to her.”

Ha! I have not studied the issue, but my limited understanding that the money is not in the purchase, but rather in the regular fuel and maintenance (not unlike buying expensive real estate). I do wonder what the upkeep on her $45 million estate in Atherton is. She is a complicated individual, and while I am sad that our fundamental values have taken us in different directions, I am happy for her that she now has what she has always wanted.

Private jets can also be a terrific tax right off, and like many people who own mega yachts a lot of times they're leased out when not in use by their owners.

@Keith - one of the many reasons I have zero sympathy for tax rate whinging by those above me.

By the time people are raking in 8 figures, it's thru pass thru entities, LLCs, dividends, carry, and convoluted options structures. None of these guys are taking their income in ways subject to standard 37% max bracket. They also control their business & life enough to enjoy the greatest cities in the world without being in any one long enough to declare tax residency.

Cherry on top is structuring meals, travel, etc as business expenses to reduce their tax liability plus all the absurd things that can be written off, like private jets and dubious charitable structures.

I bet a significant % of CEOs demanding RTO and end of WFH take a home office write off too.

I recall the recently leaked 5 years of CEO of Citadels taxes showing a high-for-his-class tax rate paid of 29% on $1.7B of income... which is still clearly well short of the 37% bracket one might naively assume he'd have been primarily subject to. Meanwhile a lowly guy living in BK ;-) working in the industry several rungs below him basically pays the same effective rate.

Reagan's 1040 that fit on the back of a postcard +1.

@MTH lol yeah, the orange man said similar before he started promising tax relief or punishment on every random category of income he thought would excite his base.

No tax on tips.. or overtime.. or overseas tax.. or social security! Uncap SALT deduction! Make auto loan interest deductible but get rid of EV tax credits! Cut the estate tax but close the carried interest loophole! Possible these may add a few more pages to the 1040.

It's almost like he just says whatever the people currently in the room want to hear, but I'm sure it couldn't be that.

Don’t blame the rich for taking advantage of legal loopholes in the tax code to pay less tax. As long as they are not breaking the law, I have no problems with this. IRS tax code is overly complicated and the IRS and accounting profession likes it that way. Simplify it and while you’re at, have Elon and DOGE drastically reduce the size of this bloated institution. Of course the very wealthy will hire clever accountants to take advantage of every loophole that exists. Wouldn’t you? Be honest!

@911 - note my complaint as stated in the first line is the WHINGING by those taking advantage of the legal loopholes to pay lower than a regular high-income W2 earner.

I don't think Elon & DOGE are going to do much to the deficit, this is more a mix of showmanship & loyalty test of the government bureaucracy. Mostly so they can get enough GOP on board to allow various unfunded tax cuts.

Of course it's inefficient, every large organization is. The budget is in trillions so it will be quite achievable to find billions in waste/savings, etc.

Governments that print their own currency generally lean more towards being loose with spending than tight. It is not as simple as "run it like a private business" when part of your business is ensuring some level of safety net for the bottom X%. How strict we are with various benefits programs is a tradeoff between say how many more housing/food insecure children we are happy to deny in service of ensuring not a single person takes advantage of the program.

This is drastically different than say selling $75k cars to high income white collar workers. There you can assume some basic level of financial literacy, IQ, ability to fill out paperwork, etc. The number of free cars you are willing to give out in order to reach a larger market is probably 0.

Of course there is waste, but it's not the double digit percents, near trillions of dollars they talked about on the campaign trail. Particularly if you are not going to touch the hot stove of defense spending or various entitlement programs with broad support/enrollment, which makes up the bulk of our federal work force & spending.

And before someone cites "defense cuts", it's more logically seen as an elite rotation. The Thiel VC industrial complex is substituting their companies (Palantir, Anduril, Starlink, SpaceX, Tesla?) where they can replace the existing defense industrial complex (Boeing, UTX, RTX, etc).

Note Bezos' BlueOrigin is doing some cuts now as they didn't end up in the winners bucket.

Interestingly the State Department found a need for $400M of armored CyberTrucks recently!

One should at least be curious why we have an unelected official who did not have to go through the congressional appointee process because its a made up agency controlling budgets of agencies doing businesses with multiple of his private enterprises?

