Thursday, November 10, 2022

Cardano Daily Discussion - November 11, 2022

Hello everyone,

Welcome to the Cardano Daily Discussion!

The standard sub rules apply here (see sidebar), with the exception that price discussion is allowed in this thread, though we encourage you to try not to make this the focus and talk about the project itself. Please ask questions, help others and be civil - be sure to get involved in Project Catalyst too!

If you're new, please make sure you're read through the newbies guide and share it with others (use the ?newbies comment command to reference it).

⚠️ Scam Warning ⚠️

Please read the Cybersecurity guidelines for Cardano Users.

There are ongoing giveaway scams on youtube and many scammers lurking in Cardano's social channels impersonating ambassadors/moderators/official staff contacting users via direct messages.

For example, searching 'cardano' on youtube and sorting by most recent upload date shows several giveaway scams running (all videos in screenshot are scams):

Ongoing 'giveaway' scams on Youtube

The youtube scams are automated; use stolen footage usually of Charles Hoskinson and are restreamed so to appear to be 'live'; appear to have many watchers (which are bots); use bought hacked channels and are edited to appear like official channels.

Do not be fooled!

To be clear:

  • ⚠️ There is no such thing as a Cardano giveaway
  • ⚠️ Never share your seed phrase with ANYONE
  • ⚠️ Never send ADA to someone promising to send you more ADA back
  • ⚠️ You will never be contacted by ambassadors/moderators/staff

Please report scams on the Cardano Fraud Detection Bureau.

⚠️ Scam Warning ⚠️


Corsicana Timeline Observation

RIOT announced Corsicana in April 2022:

The Expansion has begun with the development of an initial 400 megawatts (“MW”) of capacity on a 265-acre site, with immersion-cooled mining and hosting operations expected to commence in July 2023.

400MW in July 2023.

Timeline update in the Q3 announcement 3 days ago:

The first phase of the Corsicana Facility will consist of 400 MW, with Bitcoin mining operations expected to commence by the fourth quarter of 2023.

400MW in Q4 2023. OK, already a schedule slip.

The real interesting note is hidden in their letter to the US house in Sep 2022. On page 4, it shows the forecasted electricity usage per year of the corsicana facility:

Year GWh
2022 0
2023 199
2024 1,727
2025 2,405

Using a 400MW capacity, we can turn GWh into days of uptime*:

Year Uptime in days
2022 0
2023 20
2024 180
2025 250

RIOT isn't forecasting 400MW running in Q4 2023. They don't even forecast this by 2025.

It's clear that "operations expected to commence" doesn't mean 400MW of capacity, it means a couple machines. That's technically not a lie, but is very misleading.

By April 2024, we'll have had another BTC halving, reducing revenue by half. At current BTC prices, RIOT would be losing money just on the electricity. And this is before Corsicana really even gets going.

(*)The formula is GWh # / 0.4 / 24.
0.4 = 400MW and there are 24h in a day.


Kraken’s Jesse Powell Blast FTX And Sam Bankman-Fried Without Naming Them

https://www.newsbtc.com/wp-content/uploads/2022/11/FTTUSD\_2022-11-10\_23-15-17-460x256.png

Leave it to Jesse Powell to say what everyone in crypto is thinking. “I’m really trying to control my rage,” the mind behind Kraken tweeted to begin his rant. In the following article, we’ll comment on several of his very interesting points. Make no mistake, though, Jesse Powell thinks this isn’t over and the crypto industry will have to work for years to make up for… some other cryptocurrency exchange’s mistake. “More business failures are sure to come as the contagion spreads,” he warned.

2/ Our good, trusting nature makes us easy targets for con artists. Some even tell us straight up that they're here for profits, not crypto, and we praise them for their honesty.

Yet we're surprised when they turn out to be who they said they are. We need to raise our standards.

— Jesse Powell (@jespow) November 10, 2022

At one point, Powell even gave the best advice possible for future crypto investors. “Don’t trust. Verify.”

What he didn’t do, though, was naming Sam Bankman-Fried, FTX, or Alameda Research. We are assuming this is all about them, but it’s just an assumption.

Jesse Powell Allegedly Blast Sam Bankman-Fried

First of all, the head of Kraken doesn’t buy the “I made a mistake” line that Sam Bankman-Fried has been feeding the public via Twitter. And Powell doesn’t mince words while doing so.

“This isn’t about aiming high and missing. This is about recklessness, greed, self-interest, hubris, sociopathic behavior that causes a person to risk all the hard-won progress this industry has earned over a decade, for their own personal gain.”

The thing is, Sam Bankman-Fried didn’t only blow up his two billion-dollar businesses. He blew up the whole crypto industry. “We give them power to speak for us but they haven’t earned that privilege. When they blow themselves up, it’s our house, our reputation, our people which bear the brunt of the damage,” Powell tweeted. And he’s probably right about this. Everyone will have to pay for  Bankman-Fried’s mistakes.

5/ The damage here is huge. An exchange implosion of this magnitude is a gift to #bitcoin haters all over the world. It's the excuse they were waiting for to justify whatever attack they've been keeping in their back pocket.

We're going to be working to undo this for years.

— Jesse Powell (@jespow) November 10, 2022

Then, in a bizarre turn of events, Jesse Powell brought bitcoin into the mix:

“An exchange implosion of this magnitude is a gift to bitcoin haters all over the world. It’s the excuse they were waiting for to justify whatever attack they’ve been keeping in their back pocket.”

What does the FTX implosion have to do with bitcoin? In fact, out of all the crypto world, bitcoiners are the less affected by all of this. In bitcoin culture, the self-custody of your assets is paramount. And people who make the effort and self-custody aren’t directly affected by exchanges blowing up and losing their customer’s hard-earned money. They are affected by the price movements these black swan events generate, though.

FTT price chart for 11/10/2022 on Binance | Source: FTT/USD on TradingView.com

Are The Media, VCs, And The US Government To Blame?

This is the most interesting part of Jesse Powell’s rant. As bitcoiners denounced Sam Bankman-Fried’s shady business model left and right, the man became a media darling like few others. His frequent political donations, the way he said what the establishment wants to hear about crypto regulation, and the whole myth about him being an effective-altruism vegan were the perfect combination. 

“VCs, the media, the “experts” failed. People torched their own reputations vouching for individuals, projects, businesses they had not diligenced.”

We’re pretty sure “diligenced” is not a word, but Jesse Powell’s message stands. The media failed miserably and led retail astray. They will never admit it, but Sam Bankman-Fried was on the cover of “Fortune” a couple of weeks ago. “The New Warren Buffet?” was the article’s title.

9/ Red flags:* acting like you know everything after showing up to the battle 8 years late* 9 figs buying political favor* being overeager to please DC* huge ego purchases, like 9-fig sports deals* being a "media darling", seeking out puff pieces* EA virtue signaling* FTT

— Jesse Powell (@jespow) November 10, 2022

What about VCs, though? Aren’t they at least partially responsible for financing FTX? Before you answer, read what Jesse Powell has to say about it. He’s got inside information:

“I know for a fact that VCs wrote checks blindly. Why? Because revenues were strong. Were they sustainable? Were they bleeding out money the other side? Was it all predicated on an untenable self-dealing setup, frontrunning clients, misappropriation of user funds? Never asked.”

11/ US lawmakers & regulators have some accountability too. You drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner. Enforcement wrongfully focuses on convenient, on-shore good actors.

— Jesse Powell (@jespow) November 10, 2022

Last but not least, what about the US Government and its lack of crypto regulation clarity?

“US lawmakers & regulators have some accountability too. You drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner.”

