Is it too soon to talk about Crypto yet?

[quicksandfarmer]

I agree, but it is still a mess to unwind. The ChatGPD image thingy gave a quick overview (but uses ETH for its smart contracts example, sigh). That said, compared to an investment account needed to buy real estate investment trusts, a free wallet is a MUCH lower barrier to entry. Also RE is a bit of a diversion to the glorious ascendancy that crypto shall have our lives, which is of course, is the main thrust of this thread.

Blockchain makes sense when you can't have, or don't want to have, a central authority keeping records. That's why it doesn't make sense for real estate.

And that's why it's a spectacularly bad idea for a national currency. You want to have someone actively managing your money supply. Central banks aren't perfect by any stretch, they're human and make mistakes all the time, but they are so far superior to anything that preceded them that's there's no comparison. In particular they are vastly superior to a fixed money supply, which is what crypto represents and what was the dominant model before central banking, in the form of currency based on precious metals. In the 19th century it was a regular feature to have financial "panics" roughly every ten years, you'd see 20+% inflation one year and 20+% deflation the next as the economy whipsawed.

Central banking was one of the innovations that made the 20th century possible -- the Federal Reserve was created in 1913, other countries formed central banks around the same time. The 20th century was the greatest period in the history of humanity for creation of wealth, scientific advancement, technological achievement, extension of lifespan. We learned to fly, cracked the atom, went into space, sequenced DNA, invented the computer and cured diseases that had plagued mankind forever. Central banking helped make that possible.

 

[quicksandfarmer]

In the scenario you outlined, the onus of verifying the identity of the seller is on the title company. They're issuing title insurance, if the seller isn't who they say they are they have to make everyone else whole.

You haven't addressed how with blockchain you address the issue of ownership changing through outside events like inheritance, divorce, bankruptcy and foreclosure.

Fractional ownership of real estate is already possible, that's what a real estate investment trust (REIT) is. Changing how ownership is recorded won't change anything about how they operate.

You also haven't addressed why blockchain would in any way be better than just issuing a passcode to every property owner.

 

[quicksandfarmer]

Any investment is speculative. When an investment isn't backed by a claim on underlying assets or income streams, it is purely speculative. With purely speculative investment, your entire upside is finding someone willing to pay more for the asset than you paid, a "greater fool" in the parlance of investing.

Crypto is a purely speculative investment, there are no underlying assets or income streams. When you hear people talking about a national or state bitcoin reserve, or a crypto reserve, what they are really talking about is making the federal or state government the greater fool. Keep that in mind.

 

[Snobdds]

Microstrategy is a ponzi...proof below.

 

[quicksandfarmer]

Microstrategy is a ponzi...proof below.

View attachment 3181920

That is the very definition of a Ponzi scheme: using new investors to pay off old investors.

 

[Snobdds]

That is the very definition of a Ponzi scheme: using new investors to pay off old investors.

The bitcoin maxi's are undeterred.

Saylor's proposition: Give me $85, I promise to pay $10 a year in dividends. Since I have no money and can't pay, I'll pay additional interest on the missed payments, all the way up to $18. If I have money, I'll redeem the $85 shares for $100 but don't hold your breath.

 

[rumwrks]

Microstrategy is a ponzi...proof below.

This is what happens when you don't throw criminals like that in jail the first time they do it. How Microstrategy managed to survive his 2000 scamming and he somehow walked away with a slap on the wrist is as much a strong of indictment of our lax security laws as anything.

 

[MinnesotaEric]

Even as the reoccurring poisoning of the well conversation continues (see above), we're continuing to have telegraphed where an entire market segment is heading.

To wit, when we get domestic stablecoin and market structure legislation, you'll begin to see the ground shift under your feet when Microsoft, Google, Apple, and other tech companies start adding crypto wallets to their software opening up crypto markets to 3 billion people to avoid credit processing fees.

https://twitter.com/x/status/1907049766325788907

The explosive growth of crypto exposure to more and more people will take place even as the broader market likely will continue to risk-off as the velocity of commerce slows from our government slowing its spending and private enterprise relocating or changing their manufacturing structure to avoid political and tariff risks. But as soon as market structure legislation is enacted, yield products will be made available for crypto holders. For example: large domestic banks need to retain around $0.12 in liquid assets for every dollar they lend out. But when stablecoins and crypto enter into the system, huge amounts of assets can leave at any time during the day or week potentially leaving the bank over-leveraged and other banks with significant counter-party risk (think Lehman Brothers in 2008). As such, banks will begin offering yield products to entice investors to keep their Bitcoin and other crypto at the bank governed under smart contracts (which makes the Bitcoin and Cardano tie-in, super, super cool). We're also likely to see our big banks firing up their own nodes so their crypto assets remain liquid and this additional computing power will further strengthen and secure crypto networks. And this will all be done apart from companies keeping Bitcoin on their books and national treasuries warehousing Bitcoin to bolster the value of their fiat currencies.

 

[quicksandfarmer]

Blockchain makes sense when you can't have, or don't want to have, a central authority keeping records. That's why it doesn't make sense for real estate.

And that's why it's a spectacularly bad idea for a national currency. You want to have someone actively managing your money supply. Central banks aren't perfect by any stretch, they're human and make mistakes all the time, but they are so far superior to anything that preceded them that's there's no comparison. In particular they are vastly superior to a fixed money supply, which is what crypto represents and what was the dominant model before central banking, in the form of currency based on precious metals. In the 19th century it was a regular feature to have financial "panics" roughly every ten years, you'd see 20+% inflation one year and 20+% deflation the next as the economy whipsawed.

Central banking was one of the innovations that made the 20th century possible -- the Federal Reserve was created in 1913, other countries formed central banks around the same time. The 20th century was the greatest period in the history of humanity for creation of wealth, scientific advancement, technological achievement, extension of lifespan. We learned to fly, cracked the atom, went into space, sequenced DNA, invented the computer and cured diseases that had plagued mankind forever. Central banking helped make that possible.

I learned today that between 1900 and the creation of the Federal Reserve in 1913 there were five recessions.

 

[MinnesotaEric]

I learned today that between 1900 and the creation of the Federal Reserve in 1913 there were five recessions.

The issue with fractional reserve currency systems is that they inflate the volume of money, ultimately decreasing each unit of the money's system's buying power.

With that said, my personal view is this:

The Federal Reserve is not part of our government. The Federal Reserve is considered to be independent from our government—meaning it's not a part of the executive or legislative branches, and its monetary policy decisions are not subject to political interference—though it is ultimately accountable to Congress. The Federal Reserve is a privately-owned bank whose officers and policy are subject to public oversight and has a mandate to return any profits over 6% back to the Treasury which is part of our government.

Here is a survey of the history of the Federal Reserve. History of the Federal Reserve

Fractional Reserve currency systems operating under central banks will eventually lead to central bankers themselves needing to be bailed out by a central bank. Bitcoin as a store of value IS effectively that central bank.

Again, Money as Debt is a brilliant explanation of the world's modern fiat currency system.