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Bo Schinski
3cb5cc88dbf864fa720e0e74f45eeafca892d18b283466992f2305759773d9ce
Bitcoiner since 2020

Where do you find this data? I’m only able to find inflows in $$$.

This penetration into the bond market is a third Bitcoin reactor, converting fiat to Bitcoin. These reactions in the commodities, equities and bond markets will continue until all fiat is converted. The vicissitudes of human behavior will determine the rate of the reaction. We can expect to see fear and greed seesaw result in volatility, not unlike the ocean's tide coming in a series of waves, with an eventual high tide a certainty.

Here’s what I’m seeing:

Until 2024 Bitcoin was part of the commodities market, which along with gold and silver, is about 25 Trillion in size.

With the advent of Bitcoin ETF's Bitcoin entered the equities (stock) market, about 175 Trillion in size.

Now Bitcoin has entered the bond market which is about 687 Trillion, roughly four times the size of the equites market. It has entered the bond market through Microstrategy and firms that are copying their example like Marathon Digital, Metaplanet and Semler Scientific.

Quick review:

The bond market is comprised of borrowers and lenders. A bond is a contract that spells out the details of the loan.

The borrowers, for the most part, are nations and corporations who  have a current need for funds that they will repay in the future at some higher amount. This to entice the lenders to provide them the funds.

The lenders, who buy the bonds, are usually corporations or individuals who wish to preserve their capital but also generate a safe return in the form of interest or a gain in the value of the bond.

Borrowers who can provide their lenders with a higher than average return or a safer than average return have an advantage in the market and will attract investors to their bonds who would have otherwise invested elsewhere.

These “Bitcoin Bonds” are based on the hardest, scarcest money there is. Suddenly they are in competition with fiat bonds which are subject to deterioration due to inflation or regulation. In addition there is a flywheel effect enabling the issuer to buy more Bitcoin which in turn enables them to issue more bonds.

I believe it is only a matter of time until these bitcoin bonds dominate the bond market, forcing a revaluation of dollars vs Bitcoin.

Replying to Avatar Lyn Alden

Gm.

The human brain runs on something like 20 watts of power. Less than a lightbulb. How many calculations it can do per second is partially unknown, but based on various estimates over the years the processing power is generally believed to be something like one exaflop per second. Some estimates are lower in the petaflops, while others are some orders of magnitude higher. Obviously “software” matters too, not just raw processing ability. The programming of the processor ensures that the processing capability is used efficiently rather than wasted.

The top superconductors crossed the exaflop level within the past few years. However, they run on like 20 megawatts of power; a million times more power than the human brain. They’re extremely large and energy intensive.

As a result, datacenter processing capability reaches something akin to the processing capability of a human brain well before that level of ability can be installed in a human-sized robot with similar energy consumption levels as a human.

Now, robots can offload some of their processing to datacenters, but still at a relatively high cost per calculation for a while, and at the general bandwidth limit of whatever the best wireless rate is in a region at any given time.

For some calculation types, of course computers passed humans long ago. A basic math calculator, for example, beats the best humans at calculating mathematical formulas. But when we talk about human brain “calculations” what it means is that the brain is taking in enormous amounts of information (all five senses at high fidelity, plus other indirect senses like acceleration/balance and other inputs), calculating it to make sense of it, calculating all sorts of things to interact with the environment, and simultaneously running the processes related to sapient thought and general problem solving.

As a result, it’s far easier to get a robot to work on an assembly line more efficiently than a human, or to calculate an insane number of protein folding tests, and things like that, than it is for a robot to be able to operate as effectively as a human in the real world with countless unexpected hazards.

For example, imagine a hypothetical robot handyman. It can drive out to your house and fix any residential electrical, plumbing, or hvac issue, or help with various miscellaneous things (fix drywall, get something out of a tree, carry stuff out of your attic, etc), and then drive back to the station. This is a shockingly hard problem. First they need extremely advanced mechanical bodies. Second they need processors strong enough and cheap enough to safely operate in 3D space with all sorts of unexpected things happening around them (compared to a highly controlled manufacturing floor), now all of these skills, and interact with language.

So, AI can start helping us offload certain types of white collar remote work and expand medical breakthroughs before it can replace human level in-field skilled physical labor. And it can start helping with specific in-field tasks that require less programming, like a robot dog or robot butler to watch your property or come with the owner around town, listen to owner commands and carry some of them out, and follow basic rules when left alone, well before it can fully replace a human for many in-field things.

Anyway, that’s a general framework or napkin math to help think through the order of impacts that AI can have as it goes up orders of magnitude in power and efficiency in the coming years.

Another eye-opener. Thanks again, Lyn.

Bitcoin cannot make the dollar what it is not. Even if it could, there is no benefit in doing so. The world will inevitably migrate to the harder money. But there is an advantage to be gained by the US trading its gold for BTC. That would be a step in the migration.

You were right the first time, Jeff. It’s a mule deer.

It oughta be pretty close to hunting season there.

I thought about your post for a moment and realized I HAD seen a porcupine in a tree. Very high in the tree at that.

I heard Safedean one time on a podcast describe how there was a self-limiting mechanism to the transfer from Fiat to bitcoin. It sounded very logical to me at the time, but I have not heard of it since and lost track of the podcast.

Replying to Avatar HODL

My flag’s flying upside down tonight.