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Davos BTC

Davos BTC

Adventure Capitalist

FinTech/Bitcoin : Angel / Advisor / Consultant

“Holding Dollars is a Political Choice”

The title quote of this post comes via Cody Wilson / DEFCAD, click ‘read more’ at the bottom to watch the quote in its original context.

While I was outside having my morning coffee and cigarettes this morning, perusing the Bitcoin subreddit, I happened upon this post, intended to discuss the inclusion of links to “political”/philosophical subreddits such as /r/Libtertarian, /r/Anarcho-Capitalism, and /r/Agorism. I tossed out a quip, that being the title of this blog post.

Later in the comment tree I found myself responding to a comment with something I thought I’d like to share a bit more broadly, and save for my own future reference. The text of that comment follows here:

In a Democracy, each citizen is equally responsible/culpable for the decisions of their Government. Voting for the opposition does not absolve one of the consent they granted to be governed under that system in the first place – and it is that consent that carries with it culpability.

Every pro-life voter, every anti-death penalty voter, every anti-war voter, every Libertarian, and everyone participant in the GDP – is equally and personally responsible for every action of their government. If the choices of your government are not to your liking, you vote for those who will make choices you do agree with. To abstain is to submit – it is a vote in favor of whomever the rest of the population chooses.

If your choice loses their election, by not emigrating or revolting (peacefully if it suits you and/or violently if that doesn’t work), you are tacitly agreeing to be governed by the system and are therefore as equally responsible as those who elected your government.

Even outside of Democracy, the subjects of despots are just as responsible – as not revolting, either peacefully or violently, is just as much a choice as revolution.

Subversion is another choice, of course – one that has proven more effective than voting and less deadly than revolting – but is not inherently absolving of that shared responsibility.

Only the true prisoner, the slave, the child, and the otherwise incapable are absolved.

As a user of (or even just a supporter of) Bitcoin, you are implicitly and explicitly subverting the legacy systems of economics and government. That is just as much a political choice as doing nothing, although I agree it is a more active choice.

In fact, you needn’t even be an active supporter. Everyone running a full node is a passive party to this subversion.

I am just as responsible for my local fiat currency – by the consent to be governed I am implicitly granting in my choice of residence and my choice not to revolt (even if such individual revolution would be futile, it would likely result in my imprisonment which would create the condition of my absolution from the choices of my government) – as I am for the subversion of that currency through my participation in Bitcoin…

One does not negate the other.


Satoshi Dice Sold

Satoshi Dice was one of my first investments in the Bitcoin world – an interesting bit of personal trivia that I probably share with many other crypto-investors out there. I won’t say how much I paid for shares, but over the course of my investment it did passably well. I sold my shares amid the run-up in the BTCUSD price back in March – thinking as I did that a higher purchasing power for 1 BTC would lend itself negatively to the nominal amount being gambled on sites such as SD. I suspect I made the correct call there.


What’s especially interesting to me about the SDice sale is how it relates to the market capitalization of the company. At ฿0.0035 per share to be received by shareholders (actually ฿126,315 for the whole company) the sale reflects a premium to the previous trading price of shares of slightly more than 40% to the upside. This is, of course, very nice if you bought in recently.

What’s more interesting to me is that the actual sale price reflects a DISCOUNT of nearly 50% to the implied market capitalization of the business. Not only is Erik Vorhees paying out nearly 3x the amount that might otherwise have been owed to shareholders based on the sale price, he is accepting ฿80,815 for what the market had been valuing at ฿217,413 (that is, his 87% stake in the company).

The question I have to ask is, what did Erik know that made him feel giving up more than ฿45,000 was the right decision. While I know he wants to focus on Coinapult, wouldn’t it have made just as much (or more) sense to hire a new CEO for SDice and sell some of his holdings (if cash was what he was after)? At the market price, he would only have had to sell a bit over 32 million shares (approximately 32% of the company, leaving him still as the majority owner) at the then-market price to yield the same financial return to himself.

Note: I’m using the last recorded price for SDice from the weekly Bitcoin Securities Index that I publish beside this blog for these figures, or ฿0.0024999 per share. The actual last trading price of S.DICE on MPEX  was ฿0.002.


View the Mid-Week Securities Report Update

Just an aside, as WP likes to call them. I’m not really able to toss out any sort of analysis into the markets at the moment to coincide with the mid-week securities report, but I do want to update my mid-week scorecard and make just a few notes.

