Bitcoin is a Credit Default Swap that pays when the fiat system collapses.
Discussion
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Importantly without counterparty risk! (Provided you hold your keys)
💯The ultimate CDS. It’ll take some time though.
Sup Greg
Wut?
I thought this was a Greg Foss quote did I just fail
Oh lol, it is for sure something I have heard Foss talk about many times.
I forgot his first name is Greg 🤭
I know he is busy but he’s the best on bonds. I’d love to hear a Nostr Nest on bonds. I think I understand them. Would love to learn more due to the US Bitcoin Bond idea floating about
In fact it would be fun to get Nostr Nests some buzz with a banking series by some of the greats as now is the time. I’d love to hear Karl Denniger who literally wrote the book on leverage and Paul Craig Roberts who weathered one of the last Econ big crises. Just dreamin’ 😁
#[5] will make fun of me for saying this, but if you really want to learn all about bonds read ‘The Bond Book’. It reads like a dictionary and is a gruelingly boring read, but it really is comprehensive and easy to understand.
I’ll check it out. Hey, I wrote tax articles under my own name and ghost written for years so I’ll probably love this 🤭
just curious, why do they call it a "swap"? Isn't it just an insurance policy?
(I always have to draw the cash flow map in my head.
I pay cash to a risky somebody on credit, hoping I make some interest. I also pay for an insurance policy (a hedge?) for if the debtor defaults. If my debtor defaults, my insurance policy pays me the cash instead. Something like that.
Is life insurance a swap? Like, if I die, my family swaps me for some cash?)
It is absolutely an insurance contract. You are swapping the risk of default.
I
The funny thing about a CDS is that it’s like buying fire insurance on someone else’s home. Wonder what that does to your incentives 🤔
In traditional insurance, you typically have an “insurable interest”, meaning you’re buying fire insurance on the place YOU live in
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