Talked to a buddy whose Fintech lending firm is being "disintermediated" by crypto

The innovation turns out to be paying retail 10% for demand deposits, then lending (long term) to third world Fintechs at low teens APYs, guaranteeing credit losses

Oh, and the lending is unsecured, lol

And the borrowing is done through a securitization structure

But there is no indenture (and no collateral)

And the protocol is governed by an illiquid governance token that can be attacked

So it's a CDO, but it makes 2006-era mortgage securitizations look like T-bills

Read 9 tweets

Bachman

@ElonBachman

3 Dec 21

1\ Email to a friend explaining why cryptocurrencies will make his finance business worse, not better

2\ Crypto transactions only seem cheap and efficient if you do them dangerously

If you do them safely, they're a pain in the ass

3\ Traditional finance enjoys economies of scale from centralized enforcement and dispute resolution

Crypto bulls say you *get* to "be your own bank", but in reality you *have* to be your own bank, which is a nightmare

Read 4 tweets

Bachman

@ElonBachman

30 Nov 21

The open villainization of white men is pretty funny

From a new Twitter policy:

I even catch myself doing it, because it's such an effective rhetorical device when debating bugmen

E.g. I'll say something like "You should support fossil fuels because they are lifting minorities out of poverty", and this framing actually works on the bugman

I suppose the immediate effect of Twitter's new ban on public photos will be selective blackout of things like retail flashmob robberies and Antifa riots

Read 5 tweets

Bachman

@ElonBachman

13 Nov 21

1\ It's a mistake to fight Woke totalitarianism with a toolkit of civil rights

The temptation is to say "Look, once upon a time we were all committed to the logic of equal rights, and by that logic XYZ policy is barbaric, so let's abandon it"

This is backwards...

2\ A framework that enshrines individual liberties is a fragile and unnatural thing

It's a sort of acme performance that can only be sustained by a community that already knows who it is and what its values are

It's historically bizarre. It's precarious.

3\ The problem is not that we let this baroque spinning orrery get slightly out of true, and the solution is not to have a stern judge nudge it gently back into alignment

The problem is that you can't build ornate rights structures on top of multi-culturalism

Read 5 tweets

Bachman

@ElonBachman

6 Nov 21

1\ I woke up choosing violence today, so here is a thread on why crypto is *provably* broken, and why 13 years after the Bitcoin white paper, crypto's only real world uses are a few loopholes awaiting regulatory closure

2\ The issue is that "fair exchange" (you get what you want, I get what I want, and neither of us reveals our identity) is provably impossible without a trusted intermediary

(yes I know about atomic swaps, but what we care about is exchanges between crypto and physical goods)

3\ For some reason this class of impossibility theorems seems not to have a punchy name like "Byzantine Fault Tolerance"

But it's a big literature, and you can find tons of papers on it:

Read 9 tweets

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