Bitcoin in a hyperbolic bubble

[Duke of Marmalade]

- because what else would he be doing with his already accumulated enormous wealth -

Actually that one does puzzle me. Why on earth does Muskie bother with anything? I guess his enormous ego needs constant pampering. I further guess that is why he has embraced btc - as you say hardly because he is short a few bob. All one can say is that the evidence is that the combined announcement of taking a position and accepting btc for his cars has turned out to be a huge pump. The motivations for that pump are, as I say, puzzling.

 

[tecate]

All one can say is that the evidence is that the combined announcement of taking a position and accepting for his cars has turned out to be a huge pump. The motivations for that pump are, as I say, puzzling.

I see. So when the next corporate adds btc to their balance sheet, they should do so in stealth? Maybe they can ask the SEC not to allow such filings to be published?...or what would be an acceptable standard here so as you don't accuse them of not only being involved in pumping but alluding to a subsequent dump?
On the dumping side of things, at what price should we expect Tesla/Musk to offload btc?

 

[Duke of Marmalade]

Boring you?

It's a figure of speech. Why is he promoting this trivia?

What on earth are you talking about!? Do you even know what censorship resistance is - as that statement of yours suggests you don't.

You are right, I haven't a clue what "censorship resistant" means. Please enlighten me. What I meant is explained in my next answer.

What 'way around regulation'? Tesla is a regulated company. Bitcoin is regulated in terms of how it is utilised within that corporate world. You're just dreaming up and casting aspersions now.

In any plc there is a freeze on dealing in the shares for a period before announcement of results. This is totally enforceable as there is complete transparency in transactions in the shares of plcs. Anybody working on the latest formal announcement of Tesla would be totally dumb not to see the chance to make a quick buck on a totally predictable btc spike. It would I think be against the law to exploit this insider knowledge. But the temptation for some would be irresistible given that any dealings in btc are totally untraceable, though correct me if I have that wrong.

YOU said at the time that this was a potential 'game-changer'!

I meant it would be perceived my mainstream Wall Street as a pgc and that there would be a reaction from that quarter. I am not sure whether that has happened.

Turn on CNBC right now. Within 5 minutes there will be some Wall Street type that is shilling something or other. When have you ever criticised this? Yet in this instance, you're all over it because of a hatred for a certain decentralised monetary tech. Where was your moral outrage 12 months ago when that hedge fund owner went onto CNBC and told everyone - with oscar-winning emotion -that the world was ending...only to find a few weeks later he had made millions having taken the opposite position to what he was stating!?

This is a thread on btc. You are right I didn't comment on those incidents and neither have I commented in this thread on recent mass shootings in the US.

You deliberately misinterpreted Tesla's original statement on the matter. They stated that they 'may' convert btc received to usd - but you pointed to that with the suggestion that they would - not that they 'may'. It's on the back of that that I've brought Musk's clarification (that they won't convert back to usd) to your attention.

"may" "would" mea culpa

On when Muskie will dump that is a difficult call. Wolfie is right that it is difficult to see his motivation as increasing his wealth. So it will be a circumstance where continuing to hold would damage his ego. So I withdraw my accusation that he pumped with an actual view to dumping - but pumping he did and continues to do. The very fact of his purchase was a pump, we can't blame him for that. But backing up his investment by an immediate announcement that his company will accept btc was not necessary. Anybody with a bit of decency would have made the latter announcement first so as not to be accused of pumping, but I don't think such accusations would faze Mr Musk.

 

[tecate]

It's a figure of speech. Why is he promoting this trivia?

If it's not of interest to you, then you don't have to pay any attention to it. On 'promotion', he made a statement that is of interest to many (even if its of no interest to you).

You are right, I haven't a clue what "censorship resistant" means. Please enlighten me.

Censorship resistance is one of the major selling points of bitcoin. It means that unlike traditional monetary networks, nobody can censor anyone from accessing the network - and sending or receiving payments.

In any plc there is a freeze on dealing in the shares for a period before announcement of results. This is totally enforceable as there is complete transparency in transactions in the shares of plcs. Anybody working on the latest formal announcement of Tesla would be totally dumb not to see the chance to make a quick buck on a totally predictable btc spike. It would I think be against the law to exploit the insider knowledge. But the temptation for some would be irresistible given that any dealings in btc are totally untraceable, though correct me if I have that wrong.

Why are you singling out bitcoin in this instance? BTC transactions are not totally untraceable - far from it. It's possible to not be identified as a participant on the network but it's complex to achieve that more often than not. The very same thing is possible in the traditional world and happens all the time despite these rules you talk of. Lets take a recent example. In March of last year in the US, around 4 US senators were found to have sold off shares in advance of measures the US administration took to deal with the pandemic. They had knowledge that the rest of us didn't and they acted on it - and benefited by it. You single out potential for wrongdoing when it suits (when its related to bitcoin) when the reality is that all of this manipulation and sharp practice has been rife with the wall street set since day 1. Don't go claiming otherwise.

I meant it would be perceived my mainstream Wall Street as a pgc and that there would be a reaction from the quarter. I am not sure whether that happened

Same difference - what has changed today that it's no longer the game changer that you said it was?

This is a thread on btc. You are right I didn't comment on those incidents and neither have I commented in this thread on recent shootings in the US

You're applying double standards. You hold anything related to bitcoin to a higher standard. There's no equity in taking that position.

So I withdraw my accusation that he pumped with an actual view to dumping - but pumping he did and continues to do. The very fact of his purchase was a pump, we can't blame him for that. But backing up his investment by an immediate announcement that his company will accept btc was not necessary

Let's assume that he is for expediency. How is he any different to ANYONE who discusses stocks, shares, markets, etc on any social media - but particularly the likes of CNBC? If you assume that he's 'pumping' without any further insight, then we can assume that the others are too. You're active on the 'investments' sub-forum here - where traditional stocks/shares/investments are discussed. Can you link to a post where you've cited this sort of carry on in the traditional markets? If not, why not? Why does anything related to bitcoin get the treatment?

 

[WolfeTone]

So I withdraw my accusation that he pumped with an actual view to dumping

So not a pump-and-dump then, just a pump? A perfectly legitimate endeavour, investing one's own cash, or cash on behalf of others, into an asset on the premise that it will increase the value of the investment.

Anybody working on the latest formal announcement of Tesla would be totally dumb not to see the chance to make a quick buck on a totally predictable btc spike.

This is absolutely no different to anybody working anywhere with access to information not readily accessible to the public at large.

The critical element is the intent. If the intent is to temporarily drive up prices for the purposes of extracting a profit by then selling off holdings, in turn driving down the price, then you may have a case.
So, if the near future Tesla announce a cancellation of accepting bitcoin for its products and subsequently reveal it had offloaded its bitcoin before such a reversal, then I certainly would be sceptical of Musks intentions.

But as you have already admitted there is little to no evidence of Musk being engaged in such practices.

Here is a link, posted by Roubini, of actual charges being laid against individuals accused of crypto pump-and-dump.

CFTC pump-and-dump charges

The scheme allegedly involves touting various crypto assets while concealing their own held positions.
Amounts of $2m profit are alleged to have been made.
In the grand scheme of schemes, this is hardly the big fish that Roubini says is out there to catch?

 

[Duke of Marmalade]

This is absolutely no different to anybody working anywhere with access to information not readily accessible to the public at large.

You're completely missing my point. Insider trading is a complete no-no and when it comes to dealing in shares there is total transparency to expose such insider trading. With btc there is no such transparency, I thought that was one of its charms. There can be no question that most people in Tesla's accounting department and their friends an relatives filled there boots with this totally to be expected btc spike - they will never be found out.

 

[WolfeTone]

You're completely missing my point. Insider trading is a complete no-no and when it comes to dealing in shares there is total transparency to expose such insider trading

I think you are misconstruing the concept of insider trading.
In general parlance 'insider trading' is considered a no-no, because of the potential unfair advantage to those who hold valuable information, And the actual unfair advantage in cases of proven corruption.

But not all insider trading is illegal.
A company CEO who increases her shareholding in the company she operates, on (perceived) favourable commercial news, is perfectly entitled to do so as long as it is not hidden away from the public (assuming the purchase of stock by itself has made little material difference to the stock price ).
Is it insider trader (by corrupt practice) if the market perceives the CEO purchase of shares as favourable, in turn stock market speculators drive the price up?

A bank clerk processing increasing amounts of mortgage approvals may reasonably deduce that property prices may start to increase in the near future and act accordingly by buying his own buy-to-let apartment before the public is made aware of the increase of mortgage applications.
In both instances, this is insider trading, but it is not illegal.

For it to be illegal, there has to some proven intent to profit by corrupt means - deception, misleading information, non-compliance with regulatory requirements etc

There can be no question that most people in Tesla's accounting department and their friends an relatives filled there boots with this totally to be expected btc spike - they will never be found out.

I'm not sure if you are suggesting they filled their boots with Tesla stock or BTC, or both? I assume you mean BTC because of the "they will never be found out" reference?

