The BitMEX crypto derivatives exchange publishes research on Bitcoin's history, Tether, mining, and its own engineering.
HN commenters call its articles phenomenally detailed, particularly on Tether, and cite it for explaining market mechanics; one thread is a job posting.
See: "Where do the Yields come from in Crypto"[0]
It is no secret that in a crypto asset bull market, people are "shorting" fiat to leverage long rising crypto assets. Additionally, just by virtue of overall liquidity entering the space longing assets there is demand for speculation and transaction volume, thus demand for fiat, across the space.
Various protocols on ETH are providing decentralized trading (Automated Market Makers), as well as other financial primitives like lending and borrowing.
So... yields accrue to those who supply fiat liquidity to borrowers (who yes, are speculating on crypto assets; "shorting" dollars). They also accrue to suppliers of liquidity to AMM's in the form of transaction fees to the various protocols. So, "monetary velocity" is high in DeFi and crypto now, so yields go to those enabling it.
When bear market comes, it is almost certain the double digit fiat yields will decline. But will they still be higher than pitiful bank and sovereign bond yields? Maybe. Also at that point perhaps lending crypto assets to those "shorting" ETH/BTC and longing fiat will mean decent yields on that side of the trade.
Ultimately these decentralized DeFi protocols are cutting vast layers of middle men where traditional banks and monopoly players take huge cuts of the overall economic value and velocity[1]. Instead of NASDAQ or Goldman Sachs or whoever to take a tiny cut of transaction fees from financial transactions, you do by supplying liquidity to…
To answer my own question: quoting https://blog.bitmex.com/walkaway/
> "Brokers must post margin with the Depository Trust & Clearing Corporation and National Securities Clearing Corporation at the end of each day to ensure enough funds are reserved to cover any trading losses."
> The “meme” stonks’ volatility skyrocketed, which meant that the clearing organisations could ask for more collateral from brokers on the grounds of needing to protect themselves from additional potential risk when settling the brokers’ trades. It takes two business days to settle stocks in the so-called digital age…
> Robinhood in particular was told to come up with $4 billion, or they would not be able to facilitate any trading the following day. RH, apparently not having that much cash on-hand, said, “how about we stop trading or severely curtail trading in the stocks that are causing PAIN to various masters of the universe?” The clearing houses said, “OK, in that case, you would only need to post $700 million.” RH agreed to that figure, rushed to raise more money from the Street and/or Silicon Valley, and then subsequently shut off trading on Jan 28th and into the weekend. (This is information gleaned from an interview the CEO of RH gave to Elon Musk on Clubhouse).
So, it's the clearing houses that strongarmed shutting down the trading.
Crypto currencies don’t provide anonymity.
It’s pretty easy to make bitcoin transactions anonymous.
1. Wasabi Wallet runs over Tor and has built-in support for CoinJoins: https://wasabiwallet.io
2. Samourai Wallet has Whirlpool, another mixing technology, among other security features: https://www.samouraiwallet.com/features
3. You can skip the usual exchanges and use Bisq for peer-to-peer trading over Tor, including selling BTC for fiat: https://bisq.network
4. Lightning network (a layer 2 network on top of Bitcoin) has exploded in popularity; it’s also a major privacy win for transactions: https://medium.com/breez-technology/lightning-network-routing-privacy-and-efficiency-in-a-positive-sum-game-b8e443f50247
Most wallets nowadays don’t let you reuse addresses; even with plain vanilla Bitcoin transactions, this makes it much more difficult to link an identity with a Bitcoin transaction.
And this is before Taproot and Schnorr signatures are added to the Bitcoin protocol in the not too distant future: https://blog.bitmex.com/the-schnorr-signature-taproot-softfork-proposal/
There's more but the point should be clear: it’s actually fairly easy to dramatically increase the anonymity of bitcoin transactions.
A lot of analysts put excessive weight on interest rate activity. Especially when rates start rising into reasonable territory (closer to the inflation rate), the effect tapers. For example, if the Fed raised rates to 100% tomorrow, it would be almost the same economic effect as if they raised it to 1000%. It would essentially just stop all borrowing in the affected channels and cause banks to reduce lending to the point where they don't find themselves needing to take a reserve loan and pay that rate.
Arthur Hayes did an entertaining write-up of some of the other factors the Fed can use, two of which are either not being leveraged or actively conflicting with the interest rate hikes [0]. We could guess at political motivations for going soft on inflation until the election (while appearing to be hard on inflation) and then really ramping it up (including finally reducing the Fed's balance sheet and ramping up reverse repo sizes) in November when inflation continues, predictably, because the Fed keeps expanding its balance sheet and interest rates are still low (relative to most of its history).
[0] https://blog.bitmex.com/teach-me-daddy/
> Let's say a fresh fork happens causing a chain split. Both chains have 50% market cap and hashrate. How do you measure "popularity" at this point so that your prediction of "the most popular fork wins" is actually helpful? ETH forking away from ETC was a very controversial topic at the time.
You have to go forward into the future to evaluate the claim. The claim is that if you look at things... let's say 5 years later, one of those is going to be dead. If you find that one of the forks still has, for example, 20% as much hash power as the other, you have disproved the claim. So it's not a tautology.
Another way to formulate that part of the claim would be to say something like "the half-life of a fork is only X amount of time, so it's a very bad idea to try to pull one off".
> There are still Bitcoin Qt 0.8.x nodes on the network which are ~10 years old.
There's no way they're fully compatible. At the very least, consider that block that generated 184 billion bitcoins and had to immediately get the code changed. And look at all of these: https://blog.bitmex.com/bitcoins-consensus-forks/
Couple of points in response: Why would it disappear tomorrow -- it wont. Ill always run a full node. Many like me. This makes it valuable.
Censorship resistance is not a marketing spin. Its absolutely true about bitcoin! There is no central controller, no government, how can anyone stop a valid private key holder from submitting a valid signature? Sure, we could block 8333/tcp on the great firewall, but thats why we have Satellites now!! As long as you have a communication channel that can reach the Bitcoin p2p network, it cannot die.
The 'censorship resistance is marketing' attitude is spoken like a true first worlder. There are many places on this Earth where censorship resistant money is critical. There are many groups that cannot interact with the global banking system due to sanctions. Look around outside the US!
and we havent even spoken about how destructive the centralization of banking has become: https://blog.bitmex.com/thetimes/ This blog post explains very clearly how the monetary base of our economy is inflated every day due to lack of diversity in banking.