awrence

Well a couple things. First as another commenter pointed out i believe correctly, this tweet was sent before that aggreement was finalized so your point is moot technically. But let's assume for the sake of market integrity CEOs shouldn't lie. (doesn't stop politicians from getting elected or prosecuted but i'll leave that aside :). This was not as you seem to claim a lie. This was a forecast which cannot be proven before hand to be false or not. The exact tweet was: TESLA made 0 cars in 2011, but will make around 500k in 2019. Followed by a clarification that same day that he meant an annualized rate of around 500k. You can't factually prove this was wrong the day it was made. As it turns out it seems to me he got damn close and it was totally a legit forecast and not excessively bold but obviously you're welcome to have a different view.

Yeah certainly seems as far as that whole thing is concerned no one cares to check / reinforce on the SEC side :) not that we can know for sure tbh. Bit of a super grey area all this imho. But like, if you're a potential TSLA investor and you can't be bothered to do two minutes of homework to figure out Musk's communcation "style", i don't know, like, should the SEC protect you? Maybe? Maybe not... And all things considered, there are plenty of CEO's doing worse by their shareholders than Elon so far...

That aside, 112k reported Q4. That's pretty damn close to 500k annualized.

If the SEC's new standard is to reprimand every CEO that makes a forecast the company ends up coming short on they're gonna get pretty busy pretty quick...

This feels like a semantics back and forth. Call it compound growth then. It's the same concept. This applies to all yielding assets. You can call it divs / buybacks for stocks and interest for bonds, but it's the same thing / effect.

I agree but that doesn't negate the point. Any economic asset with limited supply has two sources of value. The first is intrinsic as you've correctly pointed out which through intrinsic demand by people looking to use the asset for its actual properties will gain intrinsic value.

The second is monetary. Asset values inflate beyond intrinsic values as a result of monetary demand for them by users that acquire them not for their intrinsic properties but for their potential capacity to be redeemed for value in the future. This monetary demand lives on top of intrinsic demand and drives overal value of the asset up the supply / demand curve.

My comments applied specifically to the monetary user base of any asset. This base's choice of their monetary base is entirely elective, socially constructed and reinforced. And their particular choice will gain favor if they can convince people to get on same the band wagon. Under this specific use case, they will tend to exhibit the perfectly understandable behaviors I've described.

All monetary value is entirely socially constructed, very similar to religion. And as with religion it naturally feeds on evangilizing and convincing others to join. The more adherents you have the more powerful your network / adoption gets. It's a natural consequence that any adopter of a given monetary asset will try and convince others to join. That's how you have gold bugs, real estate bugs, art bugs, fiat bugs and yes ... now crypto bugs. Don't hate the player...

I agree mathematically but wealth is very much a relative phenomenon, hence the term "inequality". Yes if an alien dropped a bunch of real wealth on the planet and gave it to a lucky individual, the others would be no poorer, but they would sure feel it (all else equal).

This is obviously a highly complex and lengthy topic that spurs tons of thought experiments but I generally agree with your latter point.

Nope, you're exactly right, and it's one of the main engines behind wealth inequality. Once you reach what I personally call material escape velocity, the point at which your lifestyle + inflation < yield on your capital, your wealth accrues up relentlessly. It's like escaping a financial gravity well. Eventually you get to a level where you can weather just about any market shock and then there's basically no way to get sucked back down barring things like death, taxes, divorce etc. The people that have reached this point casually boost on higher while everyone else who hasn't and can't save vs lifestyle needs gets left behind.

You're also right people are thinking beating the market, but that's also a bit silly, you can just buy the market and match it, who needs to beat anything if they've reached this point...

Fair point. But assumes Bezos doesn't loophole capital gains taxes to 0, which I could be wrong about but i feel like he does. That effect will also be maxed out to cap gains rates.

Inflation comes in different flavors. If all you do is print and hand out 1bn to each citizen, they'll just be able to outspend other dollar holders in the world. Prices will adjust, but the amount of real goods in the world per capita is unchanged. You're just reallocating who gets what amongst monetary savers. If your wealth is in the actual stuff people end up buying, this is very much a side concern for you. Bezos is in that camp.

Bezos is basically entirely invested in stocks (Amazon). His exposure to monetary inflation is roughly 0. If the government hands out 1bn to everyone that'll happen at the expense of cash / bond holders. Prices from Amazon services will just adjust accordingly to the inflation spike along with their profit margins.

You wouldn't be pissed for too long though :)

I contend it's not. There are two main features which proper (decentralized) cryptocurrencies are supposed to offer.

The first is censorship resistance. And I can assure you that however in the world you set up something backed by a fiat, its controlling government can step in and seize your collateral if and when it pleases and then you're screwed. But you can certainly come up with all sorts of fancy legal speak and marketing pitches to argue otherwise which makerdao is basically doing.

The second is protection from currency manipulation and stable coins solve nothing on that front, but let's assume for the sake of argumentation that people interested in stable coins are aware of that.

All stablecoins are Venmo calling themselves decentralized cryptocurrencies. Venmo is honest and tells you it's managing a USD deposit balance for you and amending its private centralized ledger accordingly (and sometimes providing a short term credit service on top). FB et al are lying to you and putting a disingenuous patina of techno hype and grossly misleading decentralized implication on their project by calling them cryptocurrencies. Not surprising but completely uninteresting.

Which is basically my "regulatory loophole" comment.

I loved the show but in case you missed it this was a very eye opening take that seems genuine.

https://www.newyorker.com/news/our-columnists/what-hbos-cher...

True. But they still 2-3 billion working for them for free. And then that's a specific example where they went and made poor choices with their funds etc. On paper if all you do is create a "stablecoin" and segregate funds in an interest bearing account and don't touch them then its free running interest to you.

On paper, you're basically entirely right. Stablecoins including FB are all smokescreens to sell managing fiat on an internal database for you with "blockchain" wrapped around it. This project and stablecoins in general have nothing to do with cryptocurrencies. With that said i can tell you at least one solid reason why any issuer would do it. At a bare minimum they can earn overnight on the holdings since stablecoins don't kick back interest to date. Although with stablecoin competition that should probably start happening until it squeezes to 0 and then it really wouldn't make any sense except to like monetize spying on you I suppose or something. But to take an example, at this point tether is generating 75mm a year for free for it owners at 0 risk. It's the crypto equivalent of a "free" checking account that doesn't pay interest. Not that any exchange was paying interest for fiat deposits in the first place so i'm not sure to what extent that's relevant for cryptoexchangess, but for FB obviously it would since they're starting from 0.

With that said I can imagine one reason why users would care for USD stablecoins. The US has made owning and dealing with USD directly an absolute horrendous nightmare for international users and US citizens abroad following FATCA et al. And this way you can claim you never owned or touched USD which means whoever is holding stablecoins for you instead of USD doesn't have to file truckloads of paperwork for you to open the account. That's a regulatory loophole though one could imagine the US would start complaining about if this really took off.

There's one remote reason I can think of that people would flip to stablecoins vs fiat if they had some tax view that that wasn't a constructive sale and it could benefit from some likekind kind of treatment since its a "crypto" and not a "fiat". It's obviously a silly argument and there's no way the IRS would fall for it (nor do they even accept it between regular cryptos) but i can't speak for other jurisdictions.

That's very possible. Although I'm not sure how he imagines escaping to another planet would be a solution for whatever threat AI specifically might pose. I'm pretty sure it would find a way to follow you through the solar system :)

Exactly. Although I wouldn't personally think he built Tesla to potentially support Space X. He gave it the same 10% slim chance of success when he started as Space X, and he allocated to it roughly the same amount of funds ~ 100mm to each (for a total = to his entire net worth). So by going after Tesla as well he significantly hindered his chances of succeeding with Space X as that narrowed funds available for that project by half and if he had failed the fourth Falcon 1 launch it would have been game over for that. If all he cared for was Mars, it would have made a lot more sense for him to throw 200mm into Space X and greatly increase his chances of successfully developing an orbital vehicle and grow from there in partnership with NASA.

I think generally his core vision or at least core mission statement is to help humanity scale and survive and he'll allocate funds / explore opportunities however he seems best to achieve that.

One pillar of that vision is planetary colonisation to act as a hedge / diversification against a single planet extinction event. The other is making Earth life sustainable hence sustainably electrifying all forms of fossil fuel use cases the founding venture for that being Tesla.

All that said, I have a hard time at this point imagining Elon ever being resource constrained for his goals. He just has too many promising potential revenue lines. Hell, he could maybe fund all of it one day with a single asteroid capture for all we know.

His core constraint is time and he'll do whatever he can to speed things up. Crew Dragon was an important deliverable but ultimately obviously can't be expanded to serve the final vision and it makes sense to quickly move on with all the additional knowledge gained from the effort as a huge benefit.

