MicroStrategy buys BTC with abandon, Tether hits $20B, MassMutual jumps in game(amycastor.com)
amycastor.com
MicroStrategy buys BTC with abandon, Tether hits $20B, MassMutual jumps in game
https://amycastor.com/2020/12/14/news-michael-saylor-buys-bitcoin-with-abandon-tether-reaches-20b-massmutual-jumps-on-btc-bandwagon/
16 comments
> $112B spent
But what does "spent" mean? It means that money goes to miners, equipment manufacturers, etc. all of whom then go and spend that money living their lives. Since people aren't just fungible economic units, you can't just stop spending this money without actually incurring a much bigger debt in terms of actual societal impact from having a whole industry out of work....
But what does "spent" mean? It means that money goes to miners, equipment manufacturers, etc. all of whom then go and spend that money living their lives. Since people aren't just fungible economic units, you can't just stop spending this money without actually incurring a much bigger debt in terms of actual societal impact from having a whole industry out of work....
>The Triad uses those USDT to buy BTC and other cryptos from other Bitfinex clients, attracted by the better price.
Is there evidence of this happening? I compared the prices for BTCUSD ("real" USD) vs BTCUSDT (tethers) across several exchanges and the average of the two are within pennies of each other. That said, you really don't need to offer better prices for this to work. All you'd need to do is skim a certain % of the sell volume for yourself, or trade your tethers directly for USD: https://trade.kraken.com/charts/KRAKEN:USDT-USD
>Bitcoin’s right-libertarian anarcho-capitalism fits right in with far-right extremism. Crypto analyst Tone Vays brags on Twitter about spending a night with the Proud Boys.
This seems a bit... inflammatory. A single instance of a "crypto analyst" being affiliated with the Proud Boys means the whole community/movement "fits right in with far-right extremism"?
Is there evidence of this happening? I compared the prices for BTCUSD ("real" USD) vs BTCUSDT (tethers) across several exchanges and the average of the two are within pennies of each other. That said, you really don't need to offer better prices for this to work. All you'd need to do is skim a certain % of the sell volume for yourself, or trade your tethers directly for USD: https://trade.kraken.com/charts/KRAKEN:USDT-USD
>Bitcoin’s right-libertarian anarcho-capitalism fits right in with far-right extremism. Crypto analyst Tone Vays brags on Twitter about spending a night with the Proud Boys.
This seems a bit... inflammatory. A single instance of a "crypto analyst" being affiliated with the Proud Boys means the whole community/movement "fits right in with far-right extremism"?
Not only that, but if Tether's market cap is $20B and their trading volume is $30B to $70B per day, then they completely turn over their entire market cap more than 10 times per week.
To buy 10x your market cap per week, you also need to sell 10x your market cap per week.
It's not a one-way street, there's just as much selling as buying. Traders are well informed. Everyone has known the accusations for years, yet Tether maintains it's $1.00 peg.
Let's say for the sake of argument that Tether itself announces that they're only 50% collateralized. Do you think traders would suddenly stop using USDT?
To buy 10x your market cap per week, you also need to sell 10x your market cap per week.
It's not a one-way street, there's just as much selling as buying. Traders are well informed. Everyone has known the accusations for years, yet Tether maintains it's $1.00 peg.
Let's say for the sake of argument that Tether itself announces that they're only 50% collateralized. Do you think traders would suddenly stop using USDT?
> Finally, in April 2019, Tether admitted it was only 74% backed. And that’s before it went off and printed another 17.5 billion tethers. So what’s backing all those?
So 7/8 of tethers have been printed in the last ~20 months? Is there any reason to think they've increased their cash holdings by anything like $17.5b in that time? They claim to have increased it from $1.85b to something close to $20b since April 2019?
So 7/8 of tethers have been printed in the last ~20 months? Is there any reason to think they've increased their cash holdings by anything like $17.5b in that time? They claim to have increased it from $1.85b to something close to $20b since April 2019?
Tether skeptics always point to this, and then say even that 74% wasn't all in cash, a lot of it was in Bitcoin.
If that's true, and it Bitcoin has tripled since then, doesn't that mean they could be over-collateralized now?
I don't mean to defend Tether here because I don't have evidence either way, but the skeptics would be more believable if they followed their own accusations to their logical conclusions.
If that's true, and it Bitcoin has tripled since then, doesn't that mean they could be over-collateralized now?
I don't mean to defend Tether here because I don't have evidence either way, but the skeptics would be more believable if they followed their own accusations to their logical conclusions.
To be honest I don't really know enough about their model to follow it to its logical conclusions - I'm just a bit skeptical of any non-audited company that claims to have 11x its cash on hand in 20 months.
I didn't know that people say some of the apparent cash was in Bitcoin, I was assuming that 74% was all in cash. Even if we assume the entire $1.85b all in bitcoin though, the tripled price only takes you to ~6b. And they've apparently now put out 8x as many tether, which means they (if I understand correctly) claim to have 8x as much cash/assets on hand. I don't understand how Bitcoin holdings would cover that increase, and I even less understand how anything they could claim was cash could.
To be honest I just don't get the model, which is why I'm not making any claims or trying to follow it to a logical conclusion. I just don't get why they can't prove they hold ~$20b in ~cash if the entire point of tether is that they do so.
I didn't know that people say some of the apparent cash was in Bitcoin, I was assuming that 74% was all in cash. Even if we assume the entire $1.85b all in bitcoin though, the tripled price only takes you to ~6b. And they've apparently now put out 8x as many tether, which means they (if I understand correctly) claim to have 8x as much cash/assets on hand. I don't understand how Bitcoin holdings would cover that increase, and I even less understand how anything they could claim was cash could.
