One of strongest arguments for crypto is libertarian-dream idea of a store of value beyond govt seizure. But you need an onramp/offramp to convert to fiat, like Coinbase. Coinbase needs a relationship w a bank to offer that capability, & banks insist on KYC/AML to bank exchanges.
If you want to evade KYC/AML etc, you have to trade on dodgy unbanked crypto exchanges without such onramps/offramps (i.e. you can only trade crypto for other crypto). But you can't convert your crypto to fiat. And if you can't convert it to fiat, you can't access it/spend it.
KYC performed by banked crypto exchanges will link all your personal identification details to the public key, so authorities know exactly who owns the coins. And if they know that, they can in fact seize the coins via court order. They can regulate & require exchanges to comply.
The other thing that will happen is that regulators will likely eventually disallow banked, regulated exchanges, to import crypto across & trade crypto originating from unbanked, unregulated exchanges. When this happens, you won't ever be able to get your money out. Will be gone.
PS the blockchain also contains a perfect electronic record of every transaction ever made for each public key. If you're looking for anonymity, crypto is a very bad choice if crypto offramps all require KYC. If you're a criminal, cash remains the best option for anonymity & ML.

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More from @LT3000Lyall

18 Jan
A month or so ago, I expressed concern about what would happen if someone died from vaccine (i.e. we might shut down vaccination). I seriously misread this. It seems everyone wants to move past covid badly enough that we are prepared to largely ignore it.

nypost.com/2021/01/15/23-…
Norway has prioritized vaccinating the elderly first (something I tweeted earlier was probably a bad idea). 23 deaths from 30,000 shots. That's a fatality rate of about 0.08%. The overall covid fatality rate is about 0.5%, but higher amongst the oldest demographics.
It still makes sense to vaccinate, although it might make more sense to target herd immunity & avoid vaccinating the most frail. People don't understand statistics though & demonstrated that throughout covid. When you have a very large n, a lot of people will die from anything.
Read 5 tweets
17 Jan
Well worth a read. Tether is a "stablecoin" believed to be backed $-for-$ by USD. But Tether banks with a Barbados bank, and the amount of outstanding Tether exceeds Barbados' total Fx reserves, which hasn't risen in tandem. Tether is being used to buy Bitcoin & other crypto.
Tether's putative "USD reserves" haven't been audited. Tether is under investigation by US authorities & has failed to comply with court-ordered information requests.

The rapid inflation in the tether supply has likely contributed to the recent run-up in crypto "asset" prices.
This is not a sideshow. The majority of Bitcoin at the moment is being bought with Tether, not USD. It is more than a little ironic that it is not inflation in the USD money supply that is driving BTC up, but inflation in the "Tether" money supply - another cryptocurrency! 😂
Read 4 tweets
3 Jan
Crypto bulls seem to think being a very long term "store of value" is an important attribute of a currency. It's not and never has been.

The most important attribute/function of a currency is its exchange value being stable & predictable enough to facilitate trade & commerce.
The importance/desirability of these factors has nothing to do with govt monopoly. Humans have always organically chosen as currencies things which have stable/predictable medium term exchange value. In prison, cigarettes are often used. They hold their value long enough to work.
In countries with hyperinflation, you'll often see people abandon the local currency for foreign currencies like the USD/Euro. Merchants start to refuse local currency. Govt fiat "monopoly" does not guarantee acceptance. Ppl only accept it when its exchange value is predictable.
Read 4 tweets
3 Jan
As an investor it's important to be alert to your own biases, and seek out mechanisms to guard against them.

I largely share(d) Claire's view people should accept the trial safety data on covid vaccine & take. However, this tweet triggered an anti-bias warning for me <thread>
Claire responds to news 40% of front line healthcare workers are refusing the vaccine by assuming that they all must all be dumb or misinformed, because there is a 100% probability she is right. Even though I broadly agree with her, I don't think it's wise to respond this way.
Maybe they are all wrong. Or maybe you are suffering from a bias and they know something you don't. We are talking here about the people that are closest to the virus and have the most direct/personal experience with it, so we should be particularly alert to that possibility.
Read 12 tweets
30 Dec 20
A Bloomberg article today reported that human-run hedge funds trounced quants in 2020 - a turnaround from the experience of recent years. Renaissance Technologies - run by Jim Simons - saw its Institutional Diversified Alpha & Global Equities funds fall by 32% and 31% <continued>
The fundamental problem with computer/AI driven trading strats is - and always has been - that the models will never be capable of evaluating novel situations which have not happened before. This was undoing of LTCM, as well as port. insurance which caused 1987 stockmarket crash.
A global pandemic was not in the past datasets, so the bots don't know what to do. AI is only good where you have sizeable and complete datasets that can 'train' the AI to recognized statistical patterns too complex for humans to extract, and use it to make accurate predictions.
Read 11 tweets
29 Dec 20
Central bank asset purchases are actually little more than the de facto nationalization of private wealth.

If I could print money and use it to buy your house, I've basically stolen it. In theory CBs could use printed money to nationalize 100% of the economy/private wealth.
You'll often hear ppl say central bank buying is good for investors and increased wealth inequality. Nonsense. With asset purchases, income generating assets are confiscated and replaced with cash that generates nothing (-ve in EU). Investors as a class are left with less income.
The consequences of this are already starting to become apparent. Investors have less income generating assets left to fight over which drives up the price of everything. And pension funds etc are starved of income as the central bank is nationalizing income-generating bonds.
Read 4 tweets

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