I think it’s good to admit when you’re wrong – but I’m not doing that quite yet with regard to AMC.  I do, however, think it’s fair for me to take some blame for not having done enough homework on the company/companies (this is unclear to me) that the stock represents – as I’ve been entirely put-off until now by the operator’s “press release” style of communicating. I will be spending the first few days of next week expert-izing myself on the subject of this issue.

The other thing that is looking pretty clear to me at this point is that ASICMINER is bearing the brunt of what I expect to be temporary capital flight out of Bitcoin. As many in Bitcoinia seek to move capital out of BTC, perhaps to altcoins or back to fiat, during this period of volatility – much of that capital has likewise vacated ASICMINER.

This mid-week report also marks the entrance of BASIC-MINING to my watchlist, entering the chart at #7. I’ll be adding a buy/hold/sell call to this security at the next weekly update which I expect to go out Monday the 15th.

My self-scoring system allocates points based on my call which are then multiplied by the percentage gain/loss experienced by the security based on investments distributed amongst the rated securities weighted to market capitalization.

I currently cover 12 virtual securities and have calls on 7 of them.

  1. ASICMINER – buy (1.15x) call at MCAP: ฿1,644,999.34988304 [7/5/2013]
    Current score = -18.76 (7/9/2013)
  2. LTCGLOBAL – strong buy (2x) call at MCAP: ฿100,972.30003187 [7/5/2013]
    Current score = +0.52 (7/9/2013)
  3. 100TH – hold (0.75x) call at MCAP: ฿155,481.30000000 [7/5/2013]
    Current score = -6.09 (7/9/2013)
  4. S.MPOE – hold (0.75x) call at MCAP: ฿788,610.00000000 [7/5/2013]
    Current Score = +4.49 (7/9/2013)
  5. S.DICE – hold (0.75x) call at MCAP: ฿240,000.00000000 [7/5/2013]
    Current Score = +5.18 (7/9/2013)
  6. NastyMining – hold (0.75x) call at MCAP: ฿12,500.00000000 [7/5/2013]
    Current Score = -0.08 (7/9/2013)
  7. AMC – sell (-1.15x) call at MCAP: ฿141,000.00000000 [7/5/2013]
    Current Score = -15.19 (7/9/2013)

Total Current Score = -29.95 (7/9/2013)

So yeah, not doing great. I’m not sure if I can blame that on my ignorance of AMC or if I should just wait out the call. The stock dropped over 40% last week and has mostly rebounded since – but that’s 10 days of huge volatility and I’ve been hearing good things about the day trade there regardless of what the fundamentals are.

LTCGlobal and ASICMINER still Hot, AMC Not.

View This Week’s Top Securities Report

The movement I mentioned last week
has basically undone itself this week – with AMC dropping enough on its own to fall two places on the index in favor of other securities which had themselves lost value in the same time period. Lots of red on the board this week, it seems.

Except, of course, for the ASICMINER juggernaut. While many will note that it is off a >5BTC high, ASICMINER is still up more than 25% week-on-week and issued a 22mBTC dividend (annualized to over 27% dividend yield).

I’m also closely watching LTC Global, which also owns (the largest open exchange for trading ASICMINER shares). The number of AM shares trading on is up nearly 4% week-on-week and the liquidity differential (namely the number of AM shares listed on vs Bitfunder) is now over 63%.

High volume traders continue to perform an arbitrage trade – selling shares on BTCT to buy them on the forums or BF – to move back to BTCT – which has tightened the spread somewhat between the two markets. However traders seeking liquidity in their AM shares are still strongly favoring BTCT for its liquidity, with more and more shares finding a semi-permanent home there. As AM is easily the largest source of trading revenue to the exchanges (and as BF is not publicly traded) a great deal of AM’s strength is passed-through to LTC Global. The CIPHERMINE IPO this week, which was covered in The Guardian, is also of note as a strong source of LTC Global revenue.

While LTC Global remains considerably behind AMC in the rankings by market capitalization – it is a proven business with a strong position moving forward. It is the preferred market of more ‘serious’ assets, the AMC-PT notwithstanding, and investing in an LTC denominated asset proved this week to be strongly beneficial against the slide in BTCUSD prices. LTC is, likewise, showing itself to be the absolute best hedge against the Forex markets.

Read more for stock ratings…


GOXUSD-BitstampUSD Arbitrage Tightens the Noose

I’ve been tracking the inter-market spread between Mt. Gox and Bitstamp on USD trades since the Mt. Gox announcement that they were temporarily suspending USD-withdrawals. As was noted on The Genesis Block last week, the temporary suspension of USD Withdrawals from Mt. Gox created a large flight of coins from that exchange – Bitstamp being the primary beneficiary.

