Legendary album

When speaking about bitcoin's return profile vs. other assets, a lot of people use the term "cost of capital" when I think they really mean "hurdle rate".

Cost of capital describes the interest rate you pay to borrow a financial asset, generally to fund other positions. It's normally used in the context of an arbitrage between two different rates. For instance, an investor may borrow short-term and lend long-term to take advantage of a difference in yields across an interest rate curve. A business may borrow operating capital using a line of credit (LOC) from a bank, which is being invested in revenue-driving activities that are used in part to pay interest on the borrowed capital. The rate paid on borrowed money is the cost of capital, and an investor aims to produce higher returns than this cost in order to produce a profit.

While the cost of capital may be a factor in determining an investor's hurdle rate, these are not the same things. A hurdle rate is the baseline rate of return required by a particular capital allocator to make an investment profitable and/or worthwhile. If an investor is borrowing money to make an investment, then his cost of capital is the starting point for his hurdle rate. However, it is not the only factor. A hurdle rate may also take into account other fees and operating expenses. It also takes an assessment of risk into account. A riskier investment implies a higher hurdle rate to compensate for the higher probability that an investment sours.

A hurdle rate can also be defined by establishing a benchmark for comparing a specific investment vs an index. For instance, when investing in the stock market, the S&P 500 is often used to define the hurdle rate, or at least as a starting point for one. Buying a particular company's stock may only make sense if it can meaningfully outperform the index. Otherwise, you might as well buy the index and go to the beach. And if another investment can't match the returns of the index, much less beat it, you're missing out on opportunity. What we're really talking about is not the "cost of capital", but the "opportunity cost of capital" deployed to inferior assets.

When talking about bitcoin's return profile, I believe "hurdle rate" is the more appropriate term. When thinking about long duration assets, bitcoin's returns should be used as the hurdle rate to determine if any other allocation opportunities make sense. If you can't beat bitcoin's return over a 4+ year period, why bother? Just stack sats and chill. 😎

Thank you for coming to my TED talk!

Uff. Sad. Did you stop and told him how bitcoin will save the economy?

Thinking from first principles is hard. Not the logic, but the conclusions. If they're against the main narrative, you are going to be called a conspiracy theorist or weirdo or wack job. The social isolation and peer disapproval is the hardest part.

This is where you need to let go of that desire to fit in and be well thought of by the normies. It's hard work, but worth it for the intellectual freedom.

Some of the most beautiful art we produce features depictions of nudity and AI thinks this is unsafe lol

Nah not this year. Went 5 times many years ago. I still enjoy thinking about the mind expanding experiences and looking at the photos. Have you been?

I often wonder how much overlap there must be in the burner/bitcoin/nostr communities

Looks like my wife and I made it to #BurningMan after all. At least in spirit!! Major FOMO this year!!

Posting notes on #Primal has gotten really slow for some reason.

So bad

Good reality check though

I am planning to sell some bitcoin in the next few weeks to prepare for the winter

I have a feeling things are going to get fuckin wild over the next 6 months

Although I hate selling bitcoin I believe the piece of mind will be worth it

So far on the list I have:

Frozen meat

Propane tanks

Jars of local honey

Frozen soups

Cases of water

Ivermectin

Chaga capsules

Vitamin D

What am I missing?

#asknostr

Thinking about locking 1 BTC in my nsec as a proof of key safety. If somebody gets my key, they can steal the 1BTC. And if they do, I will know my key has leaked.

On Nostr, unless you monitor your own posts VERY closely, you never know if your key has leaked or not. That creates lots of liabilities for businesses and some risks for users. Adding a value that is appropriate to the size of the account could work as attack notifier. And business might even be able to insure that amount with cyber insurance. 🤔

Sockeye salmon fishing season is over, so I took some time today to clean and put away gear. The bag on my larger net had ripped in several places, so I went ahead and replaced it. I have a Pro Apollo brand net with a removable inner ring. It sure made the job easy compared to a traditional net. No tying knots!

#Alaska #Fishing

Bitcoin maximalism used to mean “this network is the most robust, so every successful experiment that has market demand will be built on top of it”.

It somehow degenerated into “anything but this one network is a scam, so we’ll ignore markets by calling participants scammers & frown upon different tech by calling it scammy for even being developed”

Has anyone tested restoring a cold card multisig from seed phrases?

Or even better - create the multisig with cold cards then restore with a different device?

Reason I asked is it appears coldcard does not follow BIP178 spec, and have their own custom fields (global_xpub) - so I wonder how this would work in disaster recovery?? 😅

#asknostr

Do I really need to spend 300usd to set up a bitcoin node? Just ball-parking it on a raspberry pi based node with a 2tb ssd.

Have kids young.

So now we have GitHub KYC, Twitter KYC, what else?

And what else do the Bitcoin gang of Twitter need to migrate to Nostr, the same people who would scream in disgust if they ever encounter a Bitcoin KYC wallet?