To be honest I just don't get the model, which is why I'm not making any claims or trying to follow it to a logical conclusion. I just don't get why they can't prove they hold ~$20b in ~cash if the entire point of tether is that they do so.
Once we achieve quantum supremacy, is it still impossibly hard to break the private keys?
Could a state actor or motivated rich person burn $10M or $100M to steal the biggest wallet?
A thief might not even profit directly from the theft, but rather shorting crypto.
Could a state actor or motivated rich person burn $10M or $100M to steal the biggest wallet?
A thief might not even profit directly from the theft, but rather shorting crypto.
> Once we achieve quantum supremacy, is it still impossibly hard to break the private keys?
Yes, because there are mitigations in place (since day one I believe). When you send bitcoin to an address, you don't send to a public key, you send to a hash of a public key. It's only when you need to spend the coins that you need to disclose the public key. According to wikipedia hash functions are considered safe against attacks against quantum computers[1] so any coins stored in addresses that haven't been spent from before should be safe. There's still potentially a window of vulnerability between when a transaction is broadcast and when it's confirmed, but I doubt quantum computers offer enough of a speed-up that it can crack a 256 bit secp256k1 key within an hour or two.
[1] https://en.wikipedia.org/wiki/Post-quantum_cryptography
Yes, because there are mitigations in place (since day one I believe). When you send bitcoin to an address, you don't send to a public key, you send to a hash of a public key. It's only when you need to spend the coins that you need to disclose the public key. According to wikipedia hash functions are considered safe against attacks against quantum computers[1] so any coins stored in addresses that haven't been spent from before should be safe. There's still potentially a window of vulnerability between when a transaction is broadcast and when it's confirmed, but I doubt quantum computers offer enough of a speed-up that it can crack a 256 bit secp256k1 key within an hour or two.
[1] https://en.wikipedia.org/wiki/Post-quantum_cryptography
There are millions of bitcoins in outputs with known public keys, either from older P2PK, or from address re-use.
> Once we achieve quantum supremacy, is it still impossibly hard to break the private keys?
The only actually-working-worth-a-damn quantum tech is annealing, which won't run Shor's algorithm. All the rest of the NISQ work for gate-model quantum computing is limited to less than a hundred qubits so far and with the "logical qubit" error correcting requirements, it's going to take millions of those qubits before we can get to breaking RSA keys of any length used in the last decade.
I wouldn't worry about this one anytime soon.
> Could a state actor or motivated rich person burn $10M or $100M to steal the biggest wallet?
You could burn $100M on a moonshot to steal it with no guarantee of success. It's almost like trying to win the lottery by buying a ton of tickets, except the space of all possible options is bigger. Lotteries are something like 300 million combinations; 2048 bit RSA is something like a 600+ digit number, though your cost per play is obviously lower and you can iterate quickly.
You wouldn't want to go after just one wallet, of course; you'd probably want to have a big battery of large wallets to test each combination against. Still, doesn't raise your chances by much. If you have a 10 million core supercomputer and you can test, say, 100 million combinations per second, you're still looking at a 600-digit number of years to work your way through it.
The only actually-working-worth-a-damn quantum tech is annealing, which won't run Shor's algorithm. All the rest of the NISQ work for gate-model quantum computing is limited to less than a hundred qubits so far and with the "logical qubit" error correcting requirements, it's going to take millions of those qubits before we can get to breaking RSA keys of any length used in the last decade.
I wouldn't worry about this one anytime soon.
> Could a state actor or motivated rich person burn $10M or $100M to steal the biggest wallet?
You could burn $100M on a moonshot to steal it with no guarantee of success. It's almost like trying to win the lottery by buying a ton of tickets, except the space of all possible options is bigger. Lotteries are something like 300 million combinations; 2048 bit RSA is something like a 600+ digit number, though your cost per play is obviously lower and you can iterate quickly.
You wouldn't want to go after just one wallet, of course; you'd probably want to have a big battery of large wallets to test each combination against. Still, doesn't raise your chances by much. If you have a 10 million core supercomputer and you can test, say, 100 million combinations per second, you're still looking at a 600-digit number of years to work your way through it.
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I don't think you'd need to target specific wallets, you'd probably just generate a ton of keys and match them against any known wallets.
As of today there are 68,446,700 unspent transaction outputs. Meanwhile there are approximately 2^256 possible private keys, so testing against any known wallets doesn't achieve any meaningful increase in your odds.
It’s possible... but I think someone will just use a 50 dollar handgun to achieve the same.
If one was to set this up to short bitcoin and/or destroy trust, stealing is not the point.
The point is to prove you can do it to even the most secure wallets remotely without ever interacting with another human.
If it happened, nobody with bitcoin holdings valued over the opportunity cost of breaking the crypto would be safe.
The point is to prove you can do it to even the most secure wallets remotely without ever interacting with another human.
If it happened, nobody with bitcoin holdings valued over the opportunity cost of breaking the crypto would be safe.
It would probably usher in a protracted bear market, but I think bitcoin has proven its raison d'être. There will always a be a market (and a non-zero price) for it, and given current trends in fiat money management the price would recover eventually.
> The $100 million cash injection into bitcoin sounds like a lot, but it’s small potatoes. That money will cover the network’s operators—the bitcoin miners—for only six days.
Missing context. The average economic cost of production for an ounce of gold is in the ballpark of $1000, and with annual new supply of about 3500 tonnes that adds up to about $112B spent digging an inert shiny metal out of the ground. I'm not going to attempt to quantify the costs of storing and transacting gold; suffice to say that it's inefficient and expensive.