YouSaid · the spoken record

Adam Back

lines on the record: 68
first: 2021-05-05
most recent: 2021-05-05
sittings or episodes: 1
sources: podcast

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“I mean, I think the interesting, one of the interesting things is, I think this is a gloss node data, but other people play the same, which is that the removal of coins from exchange. So it seems like large buyers are buying chunks of coins in any pullbacks and cold storing them, basically. And so it seems like in terms of the comments we just had about not as many deep pulls as in previous cycles and not as deep that these kind of buying activities are probably making it more buoyant or recover more quickly and so see less deep pullbacks because there's enormous amount of leverage trading and liquidation cascades which are part of the market. The other thing I like is this graph I'll just send it to you which is somebody put together a graph of”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“It's a little bit like you borrowed money and then you put the asset that you bought with the money back into the collateral pool. You've put, let's say you're doing it with bonds, you would have 100,000 euros, buy some bonds, and then put the bonds back into the collateral, and now you've got a lower risk, or you could borrow against it, again, that kind of thing.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Early ASICs. And so that's saying that, and as Bitcoin has generally gone up during that period, I would say that it has historically achieved a return that would exceed typical borrowing costs. And there are reasonably low cost ways to borrow against Bitcoin if you, for example, put Bitcoin in some kind of ETF products in Europe, you might be able to borrow against that because it's then a financial instrument. And actually the BMN is a financial instrument too. I mean, it's a European securitization vehicle. I think it's the first one office kind of that's both a token like an STO liquid security token and a European security token has an ISIN. If you have a bespoke brokerage, they could probably take deposit of it because it has an ISIN and maybe use it as collateral as well. So that would be interesting. If you could put the value of the notes up as collateral, then”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Average, yes, of course, everything is volatile in the Bitcoin space. Now, I'd say that the note is generally lower volatility, like it has a lower Z score, because you have some kind of discounted dollar cost averaging behavior and some derivative behavior just due to delivery of new equipment. If price goes up too fast, that takes a while to backfill the equipment, and that's the current state of the market. Shortage of miners, higher price than surge price compared to norm, difficult to get new miners. So therefore, higher profitability per joule per kilowatt hour in. So I think the average over the period, it reduces the volatility as compared to buying. And it still has a pretty good upside participation, like about 60% upside participation average. We did sort of backtested periods across every 36 month period for some years going back towards”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“A kind of general tax planning question. I guess you might be able to use get a secured loan against Bitcoin, then you wouldn't have sold it and then pay off the loan or something like that.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so obviously, you want to, a Bitcoin is fungible at the end of the period when you look at how many Bitcoins have we mined. So it's unfortunate to be selling a big ratio during periods. You want the ratio to be flat and you can control that by setting aside the capital to pay the electricity bill before you start. So i.e. if you've got $100,000 to invest, don't buy $100,000 of miners and then be selling the coins each month to pay electricity bill. But buy $50,000 of miners and use other $50,000 to pay the electricity bill. And I would argue you're actually going to make more money using that second approach because you're going to be able to keep all of the coins and not be selling them, not be forced to sell them at disadvantageous prices in this volatile market.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Up of mine, Bitcoin is at some discount to current price of Bitcoin, you're obviously going to keep doing it to slowly recoup your original capital expense or reduce your paper loss. I think the other thing is that, and this is why it's, in my opinion, generally not a good idea to sell Bitcoins as you mine them to pay the literacy bill, that you will tend to mine more Bitcoins during a period like this where some people have turned off, you know, so you'll have a lower discount on the mined coins, but you'll continue to mine coins. And so I suppose it's kind of like, you know, buying in a bear market, you know, if you're dollar cost averaging, you get more coins. So it's a bit like that, right? So I think if you are selling coins to pay electricity bills when you're in that kind of bear market for mining period, you're selling a bigger proportion of the coins for power.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“We were profitable. What tends to happen is the least efficient operators will turn off. But I think the other thing that probably surprises people is there's a big kind of gap between you're going to make a decision to invest and buy more equipment and put it online now. And in order to be incentivized to do that, you're going to want to see a certain period of projected return or a certain value of Bitcoin mined versus electrical cost in a ratio of that. And then if that gets to a good point, you'll do the investment. But once you've made the investment, it's a sunk cost. And there's another threshold, which is when would you switch this equipment off temporarily or permanently? And that level is far, far lower. So, you know, you might say, well, under these conditions, if we didn't have these miners, we wouldn't buy them right now. As you have them and they're making more Bitcoins than the electrical cost, your cost.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Has been a pattern going into the halving where people will resurface the mining death spiral theory, which never happens. And I think there's a debate, is the halving passed in, priced in, which is a fascinating debate. But at least the miners certainly know that the hash rate's going to drop. And the number of coins they get per block is going to change, and that's going to push some miners out of profitability. And people are buying miners with a, you know, maybe three-year planning horizon of how long they'll operate it before they'll upgrade it. So if they're buying a year or two before the halving, they've factored that in, basically. And some miners are also not selling coins. So that's what we tend to do. And what we packaged into the blockstream mining instrument as well, it holds the coins for the period it's pre-funded.