This made them a luxury good reserved for the rich and affluent of the upper class living in mansions with big gardens.
Tulips, the #Bitcoin of the 17th century
How a pandemic, FOMO, and speculation made a flower worth the same as a mansion
/THREAD/
This made them a luxury good reserved for the rich and affluent of the upper class living in mansions with big gardens.
Due to the international trade expansion, the growers starting cultivating rare varieties, to achieve higher prices.
The market expansion led to forward bulb-purchase contracts, thus enabling trading during the entire year, and not just during the summer months when tulips bloom.
People from the lower economic class (maids, servants, craftsmen) could not resist the temptation for some quick profits and entered the speculative market.
The influx of new investors and capital led to a surge in the tulip bulb prices.
More than enough to purchase a luxury mansion in the most expensive neighborhood of Amsterdam at the time.
The news spread like wildfire, with contract holders trying to sell their contracts as soon as possible.
Contract holders refused to pay the agreed price and tried to settle with florists for 10% of the contract price.
Desperate growers sold at low prices to secure a profit.
Despite the bubble bursting, the broader economy and most people were unaffected, since it was brief and localized.
Most of the credit was provided by people involved in the tulip trade and not banks, which didn't harm the country's financial system.
The numerous disputes and court litigations for the contracts lead also to a loss of trust.
The most common was that people were bored from the bubonic plague that was ravaging the country at the time.
Sounds familiar?
/END/
https://t.co/LDG4TZXVt9
Tulips, the #Bitcoin of the 17th century
— Kostas \U0001f468\u200d\U0001f4bc \U0001f4c8 \U0001f4b8 (@itsKostasWithK) January 13, 2021
How a pandemic, FOMO, and speculation made a flower worth the same as a mansion
/THREAD/ pic.twitter.com/ELoTlpW552
https://t.co/6o3A2IQCMs
List of Educational Threads on Financial Independence and Investing for Beginners#FinancialIndependence #financialeducation #financialfreedom #investing
— Kostas \U0001f468\u200d\U0001f4bc \U0001f4c8 \U0001f4b8 (@itsKostasWithK) January 3, 2021
1/ Financial Freedomhttps://t.co/8j5KG5ioFK
More from Kostas 👨💼 📈 💸
If you want to become financially independent and don't know where to start, here is a thread that will help you get started
/THREAD/
1. Review your expenses and make a budget
It will help you see where you overspend, make a plan to save, pay down debt and start
2. Set your investing and retirement goals
How much do you need to support yourself in retirement and when do you want to
3. The earlier you start investing, the better.
Here's why and how time and compounding can become your
4. Invest in an index fund
It's easy, safe, cheap, and the best choice for a beginner in investing, with not much time for
/THREAD/
1. Review your expenses and make a budget
It will help you see where you overspend, make a plan to save, pay down debt and start
Budgeting, the 50-30-20 rule, and the envelope method
— Kostas \U0001f468\u200d\U0001f4bc \U0001f4c8 \U0001f4b8 (@itsKostasWithK) January 6, 2021
Your first step towards financial independence
/THREAD/ pic.twitter.com/Tmuc3Itca5
2. Set your investing and retirement goals
How much do you need to support yourself in retirement and when do you want to
The most important number for your retirement: The 4% rule
— Kostas \U0001f468\u200d\U0001f4bc \U0001f4c8 \U0001f4b8 (@itsKostasWithK) January 7, 2021
What Is the Four Percent Rule?
/THREAD/ pic.twitter.com/8n1R1UZI5c
3. The earlier you start investing, the better.
Here's why and how time and compounding can become your
The Miracle of Compound Interest and the Rule of 72
— Kostas \U0001f468\u200d\U0001f4bc \U0001f4c8 \U0001f4b8 (@itsKostasWithK) January 2, 2021
//THREAD// pic.twitter.com/AOqd3kL6cn
4. Invest in an index fund
It's easy, safe, cheap, and the best choice for a beginner in investing, with not much time for
Jack Bogle, the Father of Indexing
— Kostas \U0001f468\u200d\U0001f4bc \U0001f4c8 \U0001f4b8 (@itsKostasWithK) January 8, 2021
How John "Jack" Bogle's creation impacted investors more than Bill Gates, Steve Jobs, and Warren Buffett combined
/THREAD/ pic.twitter.com/4wPi8x3cXn
The Mother of All Squeezes
How Volkswagen went from being on the brink of bankruptcy to the most valuable company in the world in two days
/THREAD/
1/ At the peak of the 2008 financial crisis, Volkswagen was considered a very likely candidate for bankruptcy.
Heavily indebted and already financially struggling before 2008, with car sales expected to plummet due to the ongoing global crisis.
2/ With GM and Chrysler filing for bankruptcy in 2009, shorting the VW stock would seem a safe bet.
If you are not familiar with stock shorts and short squeezes check my thread
3/ On October 26, 2008, Porsche announced it had increased its stake at VW from 30% to 74%.
This was a surprise to many who were led to believe that Porsche wasn't planning a takeover of VW, based on the company's announcements.
4/ Before the announcement, the short interest was approximately 13% of the outstanding shares, a number considered relatively low.
Porsche had a 30% stake, the Lower Saxony government fund held 20% of the shares, and another 5% was held by index funds.
How Volkswagen went from being on the brink of bankruptcy to the most valuable company in the world in two days
/THREAD/
1/ At the peak of the 2008 financial crisis, Volkswagen was considered a very likely candidate for bankruptcy.
Heavily indebted and already financially struggling before 2008, with car sales expected to plummet due to the ongoing global crisis.
2/ With GM and Chrysler filing for bankruptcy in 2009, shorting the VW stock would seem a safe bet.
If you are not familiar with stock shorts and short squeezes check my thread
Shorts, Squeezes, and Betting Against Stocks
— Kostas on FIRE \U0001f525 (@itsKostasOnFIRE) January 27, 2021
What is short selling, how is it used and why is it risky?
/THREAD/ pic.twitter.com/PyDd208hFe
3/ On October 26, 2008, Porsche announced it had increased its stake at VW from 30% to 74%.
This was a surprise to many who were led to believe that Porsche wasn't planning a takeover of VW, based on the company's announcements.
4/ Before the announcement, the short interest was approximately 13% of the outstanding shares, a number considered relatively low.
Porsche had a 30% stake, the Lower Saxony government fund held 20% of the shares, and another 5% was held by index funds.
More from Bitcoin
I have a different take on bitcoin, tether, and dollars
Can also speak with authority on nation state violence
"Nothing makes you feel more free than taking another person's freedom"
and @profplum99 concerns with tether, bitcoin, and decentralization make sense yet I remain long BTC
They are correct on force, I worked in decentralized societies, they are dangerous because the state does not have a monopoly on violence
For those in the first world who have never seen a milita ride out of the desert, kill and enslave farmers, and the government cannot stop it because the 21st century slave trade pays better than the UN, the reality of decentralization is might equals right
I know, that isn't the decentralized future Buterin talks about while wearing a t-shirt with a cat fighting space invaders on it (love those shirts)
But we need to be real, disrupting the global centralized economy won't be like Uber putting taxis out of work
It will be war and faminine level disruption as old empires come alive again
For decentralization to rise the centralized global power of the last 70 years (US Hegemony) has to weaken
Yes we will be rich, but as the Big Short says,
"you can be happy, just don't fucking dance"
Can also speak with authority on nation state violence
"Nothing makes you feel more free than taking another person's freedom"
After much investigation and conversations with people on here, I\u2019ve formed a relatively robust theory of what may be happening with Tether.
— Travis Kimmel (@coloradotravis) January 18, 2021
This thread will attempt to lay it out with neutral language for the purpose of discussion.
1/
and @profplum99 concerns with tether, bitcoin, and decentralization make sense yet I remain long BTC
They are correct on force, I worked in decentralized societies, they are dangerous because the state does not have a monopoly on violence
For those in the first world who have never seen a milita ride out of the desert, kill and enslave farmers, and the government cannot stop it because the 21st century slave trade pays better than the UN, the reality of decentralization is might equals right
I know, that isn't the decentralized future Buterin talks about while wearing a t-shirt with a cat fighting space invaders on it (love those shirts)
But we need to be real, disrupting the global centralized economy won't be like Uber putting taxis out of work
It will be war and faminine level disruption as old empires come alive again
For decentralization to rise the centralized global power of the last 70 years (US Hegemony) has to weaken
Yes we will be rich, but as the Big Short says,
"you can be happy, just don't fucking dance"
The defi matrix
As each asset class goes on-chain, it can be stored in a digital wallet. And it can be traded against other such assets. Not just cryptocurrencies, but national digital currencies, personal tokens, etc.
We’re about to enter an age of global monetary competition.
The defi matrix is the table of all pair wise trades. It’s the fiat/stablecoin pairs, the fiat/crypto pairs, the crypto/crypto pairs, and much more besides.
Uniswap-style automatic market making for everything. Every possession you have, constantly marked to market by ~2040.
More liquidity, less currency?
This is an interesting point. Cash doesn’t make you money. In fact, it can lose you money in an inflating environment.
Reliable, 24/7 mark-to-market on everything is hard — but if achieved, means less % of assets in cash.
AMMs boost BTC. Here's why.
- All assets trade against all assets in the defi matrix
- Automated market makers give liquidity for rare pairs
- Everything is marked-to-market 24/7
- Value of cash drops, as you can liquidate instantly
- The new no-op is to keep your assets in BTC
Basically, automated market makers like @Uniswap boost BTC in the long term, because they allow *everything* to be priced in BTC terms, and *anyone* to switch out of BTC into their asset of choice.
Though in practice this may mean WBTC/RenBTC [or ETH!] rather than BTC itself.
As each asset class goes on-chain, it can be stored in a digital wallet. And it can be traded against other such assets. Not just cryptocurrencies, but national digital currencies, personal tokens, etc.
We’re about to enter an age of global monetary competition.
The defi matrix is the table of all pair wise trades. It’s the fiat/stablecoin pairs, the fiat/crypto pairs, the crypto/crypto pairs, and much more besides.
Uniswap-style automatic market making for everything. Every possession you have, constantly marked to market by ~2040.
More liquidity, less currency?
This is an interesting point. Cash doesn’t make you money. In fact, it can lose you money in an inflating environment.
Reliable, 24/7 mark-to-market on everything is hard — but if achieved, means less % of assets in cash.
Thus less use for currencies as people can more easily store their wealth into assets and easily trade them.
— Pierre-Yves Gendron (@pierreyvesg7) February 24, 2021
AMMs boost BTC. Here's why.
- All assets trade against all assets in the defi matrix
- Automated market makers give liquidity for rare pairs
- Everything is marked-to-market 24/7
- Value of cash drops, as you can liquidate instantly
- The new no-op is to keep your assets in BTC
Basically, automated market makers like @Uniswap boost BTC in the long term, because they allow *everything* to be priced in BTC terms, and *anyone* to switch out of BTC into their asset of choice.
Though in practice this may mean WBTC/RenBTC [or ETH!] rather than BTC itself.
You May Also Like
I like this heuristic, and have a few which are similar in intent to it:
Hiring efficiency:
How long does it take, measured from initial expression of interest through offer of employment signed, for a typical candidate cold inbounding to the company?
What is the *theoretical minimum* for *any* candidate?
How long does it take, as a developer newly hired at the company:
* To get a fully credentialed machine issued to you
* To get a fully functional development environment on that machine which could push code to production immediately
* To solo ship one material quanta of work
How long does it take, from first idea floated to "It's on the Internet", to create a piece of marketing collateral.
(For bonus points: break down by ambitiousness / form factor.)
How many people have to say yes to do something which is clearly worth doing which costs $5,000 / $15,000 / $250,000 and has never been done before.
Here's how I'd measure the health of any tech company:
— Jeff Atwood (@codinghorror) October 25, 2018
How long, as measured from the inception of idea to the modified software arriving in the user's hands, does it take to roll out a *1 word copy change* in your primary product?
Hiring efficiency:
How long does it take, measured from initial expression of interest through offer of employment signed, for a typical candidate cold inbounding to the company?
What is the *theoretical minimum* for *any* candidate?
How long does it take, as a developer newly hired at the company:
* To get a fully credentialed machine issued to you
* To get a fully functional development environment on that machine which could push code to production immediately
* To solo ship one material quanta of work
How long does it take, from first idea floated to "It's on the Internet", to create a piece of marketing collateral.
(For bonus points: break down by ambitiousness / form factor.)
How many people have to say yes to do something which is clearly worth doing which costs $5,000 / $15,000 / $250,000 and has never been done before.
