2,056 karma · joined June 25, 2010
However, we have made laws that prohibit certain kinds of discrimination against "protected classes", e.g. based on sex and race.
Being an advocate of gun rights is not a protected class.
I don't know what you mean by that. Please explain.
(EDIT: Legitimately don't understand the downvotes here.)
https://en.m.wikipedia.org/wiki/Magnus_effect
(Spinning a pen fast enough can turn it into a wing, causing it to behave strangely when tossed upward)
Suppressing, fighting, and avoiding feelings usually strengthens them. By contrast, calm compassionate and curious observation will often allow them to dissipate "on their own".
Deal with bad feelings like you deal with an angry person: listen seriously. Often they just want to be heard.
It is sad that they are often seen only as either hateful or a panacea.
As a statement of fact it's ok. As an activity it's usually a waste of time.
Stepping back, norm breaking seems to have gotten even more newsworthy lately. However, publicizing a broken norm is not always an obvious good. Propagation of the news of a norm being broken encourages more breaking of this norm. And often we have little understanding of the work this norm is doing.
Is it damaging for a child to entertain the idea that their parents might regret their existence? Probably. Is it damaging for all involved to have a big conversation about motherhood regret and its being ok? Also, probably. Not every thought deserves to be aired.
Over the last week or so, we’ve recounted the problems with bitcoin’s market structure and how they are likely to impact the upcoming launch of bitcoin futures (here, here and here).
In the course of explaining the structural difficulties, we’ve pointed out how the capacity of market makers and bi-directional traders to support the product is crucial if bitcoin futures are ever to become a success. Currently, this is unlikely to happen because there is no easy way to play both sides of the market without taking on huge amounts of credit, fragmentation, illiquidity and hacker risk on the physical side.
As it stands, CFD and spread-betting houses are the ones mostly attempting to provide this bridging role. Problem is, even they are struggling to process the risk — and that’s despite being much less intensively supervised than the more established players who would usually be interested in servicing futures markets.
Some sort of risk-absorbing entity, as a consequence, must appear if retail and institutional participants (who are used to fiduciary standards) are to step into the market in size.
As a result, there are only three possible scenarios from here on in:
The futures (plagued by illiquidity and non convergence with the underlying) flop. The lack of a market-maker redistributing one-sided risk back into the market will see the risk transferred elsewhere, most likely into the clearing house (to the risk of the entire trading community). A less established player with a greater tolerance for risk — possibly a natural long — steps into the fray. The third option doesn’t necessarily prevent the second option from playing out, however, given such an entity would still have to be serviced by the CME/CBOE clearing systems.
Nevertheless, let’s imagine such an entity exists. What would its game plan be? And why would it think it could handle the risk?
The easy answer to the second question is that it may have spotted an arbitrage it thinks could more than compensate for the risk at hand.
As to the game plan…
If you’re gunning to be the only entity in town prepared to sell bitcoin futures, it would be in your interests to start “pre-hedging” physical bitcoin as soon as possible with a view to locking in a risk-free basis return once the ability to sell futures on a regulated venue becomes possible.
Ideally, the trade would require an average purchasing price that’s much lower than the rate bitcoin futures would eventually be sold at. To maximise this trade, as much value would have to be ploughed into the purchase (or generation) of bitcoin ahead of time, as likely buyside demand for the futures once launched.
In terms of timing, due to bitcoin’s illiquidity, a “pre-hedging” position of this size would no doubt take time to put on. From that perspective it would make sense to start purchases as soon as a futures contract looked even remotely viable. FWIW, according to Factiva, the first serious clue CME was looking into a listing came in November 2016 when it launched a pair of indexes designed to track the virtual currency’s price. The CFTC’s decision in July to allow LedgerX to run a swap execution facility for bitcoin options, meanwhile, was a likely indicator a futures contract could be approved soon as well:
Nevertheless, no matter how strategically planned, pre-hedging of this size is always bound to leave a market footprint. (Especially in a market as illiquid as bitcoin.)
With that, the sort of self-fulfilling feedback loop that usually occurs when someone attempts to corner a market probably comes into motion.
For many, sparking a feedback loop of this kind is often deemed a trading objective in and of itself. Not for a bonafide smart operator. The smart money understands a good trade is as much about executing the “out” as it is about positioning the “in”. You can start a pump, but you can’t always profitably orchestrate the dump.
Hence why the futures component of the trade cannot be under emphasized.
Without the certainty of a properly regulated marketplace defending the futures side of the equation, a payoff cannot be guaranteed. It’s why the arbitrage exists in the first place: the trade cannot be exercised elsewhere in the bitcoin ecosystem because the risk of counterparty default at the first sign of distress is far too great. You’d win the trade, but you’d probably lose the payout.
If a regulated futures market takes that risk away, however, the trade becomes a no-brainer if not a mastermind opportunity.
Which is arguably where we are now.
Indeed — if such an entity does exist — only three possible risks that threaten the trade at this point:
The futures launch is suspended unexpectedly, perhaps due to regulatory concerns or industry pushback? The anticipated futures demand never arrives because the margin costs of holding open long positions proves to be too great and/or liquidity is so shoddy nobody can trade effectively. The cash settled return on the futures leg, won’t necessarily be matched by the price achieved on the physical liquidation.
One way or another, we will find out soon.
I don't know the endgame, but consider if the rational decision of any investor becomes, with high confidence, to convert most of their money to bitcoin. What happens to the rest of the economy?
Clarification: I should have said "optimizing for value of BTC".
Not protocol, the emergent system that has as its goal the maximization of the value of BTC.
By all means enforce antitrust rules against Uber, but the reality is that taxis are going to go extinct, and Uber will too if they don't get self driving cars sorted out.
The notion that people will be kind and nice because of social norms or "plain decency" or something is sentimental hogwash. People behave well when the system rewards them for doing so and penalises them for not.
When Tux's #2 told me he couldn't do it because Mark was asleep (time zones! etc), it became pretty clear they didn't have a clue about what they were doing.
However, the author's broader point appears to be that the economic impact of a deflationary currency is largely unknown, and as expressed is worth considering. IANAE, but it seems at least conceptually possible that there could be an economy in which every actor's rational decision was to always buy some token because it appreciated so reliably. Consider, e.g., Shubik's "Dollar Auction" paradox, in which a sequence of rational decisions can lead to an ultimately irrational final outcome. Coupled with Bitcoin's expenditure of energy as proof of work, Bitcoin could prove to behave like a kind of superintelligence akin to one of Bostrom's paperclip maximizers, except it's one that consumes more and more energy resources as it attempts to maximize the value of Bitcoin.
DNA is mechanistic in how it operates. Its power comes from our ignorance of the way it affects us. When we know how it works we're able to get in there and change our destiny. "Nature" and "nurture" aren't opposites, they're tightly integrated. To the extent they seem distinct it's because we are ignorant of how they relate in specific instances.
E.g. we might find that a particular gene is highly correlated with the early onset of kidney disease/failure. "Oh no!" says the person who finds out that they have a (say) 90% probability of kidney failure in before they're 60. What if, however, the entire reason that this gene led to kidney failure was because it decreased a person's desire to drink water? Low water consumption then led to stones leading to kidney disease. Given this information, the impact of the gene on kidney failure in an individual is entirely negated, because they can internally correct and just choose to drink more water.
This same line of reasoning can apply to intelligence: what if our genes code not for some mysterious magical "competence", but instead for a predisposition to find certain things interesting? And what if we're able to make the right things interesting in the right way? This enables us to significantly diminish the impact of those genes, too.
Similarly with dogs -- the impact of genes as an animal grows from being a baby to an adult is not on eventual outcome, it's on development. Some dogs are less trainable because they're less food motivated. What if, during the dog's development, we could slightly restrict access to food, and grow in the dog the desire for it? Now the dog is more trainable.