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So it got more a little bit more profitable because of the fees. And then, as Pine Peters said, within about two weeks, the difficulty will actually drop, and then it will get even more profitable. I mean, the fees will probably normalize, but you will be expending less work per block. So you'll get more Bitcoins per week as a miner. And then presumably in the next period, because at least in the Coin Desk article, they were saying that the miners affected were expecting that power station to be operational again within a couple of weeks, then presumably the difficulty would come back up again and we'll be back to where we were a little bit later. But it really was almost nothing. And actually, ironically, it's more profitable for us as miners, our profit went up a little bit and we'll expect it to go up even more next week. And if there are really people selling in the market because they think that we're making less profit, they're not understanding that difficulty doesn't change in real time, I guess.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, the other thing that I think some people were misunderstanding is they thought that this would be bad news for minors economically, that they would become less profitable immediately. And actually that's not the case. It actually became slightly more profitable to mine. So they were sort of operating, like trading based on an inverted understanding of reality. And the reason that is, is because it's true that the amount of coins across the whole network there would be less blocks or therefore less coins per day, so less profit is going to miners. But full of people, the difficulty doesn't adjust during the two-week period. So if you are mining, you know, with a XA hash or terah hash some amount, your expected coins per day are the same. You're expending the same work in a difficulty the same. So you've got a lot of variants, but your expected blocks might”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“It's miningpoolstats.stream slash bitcoin. And at the top is a little graph with a seven-day history. And you can move the cursor around and it tells you the exact hash rate. I don't know, it's probably an hour or two, period.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Wait a week to get enough samples to have a reasonably accurate measurement. And I think there's a CoinDesk article which got it about right, but I think they dug into how much power”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That's about right. But the difference is I said that on Sunday he said it after collecting a week's more data. So the reason I was able to see it more quickly is there's a kind of obscure site with a tiny little graph. So this site is showing you the reported pool shares pulled together from a dozen top pools. And the pool shares are happening every fraction of a second. So it's very high resolution. And so if you go onto that site, because the graph is so small, you know, you can probably only see a pixel for every hour, but you've got a real-time graph. If somebody, if that power station or if a smaller power station failed, you'd see it, you know, it would drop a bit of suffering. So it's directly accurate view, which is how much hash rate is there right now by the hour. And the other stuff, you know, as Nick Carter said, you need to like.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And then the lowest it had been was, I think like about 126 exahash during the week. And so people use the data from the graph, like they read the plot off the graph, but the error bars on the graph are enormous. So they said 40% drop, but actually it's more like 25 a peak.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think the mining hash rate drop was interesting. So I have some theories about that one. I think people who are less familiar with mining read too much into it. So three factors there. One is most of the graphs you find online showing the hash rate are actually extrapolations from very low samples of a highly variable data point, which is the time between blocks. Of course, it varies, you know, from one minute to 20 minutes, half an hour, an hour at times, right? So the result is the graphs showing the hash rate are wildly inaccurate. During the week period a few days ago, and if you know where to look, the real data is the highest it's ever been is 100%.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Where it's had, I don't know, a dozen or some pretty decent number of 25 to 35% corrections during a period where Bitcoin increased, I don't know, like a factor of 100, right, from $200 eventually up to about 20,000. So I guess that's one of the things about trading Bitcoin for other things. You just have to adapt for the volatility. I was almost thinking that people should try to divide it by 10 or think in log scale or something in terms of what's normal if a stock varies and you believe in its confidence just buy a bit more or hold it doesn't matter kind of thing. I think you just have to adapt for that.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So going back a few years, there was a long period where there were inverse bots. The price would sort of drop a bit, wait a few days to a week until people succeeded to get their wire transfers and it will go straight back up again. I think that was considered to be to leverage trading liquidations or something like that. So I was in the habit of buying these things. And where I ended up, obviously if you spend your money too soon, then it corrects further, you kind of run out of money and you don't get the benefit. So at that time, if a few years ago, I generally wouldn't even buy a dip unless it was 20%. So that was just a tried 10%, always buying too early kind of things like, okay, let's up to the 15, up to 20. But the volatility is kind of lower now, so I'm all going for sort of 10% stuff. And of course, there are nice graphs showing the corrections during previous bull markets.”
2021-05-05 · We Study Billionaires · BTC024: Plan B & Adam Back on Bitcoin Contango & Derivatives (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT