USD Is a Shitcoin
This week's HSEP Update is the Cinco de Mayo Version! Which is to say it's coming your way pre-market rather than post market because Mike has plans today.
I’m switching up the HSEP a little bit this week after not doing one last week (sorry about that). For those of you who get to see these portfolio updates, I’d love some feedback. If ya’ll like it this way better, I’ll stick with it. The reason I’m going with pre-market today rather than post-market is because I want a margarita at 4 pm. Wait, no, I think it’s more helpful to give you guys time to make any adjustments to your own strategy based on if you agree with how I see things. With that, HSEP Update coming after some chili pepper spice…
The Dollar is a Shitcoin
As the cracks in the fiat regime continue to be exposed through bank failure after bank failure, I think it’s important to point out some similarities between the gunpoint currency and the crypto coins with the worst “tokenomics.” I know I sort of already did this, but Bloomberg employs legendary trolls and I think it’s important to reflect on what USD is uncomfortably similar to.
One of the big reasons so many traditional investors and Bitcoin Maximalists can’t stand alternative crypto coins is because of the perception that they’re all Ponzi schemes and scams. They believe, somehow, that Bitcoin is different from a number-go-up wet dream and is more “pure” despite failing to live up to the creator’s medium of exchange vision.
Anyway, a Ponzi is essentially a system where the person or people running the game are actually stealing the original investment money and paying out returns from fresh investments. Eventually, this system collapses because the Ponzi runners stop finding fresh marks to give them more money.
There are a lot of crypto coins that could probably be categorized as overt Ponzi coins. Sam Bankman-Fried basically described them as such on the Odd Lots podcast with the previously mentioned Bloomberg troll last year. My take on SBF’s description of yield farming from Checkmate: The Fall of FTX:
His rambling “money in a box” analogy is preposterous and isn’t really a framework for finding networks with actual value exchange. He’s essentially describing how yield farming, his firm’s bread and butter, is a Ponzi scheme without calling it that.
Here’s an example of a classic Ponzi-coin:
It’s a proof-of-stake coin that has no supply cap and a variable emission rate. Stakers have to deposit their coins to receive new emission supply and the coin lockups are often several years. Sometimes new coins can be airdropped at the behest of the developers but usually the airdrops go directly to insiders who then dump them into additional risky yield-farming protocols. Since these coins are digital, they’re just sort of created out of nowhere.
Whoops! I just described the US dollar.
HSEP Weekly Update: Cinco de Mayo
Keep reading with a 7-day free trial
Subscribe to Heretic Speculator to keep reading this post and get 7 days of free access to the full post archives.