BC BITCOIN
Saved by @SteveeRogerr

Ok, so what is the significance of the @lagarde statement on bitcoin?

We were offered a very open insight (but slightly flawed analysis) into top level policy perspective behind the crack down on selfhosted wallets.

https://t.co/1LTzrxHbgs 1/32

 'It is a speculative asset, by any account. If you look at the price movements... '

It starts with an economic price perspective and we can learn that ECB is closely monitoring this price movement as one of the many indicators.

So we are in the classic central bank frame 2/32
'Those who thought it would turn into a currency. Sorry, it is an asset not a currency.'

Here she summarises a classic debate on what is currency and what is needed for that. Based on the holy three: unit of account, means of payment, store of value. 3/32
The summary is classic, but too narrow and does not incorporate the wider financial history viewpoints on money, currencies and the way we pay. 4/32
ECB overlooks the de facto unit of account role of bitcoin, having been used to 200 years of having cash around whic is both the unit of account and a means of payment. 5/32
In this book Davies outlines that there are far more than 3 functions for money. He highlights differences between primitive money versus modern money.

https://t.co/UQzQtETM2E 6/32
'bitcoin fails as a currency', shows a limited perspective on currency.

History has also seen playing cards been used as a currency.
-> https://t.co/XLU3shkADk

And as a unit of account bitcoin may be much further ahead than @lagarde realises. 7/32
A Dutch example: trade and payments in Dutch history (17th century) were done in denominations of 'Flemish pounds' which did not exist in real life.

Bitcoin being used as a central currency/unit of account amids a range of other digital coins is quite similar. 8/32
The ECB-perspective is too narrow and thereby overlooks the role of bitcoin as an open source public good. This role significantly adds to its value, but not necessarily to its price.

See the thread here: https://t.co/XsirnRwO7N 9/32
Then @lagarde moves on:
'which has conducted some funny business'
'totally reprehensible money laundering activity'

Here, the narrow FATF-perspective comes into play. Because analytically, this statement is valid for cash, fiat currency and bank behaviour as well. 10/32
To me, this flags that we are about to hear news from the powerful anti-money laundering lobby.

Do note that this anti-money laundering perspective has some serious democratic and analytical errors.

See ->
https://t.co/7WpscAWD7I 11/32
'There has to be regulations and this has to be applied and agreed upon.'

It is flawed to dismiss this as a classic central bank argument, with them only having one flavour of icecream (regulation)

Society by definition regulates what if finds important and rightly so. 12/32
'Regulation needs to be done at a global level because if there is an escape, that escape will be used.'

Here the statement becomes interesting as it shows the desire to close the escape routes.

But are we talking AML-rules, stablo-coin rules, what is it ? 13/32
The regulatory process of setting rules via G7 - G20 and then enlarging them is mentioned and:
'FATF is clearly an organisation that has expanded in that respect'

So it sounds as a focus on money laundering regulations. And effectively the virtual asset work by the FAT. 14/32
So let's look at this FATF report on virtual assets and where there is a mention of escape routes. I guess in crypto-context this meens peer-2-peer then?

https://t.co/MFNOPuYAPj 15/32
The concern of regulators is thus the coexistence of forms of stablecoins and self-owned wallets (or in their terms: unhosted wallets, as not hosted by regulated institutions).

And do note: 'address risk in a forward looking manner', meaning anticipation by supervisors. 16/32
Next up the FATF-report highlights that peer-2-peer tools remain unregulated so far, but national authorities can of course choose to not register or license virtual asset players and couple this to the use of 'unhosted' wallets.

And this is what we start to be seeing. 17/32
Look at the situation in Switzerland where FINMA regulates libra/DIEM and the first additional non-coordinated rules came into play per august 2019.

Peer-2-peer wallets require verification of beneficiary !

https://t.co/3mji8RBmw7 18/32
The Dutch central bank - in september 2020 - suddenly required beneficiary verification and checking the ownership of selfhosted wallet as as a registration requirement.

Doing pro-actively what FATF suggested.

https://t.co/NeHZMrH1wv 19/32
The requirement all of a sudden hit the 38 companies that were registering as a virtual asset service provider. Issued 2 months before a registration deadline (close shop if unregistered).

A knife on the table.

https://t.co/v5KvSoFH91 20/32
Some 25 out of 38 registering companies were forced to comply and desired to know the formal basis of this rule. Central bank said: sanctions law, but it is not there.