There's always been a revolving door, but I don't recall Boeing CEOs simultaneously sitting in any prior administrations advising on defense spending?

re: Cybertrucks, this is being walked back now as an existing bidding process and not happening..

https://www.politifact.com/article/2025/feb/13/ask-politifact-is-the-state-department-about-to-pa/

+1 on everything @Steve123 said!
https://www.msn.com/en-us/money/other/palmer-luckey-says-his-entire-career-has-led-to-this-moment-scoring-a-22-billion-us-army-contract-for-high-tech-goggles/ar-AA1yRHwe

"Don't ’t blame the rich for taking advantage of legal loopholes in the tax code to pay less tax. As long as they are not breaking the law, I have no problems with this"

When the rich use their influence to have tax breaks which specifically benefits them put into the tax code and then go "How did that get in there? Well, since it's already in there you can't blame me for u it."

GTFOH

+1 on what 30yrs said.

My former bestie is the master of this. Completely connected legislatively. I predict that it will become significantly easier for high net worth individuals to hide income in offshore accounts and crypto wallets. If the laws ease up in these areas, it's all good, right? I can't wait to see what they do to FinCEN!

@MCR - and you know who Luckey's sister married right? Matt Gaetz..

So the most useful situations for bitcoin:

1) store of value for ordinary folks living in countries with high inflation as Nada suggested (although I am not sure why they wouldn't they just buy dollars or other established currencies?) I imagine bitcoin is a bit volatile to serve as the primary store of savings for people that are not actually rich

2) People that are doing shady things that one cannot do in dollars and established currencies

3) People with assets that are afraid of potential disagreements with the govt or instability in their country and want BTC to be something they could escape with
- could imagine Chinese and Russian Tycoons wanting to escape with at least a fraction of their fortune, for example
- or in America, as empire crumbles, an authoritarian regime or angry mob could make the place dangerous for certain people (with wrong political affiliations, skin color, country of origin etc)

If shit hit the fan, do people think this would actually work, and governments, particularly the US govt, wouldn't be able to track/control/restrict BTC movements?
Asking for a friend.

@Krolik - your final point is right on - "If shit hit the fan, do people think this would actually work, and governments, particularly the US govt, wouldn't be able to track/control/restrict BTC movements?"

BTC is pseudonymous, not anonymous. That is, if you & all the wallets you send to/receive from do not have perfect opsec, then you are in fact traceable in the end given the resources of the state turned against you. There are entire private companies that specialize in de-anonymizing BTC transactions. One of the big players is - Chainalysis.

How is this so? Well the entire ledger is public. That is to say - every transaction is publicly available with the to/from wallets, amounts, and times.

People eventually need to get their money back into USD so they sell on an exchange where they can get USD back - say Gemini, Coinbase, Robinhood or many others. So the simplest tracking is that you trace the wallets transactions until it hits a known exchange wallet, and then you send a warrant to that exchange. Exchange gives up the owner of wallet1. Now you've ID'd Person1 , and you get a warrant to go after them and find out who they transacted with, and de-anonymize every owner of wallets that Person1 has transacted with. And built up and out from there.

In essence, no matter how perfect YOUR opsec is, simply transacting with people puts you at risk of being de-anonymized easily.

Kind of like how Facebook has dark profiles even on non-members because all it takes is 1 idiot friend to give the app permission to their address book, and now they have your name/email/address/phone. The more of your idiot friends do so, the more information they can build up about you.

Book on the subject - https://www.amazon.com/gp/product/B09SKW8WRV

Sure, govt knows who you are. But can they take your BTC money? And what about cold wallets?

Or is a LV bag and gold jewelry a better "investment" after all?

Thanks for the book recommendation

@steve123 - I hadn't thought of that re transactions leading to owner identification. While governments themselves may politicize the ability to de-anonymize, the hope would be it would eventually come to light. A truly anonymous payment system is a precondition for anarchy.

@Krolik If the shit hit the fan, you'd stand a fighting chance by hidig a physical asset like gold (maybe).

What if you use a non-kyc exchange like uniswap? I don't know if it's bulletproof but it certainly makes it More difficult to trace you.

@Steve123 - I did NOT know that additional factoid re Palmer Luckey. I didn't think his ICK factor could get any higher, but with that additional piece of info it just went to a whole new level.

Re bitcoin, anything that is going to serve as currency requires consensus. Such consensus is the essence of government. All these crypto folks aren't against government per se; they just want to be the ones with the power to set the rules. If you find yourself sharing the values of those who tout BTC as the future currency and adopt it as their currency of consensus, those are the people you will be dependent on if the world descends into anarchy. To each their own.

Also, the problem with cold wallets is not the government taking them, it is bandits taking them the same way a burglar might steal your jewelry. If you are determined to go in that direction, I suggest arming yourself because if the rule of law continues to head in the direction they are taking it, we will be back in a "might makes right" world. Choose your team wisely.

Regarding cold wallets, even if you were to lose it or it is stolen. That's not actually where your Bitcoin is stored. It's stored on the blockchain, and you can access it with your passphrase. From what I understand, your most vulnerable to hackers in hot wallets or on centralized exchanges. I'm not sure if anybody thinks that Bitcoin actually becomes a currency, and replaces the various Fiats. I think they look at it more as a tool to store your money away from the centralized banking system. The handful of people that I know that own it, have simply bought it as a trade to make money. They have no Grand ideas outside of that, and some of them have made many many millions over the years, including my doctor!

The true believers of Bitcoin are really no different than 'gold bugs', they're afraid of the government destroying the currency, etc. and there's also plenty of suspicious and shady activity that goes on in the metals world. I read a story recently, it was actually an interview on a major news outlet with someone who panicked when they thought that Harris was going to get elected. They sold their house and used the money to buy gold. Unfortunately, they bought from an unscrupulous dealer who was charging ungodly premiums on various coins. I believe when they tried to go to a legitimate gold dealer in Vermont, they were told what they owned was worth 30% less than what they paid for it.

Cold wallets - presumably you did at least 1 transaction to get the BTC into it, so there you are again being likely eventually traceable by various hops.

DeFi exchanges that don't KYC - well, if you are just trading crypto for crypto, maybe.
But 1) you need to ensure both wallets in the transaction never did and will never in the future do a transaction with a wallet that has touched (directly or indirectly) a KYC exchange. (Good luck with that)
and 2) again, you are exposed if you ever want to get that crypto back into USD or other "fiat".

So if you somehow live in a world where you can earn & spend exclusively in crypto, maybe you have a chance. But even then probably not.

I assume we are just hearing of the negative cases and not the positive ones, but it strikes me as interesting that even the bitcoin billionaires cannot evade the long arm of US law enforcement. See - SBF, CZ, the Bitmex guys, Mr&Mrs Razzlekhan... and many more. It is worth asking yourself why people with billions in magic internet money cannot evade the feds, but you might be able to?

For one, I think it's harder to evade the feds when you're a billionaire and you're moving, presumably tens of millions of dollars around. Less scrutiny for those moving around significantly less funds. And anyway, what percentage of people are trying to hide money in crypto? Relative to the total amount of crypto in the marketplace. Look at the crypto family from Holland that's living around the world after hitting the Bitcoin jackpot. He's constantly interviewed by mainstream media, I don't think this family is trying to evade taxes or government scrutiny. There are plenty of people who own fractions of BTC if not more through centralized exchanges and are simply using it to accumulate wealth, at least for now. Certainly, the vast majority of people who own BTC are not criminals I don't have criminal intentions.

Time will tell who was right and who was wrong regarding BTC, maybe people like Steve and krolik have it all wrong? Maybe you don't understand , don't truly understand the future of it? That is a possibility.

Keith>> The handful of people that I know that own it, have simply bought it as a trade to make money. They have no Grand ideas outside of that, and some of them have made many many millions over the years, including my doctor!

Keith>> And anyway, what percentage of people are trying to hide money in crypto?

I don’t have any data backing this, but my impression is the same as Keith’s. Like most such things, it starts with an innovation that makes sense. Maybe there is a place in the world for a digitaal currency or store of value free from the whims of your local government’s printing presses. But after enough time and momentum, people jump in on the trade as a way to make money. They might not be true believers, but the price makes them true believers. After all, if this isn’t real, why does it keep going up in price? And of course, this attracts all sorts of individual and corporate grifters.

Keith, the people that you know who own it as a trade, do they have an exit strategy?

@nada - yes, do I think its a trade - absolutely. Am I participating? No - I dabbled previously but my job has enough momentum exposure I don't need more.

I have one friend who has made millions off it, primarily as a trade / working in DeFi. Paid off his housing, moved to a low tax domicile and is basically financially free. Ironically last we spoke he was looking to move back to "TradFi". His last 4 jobs have been TradFi/crypto/TradFi/crypto. So no particular love for the product.

Looking at recently quarterly fillings it's noticeable even some of the big TradFi hedge funds now seem to have measurable BTC exposure (via ETFs). This again tells me it is a trade.

Re: true believers, it is very similar to the goldbugs from what I've seen, none of them are getting rich. I have a friend who has been in a 10+ years true believer, to the point that he & his wife were involved in BTC ATMs at some point or another. He has also, apparently, never sold. He lives a very modest deep-outerborough life primarily off a TradFi income, and ironically his wife works for a local government agency. Last we spoke he was also looking for a new TradFi job despite his true beliefs..

Hmmm - Maybe I'll wait for the next crash, buy a little and hold until the next boom.

Lather rinse repeat during the repeating cycles while never putting an amount in that I can't afford to lose.

@Krolik: " But can they take your BTC money? And what about cold wallets?
Yes, in both cases.
@Keith: "true believers of Bitcoin are really no different than 'gold bugs', they're afraid of the government destroying the currency,"
Yes, and as someone once said, it also attracts the kind of people who think that banks, financial institutions, VISA and Paypal are "very likely" to defraud them while something entirely new and unproven with no legal structure is somehow less likely to defraud them or lose their money. See also people who think that bitcoin might be more stable than the US dollar.
@Keith: "I think it's harder to evade the feds when you're a billionaire"
No, government leaders generally have a tendency to give billionaires a pass. Why? Because they like the contributions, bribes and sucking up.

I agree with you Aaron regarding billionaires, but the IRS tends to scrutinize tax returns of the very wealthy. Why do you rob banks? Because that's where the money is ; )

I think cold wallets are very difficult at least currently to hack and steal BTC from you. If I did own BTC, that's certainly where I would keep it. That said, how many people have their bank accounts hacked or brokerage accounts hacked? I guess at least with some bank accounts you have FDIC insurance protecting a portion of it.

>>>The handful of people that I know that own it, have simply bought it as a trade to make money. They have no Grand ideas outside of that, and some of them have made many many millions over the years, including my doctor!

@Keith
well, that sounds like a Ponzi scheme...

>>>Time will tell who was right and who was wrong regarding BTC, maybe people like Steve and krolik have it all wrong? Maybe you don't understand, don't truly understand the future of it?

@Keith
but based on what you wrote above, it seems that people buying it don't understand the future of it either

>>>it strikes me as interesting that even the bitcoin billionaires cannot evade the long arm of US law enforcement. See - SBF, CZ, the Bitmex guys, Mr&Mrs Razzlekhan... and many more. It is worth asking yourself why people with billions in magic internet money cannot evade the feds, but you might be able to?

@steve
these people actually did something wrong and were persecuted, vs just trying to store/move money via Bitcoin across borders, but without bank wire or Western Union paperwork and fees, and/or capital controls. Could be useful if US suddenly became very unfriendly to people that don't fit a mold (white American born Trump voter for example).

Right now they are coming for "DEI people" and anyone that worked in the Biden administration
And most are afraid to speak out
...
How soon might they come for me? Or my child? I put down on all paperwork that the child is "white", but in truth, the child is half brown, so might not pass some racial purity tests if those are ever implemented

@Krolik - I'm not saying these people were innocent, I was saying this in the context you introduced - "If shit hit the fan, do people think this would actually work, and governments, particularly the US govt, wouldn't be able to track/control/restrict BTC movements?"

If one is paranoid and thinks the government is going to be able to track them/their transactions/their money.. shouldn't the fact that they clearly are something that should give them pause?

The government was able to get legit criminals who stole money (SBF/Razzle the most clearcut crime), and they had tremendous assets at their disposal! Buy an island, some private jets, a citizenship and GTFO!

Libertarians could argue the legitimacy of some of the crypto prosecutions like a lot of the exchanges (Bitmex/Binance) that got caught in the regulatory gray zone of the US making it very hard to run a legal crypto exchange until quite recently. I'm fine with those prosecutions, but I get it.

So take off any partisan/moral/etc blinders - if crypto transactions were easily tracked & used in prosecutions by Biden era Feds (good), why couldn't Trumper era Feds for alleged violation of any new laws they pass (bad)?

That's the problem with the creeping powers of the executive branch at the federal level. We all sort of shrug our shoulders when our team is in power "hey I'm sure they'll do the right thing", but 50% of the time.. its the other team calling the shots, using&expanding those same powers (now we believe democracy is ending).

