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https://bitcoinhackers.org/@fnietom Profile picture
https://bitcoinhackers.org/@fnietom
@fnietom
A developer learning monetary theory.
Oct 15, 2022 • 10 tweets • 3 min read
There is a thesis about how bitcoin value can stabilize in the long term, and have a growth similar to the rate of productivity growth, allowing it to become a global money. Like an improved version of the Gold Standard.

Let's go through some relevant concepts in a thread. 1/10 Aggregate output (Y) is the sum of all the goods and services produced in an economy over a certain period of time. GDP is its most commonly reported measure. 2/10
Mar 10, 2022 • 5 tweets • 2 min read
This misses a crucial point, namely that bitcoin's value mainly derives from resisting censorship. If you do not demand censorship-resistance and you do not want to bet on the rise of such demand, you have no reason to demand bitcoin. 1/5 Bitcoin is often assimilated to money, but it has very different properties. Unlike money, it is a relatively illiquid medium of exchange, not demanded by most people —due to the volatility inherent to its deterministic supply— and hence not convenient for regular payments. 2/5
Jul 15, 2021 • 18 tweets • 7 min read
1/ Merge-mining (MM) is based on the idea that having a commitment to alternative chain (AC) transactions buried under a greater amount of PoW will make them more secure. bitcointalk.org/index.php?topi… 2/ But no Bitcoin blocks need to be reorged in order to reorg a merge-mined chain. It will suffice that Bitcoin miners find a greater incentive to reorg that chain than the worth of the AC rewards they would otherwise earn.
Jun 21, 2021 • 9 tweets • 3 min read
1/ I just found about @nntaleb's new (draft) paper on bitcoin. It is reveals how easy is to miss the whole point of bitcoin even if you get to understand some of the most complex features of it. docdroid.net/1aMGDoN/bitcoi… 2/ I agree price appreciation implies volatility and volatility prevents is from becoming a "currency without government". Not sure what "BTC Capitalization Volatility" has to do with this, though. Or how he boldly jumps from there to set a zero target price.
Jun 17, 2020 • 4 tweets • 3 min read
@Mario_Gibney 5. Tokens are not incentive compatible with the native coin. So the greater their relative value the more conflicts of interest, detrimental to the value of the native coin, you can expect. @Mario_Gibney 6. Altcoins like ether are pseudo-liabilities, not a real asset like bitcoin, as most of their value depends on a few guys delivering on their promises of future features not yet implemented and their governance (e.g. arbitrary emission changes).
Jun 13, 2020 • 6 tweets • 2 min read
Reflections on mediums of indirect exchange.

1/ USD depreciates ~5% annually (productivity growth + CPI). Thus, investments with a risk-adjusted return lower than 5% in USD represent an erosion of your wealth and are only viable due to the lack of a SoV with no friction. Image 2/ Financial assets could potentially achieve nearly zero friction but, having no trust-minimized competitor better than gold (~2% annual erosion) and being vulnerable to state coercion, they hardly achieve erosions lower than 2% (i.e. >3% risk-adjusted nominal returns). Image
Apr 24, 2019 • 4 tweets • 1 min read
How valuable is Bitcoin's trust minimization versus Ethereum's?

You don't need to guess, market is already pricing the difference between their convenience yield:
- ETH futures trade in contango (more expensive than coins in self-custody).
- BTC futures trade in backwardation. There are multiple reasons to sell BTC futures, pushing their price down:
- Hedging future mining revenues.
- Hedging investments, avoiding to realize accumulated profits.
- Hedging price risk (volatility) if you are just interested in the trust-minimization Bitcoin provides.
Apr 19, 2018 • 4 tweets • 3 min read
On July 18, 2010 ArtForz started mining bitcoin with GPU, reducing drastically the reward for the rest of the miners. The result was pretty interesting: instead of putting them out of business, the price jumped 10x to fully compensate the new difficulty. ofnumbers.com/2014/04/20/how… The subjective theory of value states that the value of a good is determined by the importance an acting individual places on it. ArtForz was not selling, so he restricted the offer forcing buyers to reconsider the subjective value of bitcoin and buy at CPU miners price.