I'm not convinced it is illegal at all, but as I referenced, if it is shown that Telsa have offloaded their BTC holding in advance of a reversal of their BTC trading position, then I think that would raise a red flag.

 

[tecate]

You're completely missing my point. Insider trading is a complete no-no and when it comes to dealing in shares there is total transparency to expose such insider trading. With btc there is no such transparency, I thought that was one of its charms. There can be no question that most people in Tesla's accounting department and their friends an relatives filled there boots with this totally to be expected btc spike - they will never be found out.

Wall Street wrote the book on insider trading! I notice that you conveniently ignored the two examples I provided you with. Here's the detail on Bill Ackman's 'Hell is Coming' interview - and the $2 billion he made by trading in the other direction.
Here's the detail on the congressional insider trading scandal from last year -> LINK.

How is there 'no transparency' re. bitcoin in what you're attempting to set out above? Walk us through it as if you are that person working in this 'accounting dept'.

 

[Duke of Marmalade]

@WolfeTone I guess you are right. Tesla staff using a bit of inside knowledge to make a few bob is no big deal. It amuses me ( my sense of humour) how the BTC community hang on Muskie’s every sneeze for self assurance. I guess that’s where Rocketman gets his kicks.
@tecate careful now. I got a right rollicking from a moderator for calling somebody a tr*ll. I myself am not a sensitive soul but I was warned it was akin to using the N word in these parts.

On a separate point, the logistics of corporate holdings of BTC seem very problematic. Who keeps the private keys of Tesla’s $2bn holding? What if they get run over by a bus? What if they transfer to themselves and get next flight to Brazil? Seems to me the centralised nature of conventional currency is a big advantage for corporates.

 

[tecate]

The logistics of corporate holdings of BTC seem very problematic. Who keeps the private keys of Tesla’s $2bn holding? What if they get run over by a bus? What if they transfer to themselves and get next flight to Brazil? Seems to me the centralised nature of conventional currency is a big advantage for corporates.

Dukey, you think that Gillian from accounts has the private key for Tesla's $1.5 billion + worth of bitcoin written down on a napkin?

Enterprise-grade crypto custodians include the likes of Coinbase Custody, Bitgo, Kingdom Trust, Gemini, Anchorage, Bakkt....

I guess you are right. Tesla staff using a bit of inside knowledge to make a few bob is no big deal.

No, Dukey - this is serious. I think that a fine upstanding citizen like yourself should contact the relevant authorities.

Report Suspected Securities Fraud or Wrongdoing


For expediency, here's the relevant evidence you've uncovered of that wrongdoing -> Dukey's Evidence

If you mark it 'because bitcoin', I'm sure they'll bump it up to the top of the pile and put their top forensic investigators on it.

 

[Duke of Marmalade]

Dukey, you think that Gillian from accounts has the private key for Tesla's $1.5 worth of bitcoin written down on a napkin?

Enterprise-grade crypto custodians include the likes of Coinbase Custody, Bitgo, Kingdom Trust, Gemini, Anchorage, Bakkt....

Okay, I do not want to get into the weeds of custody but it must be pretty hairy. What if the place burns down? Surely there isn't a single key for $2bn. Given the irreversibility of btc transfers the scope for fraud/skip to Brazil seems enormous.
Further exploration of these matters would bring us down a rabbit hole.

 

[tecate]

Okay, I do not want to get into the weeds of custody but it must be pretty hairy. What if the place burns down? Surely there isn't a single key for $2bn. Given the irreversibility of btc transfers the scope for fraud/skip to Brazil seems enormous.

Ok, so you're saying that Gillian from accounts does have the private key written on a napkin? I'd say you should mention that in your report to the SEC also.

Further exploration of these matters would bring us down a rabbit hole.

Absolutely - far better to have people believe that a corporate with a market cap of $600 billion has entrusted Gillian from accounts with the private key for $1.5billion+ of its digital assets. It makes for a far better narrative.

 

[Duke of Marmalade]

Ok, so you're saying that Gillian from accounts does have the private key written on a napkin? I'd say you should mention that in your report to the SEC also.
Absolutely - far better to have people believe that a corporate with a market cap of $600 billion has entrusted Gillian from accounts with the private key for $1.5billion+ of its digital assets. It makes for a far better narrative.

You have taken me up wrongly. I am not in my usual bashing btc mode. I am genuinely puzzled at the logistics of custody of mega corporate holdings. No way did I think George from the accounts dept has the private key. It was the opposite thought that had me wondering. Who are the select few who do have the private key? It would have to be a very select few indeed and they would have to be very careful not to travel on the same plane.
You have informed me that there are professional enterprises devoted to crypto custody. I would be thinking that they would have my key person problem, but I am prepared to accept that it all works like clockwork.