As the fleeing coins from Gox hit Bitstamp, they were exchanged back out to USD, placing significant downward pressure on the BitstampUSD price while that same flight left the dollars back at Gox chasing fewer coins and perversely supporting and even pushing up the price there.

Since TGB’s article, or perhaps for the duration of the tumult, the more patient traders have been reaping huge rewards. Support is tepid on Bitstamp, but I believe that a great deal of that support is coming from the market makers who are running a one-way arbitrage trade between Bitstamp (and by extension CampBX) and Mt.Gox. This has, over the weekend and leading into today, created a slow-motion merging of the two exchanges as the arbitrage works itself out. This has been perhaps accelerated with the news that Mt. Gox has been actively seeking to re-enter the US markets with the necessary licensing.

Prediction (not investment advice):

Once the two exchanges meet up in price (around $86/$87, I should think) there will be an awful lot of useless fiat sitting over on Gox that traders are going to want to put back to work – and I think that once the intermarket arbitrage play is over, that is when we’ll see it happen.

BTCUSD  93.50 --4.11

As far as news of the day goes, this is quite nice… but I think a more independent survey (preferably a large-scale telephone survey) would provide better statistical relevance / accuracy.

If the gross numbers are wrong the relational numbers are still likely representative. What I look to with this is how positive (or at least inflammatory) it may be for more mainstream press who are slaves to polling. Those media sources neutral or in favor of Bitcoin may well interpret this as a strong positive and it may prompt a reassessment of the direction of their bitcoin-related content.

Those outlets predisposed against Bitcoin will likely become more vehemently opposed (in the worst cases) or begin to actually perform research in an attempt to debunk Bitcoin rather than sticking with the standard FUD. Any amount of research will hopefully bring opponents into the conversation (at least) – which is a conversation I’m confident BTC can hold its own in… and win.


Depending on your view, Bitcoin is either A) an elaborate Ponzi scheme or B) the currency of the future. Or, if you’re the average man on the street, it’s probably C) something you’ve never heard of. Putting a bit of data behind attitudes to the emergent crypto currency that’s got VCs all excited is a new slice of research conducted by survey firm On Device in conjunction with the organisers of an upcoming London-based Bitcoin conference.

The firm surveyed more than 22,000 U.S. consumers in May 2013 to test Bitcoin awareness and levels of trust at this still relatively early stage in its development. Bitcoin went live on the web in 2009, but in currency terms that still makes it a bawling babe. Add in its distinguishing features — being the first decentralised digital currency — plus ongoing teething issues with infrastructure, and political and legal uncertainties

View original post 833 more words

AMC Trebles, Entire Index Up

Well there’s finally some movement in the top-stocks chart… Interpreting that move is where things get a bit complex. The index is fast approaching a total capitalization of ฿3,000,000 – still led by ASICMINER – but the absolute explosion of AMC this week is what I’ll be looking at a bit farther down. Before I get to that, however, it’s interesting to note that every stock monitored in the index was up this week and the index itself was up 18.12%.

This week has seen a lot of positive news behind the KnC Miner development as well as week over week growth in the mining dividend of ASICMINER, which has pushed the day-to-day trading range up into the 3.4-3.5 BTC/share range. A return to retail sales next month seems likely to add even more napalm to the raging inferno.

The explosion this week of AMC (up over 300%) is something that caught me off guard, as I’ve been (and remain) a skeptic. As with nearly all crypto-assets, there’s no there, there until there’s something there. There’s something there at ASICMINER, and there’s something there at most other assets I follow – but while owning crypto-currencies is an innately speculative thing to do, and crypto-securities that much more so, the flows in to AMC this week are insane (~฿1121 net in-flow over the last 18 hours alone) – while the news coming out of AMC doesn’t appear to me to be any more credible than it has ever been (as I said, I remain a skeptic). The index rules, however, require that AMC be listed – and so it is. I will continue to watch with interest but won’t be putting any of my own coins into the operation.

Disclosure: I am a shareholder in: ASICMINER (direct as well as PTs), 100TH, NastyMining and LTCGlobal. I do not have, nor do I intend to initiate within the next 30 days, any position in AMC, S.MPOE, or S.DICE.

Securities Blog Moves, Analysis Blog Begins; or, “Meet the New Blog, Same as the Old Blog”

I’ve decided to move my irregular Crypto-Securities ‘index’ reports to a dedicated blog and begin using this blog for (hopefully) more regular commentary and deeper analysis of crypto-securities. I’ve already done the latest two updates on securities rankings (now available at BTCindex). I’ll also be using this blog to contribute my thoughts to ongoing discussion topics across the bitcoin sphere.


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