>> got caught in the regulatory gray zone of the US making it very hard to run a legal crypto exchange until quite recently

Yes. Running a darkweb marketplace for selling drugs and worse => libertarian gray zone targeted by prosecutorial overreach deserving a pardon. 43 lbs of fentanyl ($650K?) coming across a 5525 mile border with a $750B/yr trade partner => pretext for an international incident.

You are talking Silk Road, yeah obviously running a drugs & crime marketplace, as a US citizen located within the US, is a crime.

I'm talking the guys who were running simple crypto exchanges offshore, personally located offshore - Bitmex/Binance with loose KYC, arguably partially due to the strategic ambiguity that US regulators were taking for way way too long.

That is to say - if you are running a business in Canada or Hong Kong and the US says its regulations say its illegal to do business with Americans, but you do a bad job of denying accounts to Americans - should you go to jail (and how long)? Or for failing to implement US Anti-money-laundering processes (again, as a company & person based outside the US). Reasonable people may disagree?

>> …is a crime

Meh, used to be a crime?

>> Reasonable people may disagree?

Sure. I’m just pointing out the inconsistency. I don’t see any libertarian lobbying for opening the borders for drugs to flow. Nor getting rid of AML & KYC for banking and “TradFi”.

I suppose once we have spent a trillion dollars making Gaza the Riviera of the Middle East and are trying to shut down crypto-financed terrorists attacks on Trump International Hotel & Residences Gaza every other month, someone will come up with the great new idea of AML & KYC for crypto.

“For far too long, politician have been allowing unfettered scum to roam crypto. No longer!” I am generally bemused by the 180 degree turn in the Republican platform, and the assailing of the policies, misadventures in the Middle East, free trade, etc. “We will never again…” goes the rhetoric, but the never again is against whatever the same Republican base was riled up and gung-ho about 20 years ago. At least George Costanza came to the eventual realization that whatever he felt is absolutely right in the moment, he should do the exact opposite.

First, it was a pardon for the “peaceful” protesters. Then, those attacking the police. And now, we’re at the pedophiles.

https://www.wsj.com/us-news/law/jan-6-released-aftermath-7e8a57a4

I read the text of the pardon, and I’m thinking “Yeah, I think he seems to have pardoned the pedophilia too…” For those of you unable to read the WSJ article, the argument being made in court is that pedophilia charges brought because of evidence discovered during prosecution has been pardoned too. Unintentionally, I’d hope, but who knows.

MCR, what is your *legal* take on the argument? Does crimes uncovered during the investigation of a crime count as being “related” to the crime?

https://www.whitehouse.gov/presidential-actions/2025/01/granting-pardons-and-commutation-of-sentences-for-certain-offenses-relating-to-the-events-at-or-near-the-united-states-capitol-on-january-6-2021/

“grant a full, complete and unconditional pardon to all other individuals convicted of offenses related to events that occurred at or near the United States Capitol on January 6, 2021”

@nada - indeed, the latest headline I saw from FT, more very fine people -
"Trump administration pressures Romania to lift restrictions on Tate brothers"
https://on.ft.com/3CUGZeQ

And hard to square Don "I was always against going into Iraq / unilateral pull out of Afghanistan" with "So we're gonna take over Gaza and make it bigly beautiful beachfront resort".

It's almost like he doesn't have any beliefs.

Although I'm a law school dropout, I think it's pretty clear that those pardons only relate to January 6th convictions, actions. I guess you can't blame them or lawyers for trying to absolve them of other crimes? Although I think some of the pardons that Biden granted covered not only present but future actions?

The question will become what was revealed during discovery as it related to the insurrection. I don't think that evidence would be admissible (fruit of the poison tree etc.). They would have to find other non related evidence is my guess.

@nada - re "MCR, what is your *legal* take on the argument? Does crimes uncovered during the investigation of a crime count as being “related” to the crime?"

My response: I have not dug into it because many judges are abandoning legal analysis and just doing whatever they want. There is some awesome infighting going on right now at FedSoc. Needless to say, I am on Team LUTTIG, SASSOON, DRISCOLL et al. We are in interesting times indeed when die-hard members of FedSoc accuse Judge Luttig of having Trump Derangement Syndrome.

@MCR - re: FedSoc members like SASSOON & Co, it strikes me that the only true believers are those at the bottom rung no? This seems like them realizing the entire movement they subscribed to was never about anything other than power (as many movements are once they have power)? Oh so it was just a means to stack the bench and get the outcomes our benefactors wanted all along?