 

[DazedInPontoon]

There can be multiple wallets, they can be multi-sig wallets with up to at least 16 15 keys each (maybe more these days?) and any number of those required to sign transactions. Keys don't need to be stored by a person necessarily either, they could be stored in safe deposit boxes etc. They also don't all need to be kept by one organisation.

This provides a lot of possibilities. Since as tecate said there's an entire industry now purely about solving this issue, I'm sure they have sufficient solutions varying in the lengths they go to depending on how much you're storing.

 

[tecate]

No way did I think George from the accounts dept has the private key.

So it's not Gillian, it's George? The rascal. Damn, I do miss those watercooler moments in these covid-infested times.

It was the opposite thought that had me wondering. Who are the select few who do have the private key? It would have to be a very select few indeed and they would have to be very careful not to travel on the same plane.
You have informed me that there are professional enterprises devoted to crypto custody. I would be thinking that they would have my key person problem, but I am prepared to accept that it all works like clockwork.

I don't know the extent of it - but whilst 90% of folks use one single private key, there is a possibility within the bitcoin protocol to have a multi-signature arrangement. i.e. more than one key exists. You could need 2 of 3 keys for example to sign a transaction. Therefore if Gillian or George decides to run off to Brasil, they won't be able to - unless they get together...in which case i think multisig can be extended out as far as 8 of 15. Keys are kept in military grade facilities at undisclosed locations globally.

In the near future, I expect that multi-signature will be made more palatable for the ordinary joe - and this will go a long way to prevent fraud, lost funds, etc.

 

[Duke of Marmalade]

So it's not Gillian, it's George? The rascal. Damn, I do miss those watercooler moments in these covid-infested times.


I don't know the extent of it - but whilst 90% of folks use one single private key, there is a possibility within the bitcoin protocol to have a multi-signature arrangement. i.e. more than one key exists. You could need 2 of 3 keys for example to sign a transaction. Therefore if Gillian or George decides to run off to Brasil, they won't be able to - unless they get together...in which case i think multisig can be extended out as far as 8 of 15. Keys are kept in military grade facilities at undisclosed locations globally.

In the near future, I expect that multi-signature will be made more palatable for the ordinary joe - and this will go a long way to prevent fraud, lost funds, etc.

Yes of course, multi-sig. I should have known from my Antonopolous. Mystery solved.

 

[tecate]

Yes of course, multi-sig. I should have known from my Antonopolous. Mystery solved.

This is actually a neat feature of the protocol. As we know, there are millions of people who are not (or will not be) very comfortable with self custody. They will still need the support of banks, etc. So - in the future - I'd expect that banks can offer a scenario where 2 of 3 applies.
In this situation, the bank (or more likely an external custody specialist contracted by the bank) holds one key, you hold a second key - and the third key you could give to someone you trust.

The bank can't take your funds in the case of the bank failing or .gov want to carry out a bail-in. If you lose your key, you have another key holder and the bank to restore access. If you depart this world, there's means for your funds to be accessed via the bank and the third key holder.

 

[Duke of Marmalade]

This is actually a neat feature of the protocol. As we know, there are millions of people who are not (or will not be) very comfortable with self custody. They will still need the support of banks, etc. So - in the future - I'd expect that banks can offer a scenario where 2 of 3 applies.
In this situation, the bank (or more likely an external custody specialist contracted by the bank) holds one key, you hold a second key - and the third key you could give someone you trust.

The bank can't take your funds in the case of the bank failing or .gov want to carry out a bail-in. If you lose your key, you have another key holder and the bank to restore access. If you depart this world, there's means for your funds to be accessed via the bank and the third key holder.

Yes it will need something like that for large holdings. And it also means you don't need to be mega fussy about safeguarding your private key from others.

 

[DublinHead54]

Musks statement that he will keep the BTC received in BTC is just a marketing statement. Anybody with a bit of accounting knowledge would know that is not the way to manage a business, and I am sure his CFO is not planning that.

It may make sense in future when Teslas outgoings (salaries, material etc) can be paid for in BTC then it would make sense. As of now they still need $$$ to pay their staff and buy their materials so he may be forced to convert that BTC.

Interestingly this does open up opportunities for Wall Street / Investment Banking to offer derivative products for BTC / Fiat much like they do for global corporations with foreign currency receivables/outgoings via Cross Currency FX Swaps.

 

[tecate]

TIME recently interviewed Michael Saylor on his strategy utilising BTC on the corporate balance sheet to counteract the great monetary supply expansion.