So they wrote a joint letter on Nov 2.

https://t.co/wQJ9xG8oQu 21/32
The letter remains unanswered even today, 2 months later and 15 of the registering companies in the Netherlands were forced to comply with it.

https://t.co/Ur1l72AgXo 22/32
More specifically one of the Dutch crypto players has announced it will bring the last minute requirement before a judge, citing it's ineffectiveness, infringement on privacy and disproportionality. 23/32
Meanwhile in the US, things started to move as well. Coinbase was the first company to indicate that government sought to introduce beneficiary information and verification rules for selfhosted wallets.

https://t.co/OVDV5J7L3J 24/32
And then, just before Christmas, the FINCEN figured it would be a good idea to use a consultation period of 2 weeks, outlining the proposed rules. 25/32
In essence the same rules as FINMA and DNB, although slightly more risk based by the use of thresholds above which the rules apply.

https://t.co/AV5j1yqNWu 26/32
Despite the brief time and the holiday period 7500+ comments were being submitted to the FINCEN. Feel free to have a look here:

https://t.co/1mEaiUxlqH

More responses came in at the FINCEN than ever received before. 27/32
The comments raised fundamental concerns in terms of contents and due process. How can FINCEN limit the consultation period in this way?

https://t.co/ZiRS7zrlcF 28/32
A good thing is that FINCEN is indeed extending the consultation period now.

https://t.co/NKZixJlksK

But it becomes clear what is meant with 'address risk in a forward looking manner' 29/32
So, let's move slowly back to the speech of @Lagarde.

I think it gave us an open insight into the desire to make sure that no escape routes are present for bitcoin/crypto.

It tells us there is a strong FATF-inspired objective to crack down on selfhosted wallets. 30/32
I hope the FATF will take note of the many responses that have been sent to FINCEN and to the ongoing discussion that will become visible in the Netherlands.

My full FINCEN response:
https://t.co/OTMlwgVqHy 31/32
Indeed, when it comes to things/coins of value, regulation may be justified.

Still this must be proportional and within the bigger framework of human rights protection.

See European Data Protection Board ->
https://t.co/Y2dpZ1a5ux 32/32

More from Bitcoin

Yan Pritzker \U0001f9a2
Yan Pritzker 🦢...
@skwp
1/THREAD: WHEN WAS IT CLEAR?

Oct. 8, 2020: The purpose of this thread is to document and timestamp when it first became clear that #Bitcoin was likely to become a major reserve asset for public corporations, and eventually states, with Square's purchase of $50M in BTC.

The purpose is to give something to cite when ppl later claim "But there was NO WAY OF KNOWING..."

h/t @ErikSTownsend who used the same format to call out the impact of Covid on Feb 8 and made me personally aware of the looming shutdown of the country https://t.co/opuiNgSeqC !


Bitcoiners smarter than me have been predicting the takeover of the dollar by Bitcoin for many years.

In 2014 with Bitcoin barely at $1B, @pierre_rochard wrote https://t.co/EGHa58KqHq, covering all the incorrect narratives of Bitcoin and stating it will overtake the dollar.

"[skeptics] misunderstand how strong currencies like bitcoin overtake weak currencies like the dollar: it is through speculative attacks and currency crises caused by investors, not through the careful evaluation of tech journalists and 'mainstream consumers'" - @pierre_rochard

I first became bullish on Bitcoin in the summer of 2016, around a $3B market cap, but it was still a toy project at that time in the eyes of most in the financial world, while many technologists thought of it as a v1 technology to be improved on.
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balajis.com
balajis.com
@balajis
The defi matrix

As each asset class goes on-chain, it can be stored in a digital wallet. And it can be traded against other such assets. Not just cryptocurrencies, but national digital currencies, personal tokens, etc.

We’re about to enter an age of global monetary competition.

The defi matrix is the table of all pair wise trades. It’s the fiat/stablecoin pairs, the fiat/crypto pairs, the crypto/crypto pairs, and much more besides.

Uniswap-style automatic market making for everything. Every possession you have, constantly marked to market by ~2040.

More liquidity, less currency?

This is an interesting point. Cash doesn’t make you money. In fact, it can lose you money in an inflating environment.

Reliable, 24/7 mark-to-market on everything is hard — but if achieved, means less % of assets in cash.


AMMs boost BTC. Here's why.

- All assets trade against all assets in the defi matrix
- Automated market makers give liquidity for rare pairs
- Everything is marked-to-market 24/7
- Value of cash drops, as you can liquidate instantly
- The new no-op is to keep your assets in BTC

Basically, automated market makers like @Uniswap boost BTC in the long term, because they allow *everything* to be priced in BTC terms, and *anyone* to switch out of BTC into their asset of choice.

Though in practice this may mean WBTC/RenBTC [or ETH!] rather than BTC itself.
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Emin G\xfcn Sirer
Emin Gün Sirer
@el33th4xor
Another #FreeLoveFriday. So far, I’ve covered Bitcoin, Mastercoin/Omni, and last week ChainLink and the importance of decentralized oracles. Today, let’s talk about one of the most fascinating projects in crypto - @MakerDAO


In my thread about Mastercoin, I briefly touched on the vital role fiat-backed stablecoins play in crypto markets, but there’s a catch with them:

The counterparty risk of a third-party holding fiat in reserves.

Enter MakerDAO, which set out to create a decentralized, collateral-backed cryptocurrency, DAI, that would be “soft-pegged” to the U.S. Dollar using the power of algorithms. In crypto tradition, its supporters said trust game theory, not operators.

In 2017, MakerDAO published a whitepaper describing a system where anyone could create DAI by leveraging ETH as collateral to create Collateralized Debt Positions. Essentially, you take out a digital USD loan against your crypto.

The game theory of the system is structured such that DAI issuance is controlled to keep the price pegged to $1.00. In essence, it buffers the fluctuations of the underlying collateral to create a synthetic dollar bill.
BITCOIN
satoshi0x
satoshi0x
@MasterGrimaldi
The is no Devcoin Gold yet. But then again, we've never been one to "peg" to anything. I came across an interesting article about 'recreating' addresses with Bgold that @bitcoincoreorg cut out since 0.13.0 - perhaps one day we can do a similar thing in future Devcoin software :)


https://t.co/cv4UqsaVAK

That being said I hold some Doge @blockio in an "A-" address myself after 0. 1. "9-" versions :). Don't believe Bitcoin Core the Coin (Utility) is the only visible value on Core chain. Color me crazy. I believe in script. And FOSS that is used to export📜


And that's just a guy @MeniRosenfeld who put his identity and ideas out in the public to build a Web of Trust back when the web was much less of a safe place. His identity at stake and the implementation of a branch in source code by another unsung hero @killerstorm reveals value

Some of those who set up our bright future quietly implemented it in a branch on the main source code before it was officially the Bitcoin Core main repository, before a "Bitcoin Core" entity existed

Just because Bitcoin Core nodes dominate and do not read "smart" colored satoshis or display them, doesn't mean they do not exist on chain. The example of recreating P2WSH-over-P2SH address from BTC https://t.co/ZWSP2MO5bY wallets in Bitcoin Core Gold I shared proves -rescan's $
BITCOIN
Meltem Demirors
Meltem Demirors
@Melt_Dem
1/ #Bitcoin FUD-busting time!

claim: bitcoin ownership is heavily concentrated.

@business published an article claiming "2% of accounts control 95% of all Bitcoin" 🤣

truth: the facts, my friends, simple don't line up. let's dive in!

2/ interrogating on-chain addresses is tricky.

address =/ account.

one person can control multiple addresses.

one address can hold bitcoin belonging to multiple ppl.

exchanges and trading firms will have addresses with large balances that represent client funds.

3/ the fine folks @glassnode published an excellent analysis of on-chain address balances in January

the ownership distribution of bitcoin among wallets is actually much more diverse than one might expect.

full piece here:
https://t.co/n5IdIQdNoA


4/ 31% of BTC is held in addresses not identified as exchange wallets.

these are likely institutions, funds, custodians, and OTC desks.

our analysis at @CoinSharesCo indicates >15% of all bitcoin is held in third party custody, including @coinbase and our own @KomainuCustody

5/ in fact, between asset managers @Grayscale ($36B in BTC) and our @xbtprovider ($4B in BTC), 4% of bitcoin is locked up by fund providers and asset managers!

our @CoinSharesCo research team publishes an EXCELLENT weekly report on fund flows and AUMs -
BITCOIN

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