Jesse Powell is not saying those institutions are as guilty as Sam Bankman-Fried allegedly is, but they really dropped the ball on this one. And, as it always happens, the people suffered.

Featured Image by Luke Jernejcic on Unsplash | Charts by TradingView


A Collection of My Favorite Graphs

Currently heavily short the market FWIW. I put this together for anyone who can't read. Enjoy!

The Fed has a current target terminal rate of about 5%. Here is what that will look like historically.

FFR

The last time we had rates of 5% that was sustained for any period of time was the mid to late nineties. Let's see how the personal savings rate was back then.

PSR

The 90's saw a savings rate of about 7.25, currently we are at 3.1.

Well major disasters are difficult without the help of too much credit. So let's take a look.

Consumer Loans

Not that I am a big fan of them but fractals are neat cause they offer a reference for timing. Trying to mark it down to the day, week or month is foolish but to generally situate yourself, they are not bad.

Fractals

This image is from September so just fast forward two months. We currently have something special, a mixture of systemic issues and overvaluation. Either way, this bear is just about to start roaring.

What is different now that we didn't have to deal with back then?

Passive investing makes up a significantly larger share than it used to.

Passive Investing

Get ready for selling across the board regardless of what investment you have. The index doesn't care.

What else? Oh. Options!

Option Volume

We also have a new wonderful asset class called crypto, lets check in....

FTX Explosion

BlockFi Next?

Bitcoin

Frauds are starting to get exposed and the leverage that was being used poses a systemic risk to related parties. In an environment that is already not too peachy.

Well at least no recession yet!

Corporate Earnings

Google Trends for Layoffs

As Burry predicted, white collars are getting smoked while part-timers are doing ok. On net though, this is not good.

Real Earnings Hit Persisting

Inflation is far from victimless. In real terms, people are about to be in the deep red when it comes to earnings. Inflations initial benefits are coming to collect their payment.

Elections

While there is a more nuanced conversation to be had, the point stands. Dems are here to stay and as Gen Z continues to mature into voting age, the odds that the GOP can gain any meaningful ground significantly declined as of November 8th. The rough part about free money is that it is highly infectious. The best short term solution to inflation is more inflation.

10-year yield

The 10 year yield is still yielding negative real returns and in the face of a much higher chance of inflationary fiscal policies, does monetary policy matter as much as we all like to believe?

Debt/GDP

Debt to GDP also shows that we are not nearly as equipped to bargain rates downward. Unless we start to inflate it away, except inflation pushes yields higher. Uh oh. A rock and a hard place.

Housing P/E

View this as housing P/E ratio. Now lets look at mortgage rates!

30-year fixed

Oh lovely! At 2000's levels. So a housing bubble to rival 08 with an even weaker consumer. Fun!

Social Network

What makes bank runs even more fun? A sensationalization of world events. Bandwagoning is much more volatile and dangerous than ever before thanks to the mass leveraging of eyeballs.

Let us not forget the market usually runs ahead of these catastrophic economic events by about 1 year too. So this is probably much closer to smoking the markets than it may seem.

Let's finish with on a happy note! Buffett! Let's look at his indicator!

Buffett Indicator

The indicator is coming down fellas! All the way back down to the dot com bubble high! Great progress!!!

TL:DR We are F*****

Not financial advice. In short, I'm max short.


I am 16 year old and as of now, I hold $1,400,000+ In Cryptocurrency, I have no Idea on what I should do, or how to cash all of it out. (I'm living In Brazil right now)

Now If you are a Roblox player, this may be very shocking to you
you'll find A LOT about what I've been saying if you simply look up "roblox beaming" on youtube or google.

And yes, I first got Involved with all that stuff when I was 11 years old, and yes I can difference evil from good and I know exactly what I did.

also love to all my true friends from rbxplace since 2017, love to adurite.com, mmc and all stock coms, if you guys are reading this you'll know who i am. <3

So 8 years ago (In 2014, when I was 8 years old) I started playing this game called Roblox, 2 years later, late 2016 I met somebody, somebody who would change my life in the following years;

Harlow was his name, Harlow and I used to play this Sword Fighting game genre on Roblox, We had sword clanning events, sword duel games and etc;

Harlow and I met up In New Jersey when I was visitting grandparents, never had any contact with him In real life after that;

So 1 year later, mid 2017 when clans started using Discord for communications, one of our clan leaders (we were in multiple clans) had been compromised out of his account, his account had a lot of roblox value, multiple Items worth a lot of robux, and the person who did it to him joined our clan server to brag about it, Harlow and I had a conversation with him asking why he did that and how, of course he wouldn't tell us how he did it, but he did tell us it was for money, we eventually started a big discussion about it and the guy made a groupchat with a few of his friends who were scammers/hackers just like he was;
From now on we're gonna refer to the person who compromised my clan leader's item as "Zast"

They explained to us that there was a roblox blackmarket with their own community and market values, even rates! Harlow knew what I was thinking, and I knew exactly what Harlow was thinking;

Moving on a few weeks later we got our first hit, we joined all BM (Black Market) communities we could, we tried to sell off our hit and got scammed by some arab guy, he told us he'd send the money after we sent him items and we were dumb enough to do it;

We immediately went to Zast, and explained to him what happened; Zast then explained that we should never go first with anybody, he then taught us that we could sell onsite or use a middleman in every trade, he also tried to sell us one of his "methods" cause ours was "weak"

2 or 3 months later we're at 20k-30k USD (that was a lot to me back then and i was very proud of it), we then decided to quit;

1 year later In 2018 a friend of mine put Harlow and I back in the game, and the community started maining cryptocurrency, and so did Harlow and I;

2 years later (2020) Harlow and I were 6 figures already, we actually tried investing on Stocks and other stuff and promised that we would quit for good If we got good results, turned out Investing Isn't as easy and you have to be very lucky, damn these guys on youtube who try to make a big deal out of "investing"

so a few months later big scandals on Roblox trading and developing community started, and It involved Bribez (one of the black market communities Harlow and I were part of) and some members of it, some people we knew too.
Some Bribez members were hitting multiple millions from game developers and traders, some of hitters were Rezonox, Kareem, Intuition, Brenny, Twothegod and some other names I won't mention;

Kareem probably hit more than 100 Mil in less than a month. There was a video of Rez hitting 50 Mil+ on youtube (it's probably still there if you look rezonox up), and Harlow and I were so amazed by that. We've never seen anybody hit like that before, and the people who got hit had no Idea on how they got hit, turns out Kareem abused Roblox Support fails and rez had roblox Interns working with him.

February, 2021.
Somewhere between February 10-14, I got In contact with a Roblox support moderator on twitter and started discussing "business"
We eventually took it to Discord and I Introduced them to Harlow.

Harlow and I showed them a scheme that could make us 400k+ in 1 and a half month.
We just hoped that they were corrupt enough to accept.
On the next day I got a DM from them and they did take our offer, we spent the next 2 weeks planning and getting our targets ready, getting receipts we needed, VPNs and preparing multiple bitcoin addresses to receive money.

We put In all the work on march 3rd, there was a lot of chaos in following 2 months, we made 345K -360K Instead of 400k but It was still good enough.
I got involved with some other stuff Involving huge amounts of crypto, NFT Schemes and reselling and I always put Harlow In with me. I had finally reached 7 figures by january 2022 cashed out some of my money, went on a trip with my family to Spain and bought my father a new car.

I've always told my family I resold game Items for money, well It was true but I never told them how I got the money. When my Income got bigger I had to make new excuses and tell them I started working NFTs and explained to them how the NFT world works, It was for their own good, I don't even wanna know how they would react If I told them that 70% of my money Is from illicit activities.

I officially quit all and any illicit activity on May 2022 with 1Mil+ In bitcoin and 300k In ethereum, and I promised to myself and God that now this Is for good, Harlow understands and says he'll also be quitting soon.
but as of now, I really don't know what to do with my money, I came here just to ask for advice but I actually feel really good getting this off my chest, letting more people know what I've done, I think I just want people to relate with me lol.

And before people start asking, I do feel bad about some of the things I've done and sometimes I lack sleep cause of them, but I'm living In peace with my heart and my family.

So, what should I do with all this money? how do I even cash It out with no trouble?
I know exactly where to convert In the com, but I'd probably just get scammed If I tried to convert 1M+. I have a friend who had 800k USD In crypto, he cashed all of it out slowly and that took him like 6 months.
I don't really care how long It'll take to cash out all of the money I have or If I have to cash out In separate parts like I did to buy the car, I just want a way to do It without legal trouble.

Fs heavenzone arrested by feds
Fs axinzone u were the best hitter ever
Fs zackray, i rlly hated when u showed off with ur all mighty 8 figs but u were the father of the com.
Fs russo thanks for getting me into the nft business


Grayscale Bitcoin Trust Tumbles By 41% Amid The FTX Calamity

https://www.newsbtc.com/wp-content/uploads/2022/11/BTCUSDT\_2022-11-11\_03-29-13-860x499.png

The recent crisis in the world’s third-largest crypto exchange, FTX, is creating more devastating conditions in the Bitcoin and crypto market. Over the past few days, the FTX token (FTT) has lost more than 70% of its value.

The events seem to have unlocked the bears into the market. As a result, the cumulative market cap has drastically decreased, indicating an overall negative performance.

Also, several other crypto assets have been in the south. For example, Bitcoin has experienced more downward pull this week. The price of BTC has dipped by almost 21% in just five days. The primary crypto asset, Bitcoin, now trades at $17,745, showing in increase

Bitcoin price surges above $17,000 l BTCUSDT on Tradingview.comThe impact of the bearish crypto market is gradually spreading. The largest global institutional Bitcoin fund, the Grayscale Bitcoin Trust (GBTC), has been caught in the web of the crisis.

Grayscale Bitcoin Trust Caught In The Web Of FTX Crumble

A report revealed that GBTC ended the day at a record discount of 41%. Its price was $8.76 per share. The BTC trust has been plummeting for almost a year since November 12, 2021, after hitting its high of $51.47 per share.

GBTC has a structure issue since it is an investment trust fund. Hence, it lacks the free creation of its shares or a suitable redemption program. Such a lapse offers significant price discrepancies against the fund’s underlying BTC holdings.

Subsequently, Grayscale has been attempting to convert GBTC to an exchange-traded fund (ETF). This will enable the market maker to create and redeem shares and permanently reduce the premium and discount of its shares.

Having filed its application in October 2021, Grayscale now awaits the decision of the Security Exchange Commission (SEC). However, the SEC officially denied the firm’s allocation in converting GBTC to a spot Bitcoin ETF on June 29.

The denial didn’t go down well with Grayscale, as the company took the matter to court. It filed the opening legal brief on October 11, challenging the decision of the SEC.

Root Of FTX Crypto Exchange Crisis

The recent crisis and collapse of the FTX crypto exchange are traced back to November 2. Then, Alameda Research, owned by Sam Bankman-Fried (SBF), suffered a balance sheet leakage. This revealed that the firm holds a large amount of FTX Token (FTT), the native token of the FTX crypto exchange.

The fact that a prominent trading firm holds a massive amount of a token raised concern in the crypto community. Hence, there were multiple questions regarding the relationship between FTX and Alameda.

The entire saga created doubts in most users of FTX leading to panic withdrawals of funds from the platform and its crumble. On November 7, there was over $451 million worth of stablecoin outflows on FTX, as per data from Nansen.

Featured image from Pixabay, chart from TradingView.com