1/ Just listened to @Jkylebass and @ErikSTownsend on Macro Voices. Nice to see they're (grudgingly) accepting BTC to some extent, but they both still have some big hang-ups; surmountable ones, though.

Episode: https://www.macrovoices.com/925-macrovoies-250-kyle-bass-commodity-bull-market-inflation-singapore

2/ Eric notes that people have a broken understanding of bitcoin's intrinsic value, saying that folks who think the mining energy spend is the intrinsic value are wrong. I agree!

But that's a strawman...

3/ It's clear to most bitcoiners that mining energy spend is just a *response* to price action, and price is just a result of supply and demand obviously. Supply curve is fixed, so the fundamental variable here is demand.

4/ Honestly this should resonate pretty well with people who lean towards the Austrian school of economics.

Something's value is not the sum of inputs, labor, etc. Value is subjective; ie, human demand, not inputs.

5/ Anyway, demand for BTC goes up and down, but over the longer term, clearly demand is up.

It's up because people demand an asset with bitcoin's fundamental properties. This is where bitcoin's true intrinsic value comes in.

6/ Bitcoin shares many fundamental properties with gold, but in digital form: scarcity, durability, recognizability, etc

The source of bitcoin's "intrinsic" value is the same as the source of gold's "intrinsic" value: demand for those properties. See here https://casebitcoin.com/what-is-bitcoin 

7/ To be clear, what's interesting about gold is not its limited industrial utility (which BTC also has in form of credible timestamping), but the monetary premium people apply to it. They do so due to its core characteristics. Same with BTC.

8/ Ok, with the energy-spend strawman out of the way, we can move on to Eric's assertion that bitcoin will, or at least "should", be replaced by a non-POW chain; a "better" way to build a blockchain or a digital currency.

9/ Without getting religious on POW vs POS vs whatever else, this just isn't the right framing. Bitcoin is the thing that solved the double spending, inflation-control, and fair initial coin distribution first.

10/ It got to global awareness first. It got to "digital gold" first in the minds of people all over the world.

It is both a tech protocol and a money, and getting to those things first creates an enormous network effect.

11/ It is pretty clear that bitcoin's lead as a new store of value has become more dominant, not less, as time goes by.

And this trend is continuing in this new wave of institutional allocations to BTC. See @AriDavidPaul's tweet/thread: https://twitter.com/AriDavidPaul/status/1329842099953479682?s=20

12/ Moving on, I'm happy to see that @ErikSTownsend sees that bitcoin gets harder to ban as more people & institutions takes stakes in it.

13/ I agree with this, and it was always part of the core thesis for BTC that its key properties would be sufficiently attractive that people, institutions, and even folks in government would adopt it, thereby creating political protection.

14/ But still, Eric and Kyle nevertheless resort to the "tulips" trope, which misunderstands where bitcoin's value comes from (dealt with above), but also misunderstands the tulip bubble. This trope doesn't really deserve more attention.

15/ Finally, @Jkylebass notes that they looked at BTC in the $1k-$2k range (which would've been early 2017), but couldn't get regulatory comfort with respect to the SEC, plus lack of custodians, etc...

16/ Totally understandable at the time, but the SEC has since said that BTC is not a security, and there are now plenty of good institutional grade custody and brokerage options. All of the above is solved vs the state of things in 2017.

17/ The other thing Kyle said (with a chuckle) was that they were doing that diligence in the $1-2k range, and now it's over 10k, so it's tough to look at again...

18/ Sure, understandable, but that kinda sounds like rejecting Facebook's Series-B because purely you rejected the A; no new diligence. Probably want to make these decisions based on a valuation/market thesis, not anchoring bias.

19/ I can't imagine @Jkylebass would come away from a (sufficiently thorough) conversation with his former employee, @parkeralewis, still harboring any of these misconceptions, though, so maybe they can get in a room eventually.

20/ Anyways, was a good episode overall, and they are clearly thinking about BTC and making some mental progress. Worth a listen: https://www.macrovoices.com/925-macrovoies-250-kyle-bass-commodity-bull-market-inflation-singapore