Starship development should make the next few years just fascinating for us space nerds.

That is most probably not going to happen. It was the original plan but it would have involved landing legs coming out of the heat shield which NASA was queasy about and would have involved quite a bit more effort to develop.

Crew dragon is (on the cusp of) delivering human launch to ISS capabilities back to NASA which was the core mission and a crucial objective for NASA so it wouldn't be dependent on Russian launch capabilities now so unsurprisingly inflated to outrageous prices since the shuttle was retired (not that the shuttle wasn't outrageously expensive either). Roscosmos had charmingly started charging 90mm per seat. Space X will charge 20 and will be capable of launching 7 astronauts vs 3 max capacity on Soyuz.

But Crew Dragon will have little to no part to play in the final objective of planetary colonisation so Space X doesn't care for it beyond that and is focusing full steam ahead on Starship.

Terrific mission though. Bravo Space X.

What you're describing is basically an insurance mechanism. There is no reason you couldn't implement the same for cryptos. But at least under that explicit framework, those who had not participated in that scheme would not have to pay the risk premium associated with it which is currently incurred by fiat holders whether they like it or not (under your scenario).

True cryptocurrencies, read properly decentralized (which currently means through an expensive and well distributed PoW process) allow the creation of digital assets whose issuance and transfer mechanisms can't be tempered with by a central agent. This is a true pretty massive innovation. This is not reinventing the wheel, that wheel did not exist until bitcoin showed up.

It comes with unique upsides, eg: a central bank can’t inflate them, which for monetary assets, is a massive part of the valuation equation, eg: I can transact in them in a collapsed economy with no functioning money (ie venezuela). It comes with downsides, eg: if i get my bitcoin stolen I have less governmental power to find redress. But there’s a bit of a fallacy in the thinking that fiats are better from that perspective.

I would argue fiats are generally the same but the government has an additional option in that they can print more money to make specific people whole. Example a bank goes under because there was fraud, someone managed to pull out fiat through some means (pulling out cash for example). Because the government owns the press they can print more fiat to make depositors whole. This isn’t a magic bullet though, because you’re in effect imposing a monetary tax on the rest of the fiat saving community by doing so.

Outside of that solution, which isn’t a 0 cost one, the situation is identical to cryptos, you have to go through the courts to get your stolen holdings back. And if you lost them, it's no different than if your bundle of cash had gone up in flames or your stash of gold had gone down with a ship, you'd be out of luck. The massive thing cryptos provide is a digital savings mechanism that can’t be inflated by a central agent. If you’re a digital monetary saver, that’s a hugely compelling alternative which has a massive potential market base.

There has just been immense confusion about what blockchain technology is meant to enable because unfortunately, amidst all the hype, a ton of people who don't understand the point of it have started to peddle the absolute non sense concept that is a private blockchain. These are actually better known as databases, and are obviously not a miracle innovation, they’re just SQL wrapped up in blockchain hype. And in most cases you’re just fine with SQL et al between a few responsible counterparties that can go through the court system if they need to but generally trust each other.

The only true innovation is the decentralized public ledger. A properly decentralized public ledger is actually a horribly inefficient way to maintain a ledger, but this is necessary and by construct, because the only way you can have a secure immutabl'ish ledger (no human abstract creation is truly immutable) is to make amending it or the rules it follows highly democratic and expensive to change. The united states constution is a good analogy of a properly decentralized blockchain.

From an economic impact perspective there is only one absolutely major groundbreaking application for this: to create monetary digital vehicles immune from centralized manipulation (read mostly, from inflationary interventions). The market value for money in the world is between 100-300 tn USD equivalent depending on what you count which is ballpark equivalent to the amount of real wealth in the world (that's a coincidence). This is by orders of magnitude the killer use case of cryptocurrencies, which incidentally was Satoshi’s original vision.

After that, you can conceive of all sorts of other applications, but mostly smart contracts which can theoretically provide immutablish programmable transfers of wealth mechanisms, free of intermediaries or corrupt legal frameworks. This has tons of downsides and risks and the max valuation down the line is a fraction of the monetary use case, but it’s a thing that does get plenty of people excited and i'm sure some of it is potentially legit, especially in disfunctional countries.

In general though the second you read private and blockchain used together, you can mostly roll your eyes and move on. EG JPM coin to name but the latest example.