The Tether announcement of a US based stablecoin yesterday is highly consequential

This is the beginning of a onshore and offshore market for stablecoins

and it will give #bitcoin a major competitive advantage over the long term:

Thread (1/n) There are now two different versions of Tether:
- Offshore (USDT)
- US onshore (USAT)

What's the difference?

#bitcoin is going to infect the reserves of stablecoins market until fiat is dead

A thread on the next 10 years (1/n) Today, #bitcoin is less than 5% of the stablecoin reserve market when looking at Tether

Tether has to make a choice now that the GENIUS Act will restrict stablecoins from using non-US-government-short-duration-debt for reserves in 18 months

This year everything changed for banks and #bitcoin in the US

@epochvc_ wrote a 100 page report on bitcoin adoption by banks with the former CTO of Silvergate @D_CentralBanker

It is the first comprehensive and technical resource on the topic

Summary and link in comments: To banks, #bitcoin is the new central bank that will gradually capture correspondent activity overtime

What is #Bitcoin backed by?

It’s likely not what you think because most people are asking the wrong question

Thread 1/n People often say: “that can’t be money it isn’t backed by anything”

This is an old way of thinking that originated with paper money.

Prior to paper money, people used precious metal coins (such as gold) because they maintained strong monetary properties:

A thread on why the price of #bitcoin keeps going up

(1/N) WOW it's the most scarce asset in the world

I’m launching a #bitcoin ecosystem VC fund and wrote a 32 page document on it

Why not just invest in #bitcoin instead?

Bitcoin Marginalism is why #Bitcoin needs an entire ecosystem around it to successfully become a neutral and global monetary system

Without this it will just be digital gold

Bitcoin Marginalism is our theory of value and why we see bitcoin ecosystem growth as a necessity

How is #bitcoin going to scale?

The same way all other monetary systems have

Except that this time we have cryptography on our side

Thread 1/n will it be trustless?

barring a 0 to 1 innovation - no

all scaling solutions are optimizing for fundamental tradeoffs

but we will be able to remove a lot of "mal-trust" in the same way we will remove "mal-investment"

Problem: we don't know how #bitcoin will be private, used for payments, or even be stored...

At scale

I spent the past year digging into these questions with various emerging protocols like @fedimint, @CashuBTC, LN, and Ark

The system is irreducibly complex which means (1/n):

https://twitter.com/axiombtc/status/1721630893083635832

Many pieces need to be in place for the system to function and if some are missing it's value is hindered

Like a car with only three wheels

But this permissionless P2P system will take #bitcoin far beyond just being digital gold

It will become a global unit of account

Adoption is good for bitcoin – but can it be bad?

What drives the price of bitcoin upward today may limit price appreciation tomorrow.

Is there a different market cap for bitcoin if it was 100% custodial vs. 100% non-custodial?

A thread on adoption that's bad for #bitcoin Depending on HOW bitcoin is adopted will ultimately determine whether bitcoin becomes a neutral global monetary system, digital gold, or somewhere in between.

If bitcoin is used as the base protocol for a global monetary system, it will have achieved its full market potential

Will fractional reserve banking inevitably emerge natively in #bitcoin?

If it does wouldn’t we just be recreating the fiat system?

It's likely not what you think bc digitally native #bitcoin banks will be fundamentally different than tradfi banks:

(1/X)
yakes.io/bitcoin-bankin… People often fall into extreme camps between: (1) we need a full reserve system and fractional reserve is fraud or (2) fractional reserve systems are inevitable and will eventually recreate the fiat system

The answer is somewhere in the middle - both are likely to exist.

The Luna/Celsius “bank runs” are a product of reckless financialization within the digital asset industry w/ more to come as the contagion spreads.

Is financialization bad for #Bitcoin?

While financialization has inherent risk, it’s necessary for a financial system 🧵(1/n): I believe much of current “CeFi” and “Defi” is far from what will exist in the future

Many of the current companies/experiments/ponzis/scams are a product of market exuberance

Bitcoin began during a recession & has grown aside unprecedented monetary stimulus for over a decade

What is #Bitcoin backed by?

It’s likely not what you think because most people are asking the wrong question

Thread 1/n People often say: “that can’t be money it isn’t backed by anything”

This is an old way of thinking that originated with paper money.

Prior to paper money, people used precious metal coins (such as gold) because they maintained strong monetary properties: