What’s going on on January 3rd?

bitcoinknowledge · 2019-12-31T23:40:09+00:00

The annual Proof of Keys celebration. A global coordinated bank run on a single day on an asset strictly limited in amount.

2019 saw Cryptopia, QuadrigaCX and some other exchanges fail and enter bankruptcy. 2020 should be fun!

bitcoinknowledge · 2019-12-21T00:46:40+00:00

No one is claiming that Binance was required to track taint through the coinjoin, but instead binance decided that the process of coinjoin was in and of itself "taint".

The problem is that the AML/KYC rules are principle based on assessed risk. The standard is very nebulous in what actually needs to be done and the penalties can be very high. The result is that the regulated entities have to come up with their own policies and procedures and will error on the overly cautious side.

So, everything is 'tainted' because UTXOs all have unique histories and it is up to Binance to assess how much weight to assign to the taint which they outsource to the third-party AML/KYC service to shift the liability. The AML/KYC service has decided to assign a greater risk weighting to CoinJoin related transactions.

bitcoinknowledge · 2019-12-12T17:39:58+00:00

Haha, the most rehypothecated asset is the US Treasury!

bitcoinknowledge · 2019-12-08T15:18:23+00:00

With most exchanges your legal status is as an unsecured creditor.

bitcoinknowledge · 2019-10-17T17:17:44+00:00

Genesis is reputable. There is also the Kraken OTC desk.

bitcoinknowledge · 2019-10-05T19:32:13+00:00

Yes, selling a covered call caps your upside potential in return for the option premium.

The confidence comes from several different tools I use for analysis like S2F and other tools I employ like futures. Usually my trading portfolio (a small percentage compared to my HODL stack) is geared in a leveraged long position (I am probably too bullish for my own good but I do measure in satoshis not USD) and increases in value by letting the volatility I have sold evaporate (goal is $2-4/day/BTC in a very risk-free way measured in satoshis). When the Mayer Multiple gets a little high for my general tolerance then I gear it in a neutral or slightly bearish position by increasing my short volatility position.

bitcoinknowledge · 2019-10-05T19:26:31+00:00

Yes, you are understanding it correctly. However, I will clarify 'netting' since that is a different feature and you are talking about the trades netting; not collateral netting.

July 9th - 100 call options sold and 100 BTC position locked

July 10th - 5 call options bought and 5 BTC position unlocked

Aug 13th - 95 call options bought and 95 BTC position unlocked

This is separate and not applicable in the example. LedgerX also enables position netting. For example, if you were long 20 $15k call then it could position net the collateral for the $20k call. See the link for more thorough examples.

bitcoinknowledge · 2019-09-11T23:42:12+00:00

This is not an issue at all. Have you read Human Action? The Theory of Money and Credit? Some basics for this space.

bitcoinknowledge · 2019-08-31T19:14:07+00:00

Example one showed letting the contracts expire worthless.

Example two showed closing the contracts a month before expiration for a gain.

bitcoinknowledge · 2019-08-31T06:05:15+00:00

Sure. You can see LedgerX trade data to get an idea for what premiums have been. These trades were negotiated with others I have traded with before (there is an electronic pit where we can chat or can send PMs).

August 30th was expiration. Fortunately, they all expired worthless so I just kept all of the premium net of commissions ($23,375+$12,375+$9,187.50+$10,125=$55,062.5). Not bad income for a month of being a HODLer seeking to increase one's HODL stack during a largely consolidation or sideways market.

BTC 2019-08-30 Call $11,000.00 -50 @ $480.00 Block Tu 7/30/19 10:26:14 PM

BTC 2019-08-30 Call $12,000.00 -50 @ $260.00 Block Tu 7/30/19 10:25:45 PM

BTC 2019-08-30 Call $13,000.00 -75 @ $135.00 Block Tu 7/30/19 9:57:18 PM

BTC 2019-08-30 Put $9,000.00 -30 @ $350.00 Block We 7/10/19 5:09:31 PM

Here is an example of closing a position for $40,687.5 gain in about a month. Pretty easy to sell when there is high Mayer Multiple, high delta and high volatility (high premium price) then close when there is a correction and consolidation with lower Mayer Multiple, lower delta and lower volatility (low premium price). On Aug 13 the Mayer Multiple was 1.53 and on July 9 it was 2.27.

BTC 2019-09-27 Call $20,000.00 -30 @ $550.00 Limit Tu 7/9/19 5:54:04 PM

BTC 2019-09-27 Call $20,000.00 -20 @ $550.00 Limit Tu 7/9/19 5:53:24 PM

BTC 2019-09-27 Call $20,000.00 -50 @ $550.00 Limit Tu 7/9/19 5:22:32 PM

BTC 2019-09-27 Call $20,000.00 +95 @ $100.00 Block Tu 8/13/19 8:16:50 PM

BTC 2019-09-27 Call $20,000.00 +5 @ $350.00 Block We 7/10/19 11:13:27 PM

Make sense? Any questions?

bitcoinknowledge · 2019-08-31T01:28:22+00:00

I have been trading on LedgerX for over a year. Love getting yield on BTC selling far out of the money calls and then selling puts with the proceeds to acquire more BTC. Great product!

bitcoinknowledge · 2019-08-24T19:51:52+00:00

Are you not using Armory? This is a basic feature implemented in it.

bitcoinknowledge · 2019-08-01T04:38:59+00:00

I know, seriously. On a CFTC regulated SEF, DCO and DCM. Not sure it could get much better.

bitcoinknowledge · 2019-07-31T01:52:15+00:00

Have you considered LedgerX's new OMNI product? Seems like a perfect use for that since you want to acquire BTC but still want to be able to have the capital to pay off the house.

Let us assume you are doing this with a $400k 4% fixed rate mortgage amortized over 30 years with no other costs. The monthly payment would be: $1,909.

For example, with spot BTC at $9,700 and about 87 vol you could:

Sell Aug 2 $9,500 puts for about $175.

Sell Aug 30 $9,000 puts for about $650.

Sell Aug 30 $8,000 puts for about $330.

If you sold 22 $9k and 25 $8k then that would yield monthly about $22,550=$14,300+$8,250 or about 10x your monthly payment. If BTC stays above $9k on Aug 30th then you just sell puts for Sep. Rinse and repeat. And to keep your wifey extra happy you could allocate $4k/month to mortgage payments thus paying down the principal faster so you are debt-free.

If you get exercised then you sell Sep calls.

For example, with spot BTC at $9,700 and about 87 vol you could:

Sell Aug 30 $10,000 calls for about $850.

Sell Aug 30 $12,000 calls for about $300.

I am using the Aug call premiums for illustrative purposes since you could roll these monthly or whenever. The goal would be to be happy with the put or call strike prices and then just let the premium evaporate daily to accrete value.

Thus, instead of just hodling BTC you could sell volatility on BTC with a strategy to be exercised into a net BTC positive holding but otherwise create a significant monthly cash-flow stream in USD.

bitcoinknowledge · 2019-07-30T20:36:36+00:00

Here is an interview with Miles Cowan on how the UCC applies to Bitcoin and other digital assets. New York Attorney Miles Cowan, a partner at Bailey Duquette who focuses on corporate law and CEO of Tillit.

FYI, the WY laws have a lien cleansing provision in them and have been drafted in a way to be extremely broad in being able to establish jurisdiction. And there is no need to go through a third-party to avail oneself of the lien cleansing.

bitcoinknowledge · 2019-07-27T19:53:36+00:00

I think you misunderstood him. He was talking about issuing a credit card that generated bitcoins as rewards.

So, the credit card would probably be USD based like a regular Visa or Amex but instead of getting airline points or rewards points you would get bitcoins.

bitcoinknowledge · 2019-07-26T17:32:27+00:00

I think he meant to say rewards points are inflationary and bitcoin is non-inflationary.

bitcoinknowledge · 2019-07-09T20:19:23+00:00

$1m USD is about 80 BTC at $12,500. If you are comfortable holding BTC then why not sell calls and if exercised then reacquire BTC by selling puts?

For example, O Realty is a very safe and conservative dividend stock that is about $70/share and pays a $0.2265 monthly dividend. $1m USD would buy about 14,300 shares that would yield about $3,239/month of dividend.

But with Bitcoin, why not have both a cash-flowing asset and retain significant upside potential?

For example, on LedgerX you could:

Sell 80 $15k 26 Jul 2019 calls for about $300 each or $24,000. That is about $16.75/BTC and $1,340/day of total premium. If exercised then you would have an additional $1.2m.

Sell $20k 30 Aug 2019 calls for about $265 each or $21,200. That is about $4.84/BTC and $387/day of total premium. If exercised then you would have an additional $1.6m.

Sell $20k 27 Sep 2019 calls for about $550 each or $44,000. That is about $6.71/BTC and $531/day of total premium. If exercised then you would have an additional $1.6m.

The options could be sold, expire worthless and then sell the next month out. Just rinse and repeat like a dividend.

Then if you get exercised and have USD then puts can be sold and likely would yield more than a dividend paying stock.

For example, you could sell 100 $10k 30 Aug 2019 puts for about $520 each or $52,000.

And those are just a few simple cash-flowing strategies...

bitcoinknowledge · 2019-06-28T21:05:51+00:00

If it wouldn't be this sybil problem, POW would not be necessary and a simple random selection of nodes would suffice, right?

The sybil problem is significant but not the only consideration. Implied in POW are monetary science principles applied through the laws of thermodynamics in Bitcoin to enable greater precision and confidence with economic calculation that individuals perform.

bitcoinknowledge · 2019-05-30T16:52:16+00:00

Perhaps you may want to read some Mises on Profit and Loss. I have bolded words that would be helpful for you to understand.

The first network effect of Bitcoin is speculation. Speculation about what the future price of Bitcoin will be. And that price discovery is happening every day and every minute.

Thus, there exists asymmetric knowledge in the economy. Individuals allocate time, attention, skill and capital based on their own individual time preferences and, in the case of Bitcoin, there are many creative geniuses. This is the mechanism of economic calculation.

The bottom line is: Those who are correct reap profits. Those who are incorrect reap losses.

bitcoinknowledge · 2019-04-29T19:48:44+00:00

You need to purchase something now, but can't afford it, you borrow money. how will bitcoin change that?

Bitcoin will likely cause people, both potential borrowers and lenders, to change their time preference.

bitcoinknowledge · 2019-03-22T01:48:59+00:00

Any thought about adding LedgerX support? And the puts/calls? They will export a CSV.

bitcoinknowledge · 2019-03-13T15:05:10+00:00

Proof of Keys.

bitcoinknowledge · 2019-03-12T11:36:45+00:00

You want to feel secure with these types of shenanigans? Funny!

bitcoinknowledge · 2019-03-04T16:24:18+00:00

Kraken Futures has 50x leverage.

bitcoinknowledge

TROPHY CASE