The bell is ringing.
Last time around, I called the 2022 dip slightly too soon when bitcoin was at twenty thousand, then called it again, more firmly and with greater confidence, when it was at sixteen thousand, which was dead on accurate.
The current dip is sixty thousand or so. I may have called it a little too late, bitcoin was recently at fifty eight thousand, and is now at sixty two thousand, though I think it likely to briefly fall below fifty six thousand, in which case I will have again called the dip slightly too soon — but also likely to never see sixty two thousand again, in which case I will have called the dip slightly late. If you buy now, you might regret it, but you will not regret it for very long.
From dip to dip that is dollars falling by a factor of nearly four relative to bitcoin
From the 2017 peak to the 2021 peak, about the same.
The next peak will likely be some time in 2025, though my crystal ball is looking somewhat cloudy. If Trump takes action to restore the usefulness of the dollar as an international currency, could be rather slower. Bitcoin is still in its infancy, with software that makes actually useful still in a horrifyingly crude state, but being worked on. Likely four fold again.
Is it possible to build the crypto, free and soverign therefore, version of stripe? Its hard enough running a business, no one wants to limit their customers to people that have crypto and want to use it. Especially no one wants the added complexity of managing a strange new money, so two problems.
I understand in the long run you’ll have this all as programmatic finance of some sort, but for now the vast majority of people just don’t use crypto except maybe as a casino. You can probably solve the fractured ecosystem problem — Alice wants to pay in GayCoin, Bob wants to be paid in Bitcoin, the checkout interface just converts the payment through some working decentralized exchange and settles when the Bitcoin reaches Bob. Perhaps even have a Bank DAO thing in the middle that eats the risk in exchange for scale, so merchants can fully ignore the problem — but the fiat/crypto problem looks very sticky to me. Looks as if only solvable by exchanges until crypto becomes normalized.
It looks like crypto is rather early on the adoption curve when it comes to small payments. Could be very rough on SovCorps that will have a terrible time managing any amount of fiat. They will have the choice of only serving crypto powerusers, or accepting the cuck harness imposed by orgs like coinbase.
Apples sells iphones to make more users of the apple app store app. Infrastructure building.
If you had an interface that can present people with their choice of clearing houses offering exchange rates between different financial instruments that – crucially – can’t be interfered with on the interface level by hostile actors, that’s already 99% of the problem done there and you hardly even need your own cryptocurrency done right at that point; though your own cryptocurrency done right would be a natural extension of the things you’d need to do for such a thing, and perhaps intimately entangled with it as well.
The problem is most people buy things online with either credit cards or some electronic banking scheme, of which each country has its own. You cannot achieve both sovereignty and access to this customer base, which is going to include the customers you need when first starting. You cannot really get away from this problem unless you’re selling to the technically savvy, which can be a rather hard crowd to sell to. It cuts off a lot of markets for the sort of simple slopware that is easy and quick to put out, and therefore a good target for a business venture using an all too interesting and potentially very complicated finance and management backend.
I would rather enjoy it if the soon to be flood of AI slopware generating images, parsing emails, making dumb meme videos and so forth, could be powered by burgeoning sovcorp frameworks. Look at something like openrouter.ai, theyve cleverly put themselves between customers and sellers by having a single point where you plug money in. Would be better if openrouter was a sovcorp, so if one of the apps happens to become too interesting, it would take more than a friendly email to shut down.
Supose you are buying oil from Russia. Can’t pay in US$, hard to get rubles.
There is already quite a lot oil being paid for with Bitcoin.
Suppose you are an entrepot in Aghanistan, the crossroads of Asia. No formal banking system. You are using Halawa, but dealing with countries not well connected to the Halawa system.
> If I’m selling bits/network access, well my only customers are crypto users now, aren’t they?
A whole of businesses in the domain name and hosting business take bitcoin.
Russia , Afghanistan are the exception not the rule.
You can buy from china , Arab gulf , Africa in US$ and that more than enough.
It will be another thing if/when china move in Taiwan.
Russia is no small exception.
And you can buy from China from big well connected businesses, and small businesses that sell through a big well connected intermediary, but buying from a Chinese small business in fiat dollars is hard and rapidly getting harder. Increasingly, they are turning to bitcoin for international sales.
El Salvador, a country in which US fiat dollars are street cash, went Bitcoin in substantial part because it is hard to move those street dollars between El Salvador and the rest of the world.
A lot of countries, including some surprising ones, have quietly set up internal parallel payments systems in the past ten years. Without decoupling from the dollar, they are ready to move on if such a decoupling comes with minimum disruption.
It is the minimal disruption that I doubt. Observe Russian efforts to set up an alternative to the dollar system. Not off to a good start.
The fundamental problem with a debt based finance system is that you have to trust the bankers, and no one trusts the bankers.
The fundamental reason the world keeps going to a debt based financed system is that it funds the state. A crisis comes, the state urgently needs funding, institutes a debt based finance system.
But the debt based system relies on a tradition of honesty and good conduct by bankers, which tradition was slowly built up over time in a hard money based system where it was possible for a bank to just go bust, and the penalties for going bust were dire. During a period of debt based finance, that tradition fades away.
International finance likely to be disrupted, businesses likely to be disrupted on some level, but even in some quite “poor” countries the US can now no longer simply switch off daily payments (or force them back to cash) for the general public. Russia has obviously had problems, but its Mir system means that its internal economy has kept spinning, and even thriving. SWIFT, Visa, etc. not the power they once were, even if they are still a power.
Soft money is a problem everywhere. Russia, though separate, is still a soft money fiat economy. So is China. If other countries are pushed out of the “world system” they are also likely to remain soft money fiat systems for a time.
A government can ensure its soft money is used internally, and make transactions go smoothly enough. International transactions are more difficult. Again I point to the example of El Salvador.
El Salvador gets a lot of remittances from abroad, overseas workers sending money home to their families. And even though El Salvador is in the dollar system, and dollars are street cash in El Salvador, sending dollars to El Salvador was problem, and Bitcoin a better solution.
Transmitting money over distance, even whithin a single country, is apt to become difficult due to banks being disfunctional. And moral decline is rendering banks less and less functional, in some countries more than others.
Visa and mastercard work great, but getting permission to receive, rather than pay, visa payments is difficult, and the recipients catch no end of grief.
Visa and Mastercard are easy for payers within the Global American Empire, not so easy for payees. And for both payers and payees outside the Global American Empire, or on the periphery of empire, considerably harder.
I’m thinking from the standpoint of someone running a SovCorp.
I highly doubt people moving large or small amounts of oil will be the first adopters. It will first be small easy to conceptualize businesses first, and import things will be built later based on their success or failure; just as BTC was first used to buy pizza.
>A whole of businesses in the domain name and hosting business take bitcoin
So if I’m running a sovcorp, I now have this problem where I can ONLY accept crypto, or I can open the can of worms that is having a real bank account that is associated to the sovcorp, and deal with the very long list of problems that will cause.
I can think of many easy to spin up test case businesses that would be happy to be a sovcorp, if not for the fact you are dependent on your customers being crypto native. Would like to address this problem if at all possible.
Indeed you do. So the first use case for Sovcorps is managing conversion between one crypto currency and another.
To serve the nation state corporations and private individuals that need to use crypto currency for international transactions, we need level one bitcoin, liquid, which is a level two bitcoin, the various snark based level two bitcoin currencies that bitcoinOS and the Grail bridge makes possible, liquid lightning (which exists, but is unusable), tether, and tether lightning (which does not yet exist, but should).
And we need dexes and sovcorps to manage conversions between these different forms of currency.
What we are seeing serving this need are Daos, which go through an elaborate pretence of not being unlicensed limited liability publicly traded corporations built on a blockchain to avoid being charged with evading the Howey test. A sovcorp is just a Dao with less pretending.
For international transactions, not so sticky. On the periphery of empire, and outside empire, turning dollars in the inner empire banking system into money you can use in the outer empire and beyond the empire and vice versa is quite hard and getting harder, and a lot of businesses are using crypto currency to avoid this problem.
So who are my customers? I’m having trouble imagining how this works in a sovcorp framework.
The simplest thing to sell on the internet is bits, usually bits that come out of a server you control access to. If physical goods, sovcorp seems unreasonably dangerous to deal with, with little benefit. So the first sovcorps should probably be some software or network service, right?
If I’m selling physical goods in a way underserved by regular corps and finance, well there’s probably a reason they’re underserved. Making a sovcorp now increases the number of people that could potentially get everyone into trouble.
If I’m selling bits/network access, well my only customers are crypto users now, aren’t they? So now my potential customer base is way smaller, and being very online likely to have incredibly high standards for a digital good. So why should I bother? Because the product is cut out of the fiat world? Very serious limitation on use cases.
Ideally, you have some friendly jurisdiction so that some company can stand up a fiat payment endpoint for the normies, that pays out to your sovcorp vault address. On the payment webpage offer a discount for crypto payments, maybe a fence sitting customer will switch after they like your product.
I saw Sparrow Wallet upgraded to version 2 recently, is that still your recommended desktop wallet?
I have not investigated, and not upgraded. Major changes tend to be enemy action. Just have not looked into it, though I should have.