Bitcoin is mined. The amount of Bitcoin increases steadily over time according to the dictates of an algorithm, and new coins go to the lucky folks who successfully solve a difficult problem on their computer. You don't have to pay anyone for the coins.
But Donald Trump's meme coins are different, something I didn't fully appreciate when I wrote about them yesterday. New coins are created by Trump (or, more accurately, his agents) and then sold to the public on a set schedule over 36 months:
Note that although Trump companies will eventually own 80% of the coin supply, currently they own nothing. The initial 200 million coins are split between public distribution and liquidity. I assume that "public distribution" refers to the coins being sold on the website and "liquidity" refers to coins owned by the initial investors. But who are these investors?
Looks like the creator of the Trump memecoin was seeded by deposits from Gate and Binance. These two exchanges do not allow US residents pic.twitter.com/D8fOMcb7oR
— Conor (@jconorgrogan) January 18, 2025
Trump memecoin creator added $40M in single-sided liquidity and deposited 80% of supply into a multisig pic.twitter.com/oKxOtiF50D
— Conor (@jconorgrogan) January 18, 2025
The initial investors were given 10 million coins for about $40 million, or $4 per coin. Were these investors Binance and Gate.io? That's not clear. But whoever it is, they've already made a paper fortune since those coins have no lockup and are currently worth about $650 million (as of this writing $TRUMP is trading around $65).
As for "public distribution," who gets the money for selling this initial supply? That's not clear either. However:
Trump's team has made at least $58M in trading fees alone, from what I can tell.
They've layered in multiple of single-sided positions, most of which are out-of-range. Their remaining position yields ~$15m+ a day based on current APRs pic.twitter.com/HZbeYw1tl7
— Conor (@jconorgrogan) January 18, 2025
Grogan also reports that about $500 million in coins has been sold so far; $20 million was sent to Bybit, an offshore exchange; and the liquidity wallet is withdrawing liquidity. This is mysterious, and it seems to be mysterious to Grogan as well—and he's an expert.
Because this is cryptocurrency and isn't regulated by the SEC, everything is private by design and it's hard to suss out what's really going on. In other words, it's a perfect vehicle for essentially bribing Trump without anyone ever being able to know it. It's no wonder Trump did a U-turn and became a big fan of cryptocurrency last year. Someone must have explained the personal wealth possibilities to him.
I'm sure there's more to come. It will just take some sleuthing.
Creating wealth without producing anything of value. The dream of everyone.
Tulip trading, for sure.
You could put gold mining in the same category. Sure, a little bit is used in electronics but mostly it is used for bling and Panda coins, nonessential yet desired products that artificially increase the value of gold.
What he's creating is an avenue for bribery. Apparently, making a few paltry million through his hotels isn't enough. Now anyone suffering the effect of tariffs or mass deportations can get a "national security" exemption if he buys enough of these coins. And since he's immune from criminal prosecution and the Republican dominated congress will NEVER vote to impeach no matter what he does, he's free to flaunt it, even.
I read this hoping to for once understand what cryptocurrency actually is. I understand less today than yesterday. Except for one thing.
The original cryptocurrency Bitcoin seems to be multilevel marketing for nerds. Trump's meme coin is multilevel marketing for idiots. I say this a the parent of a son who owns 13 Bitcoins and is quite wealthy on paper. I just hope he gets out with some of the money. He should, he bought the first 10 Bitcoins for $100 each.
At least Bitcoins represent some effort to mine and so might be said to have some value. These are magically created with the wave of a hand over a keyboard. It's graft, pure and unadulterated.
A while back there was a game show (can't recall which one) where at the end they had a chamber with money blowing around and the contestant had a set amount of time to grab all they could. Reminds me of Trump.
"At least Bitcoins represent some effort .."
Which conributes to global warming (and increase electricity prices in some places).
You could say the same for steelmaking, cement-making and a whole host of other industries. Also the internet and hosting services on which we're chatting.
Steelmaking results in steel. Cement-making creates cement. Now tell me what bitcoin creates. I'll wait.
Alas, that "mining" does nothing of value. It doesn't even "produce" a bitcoin, one is just awarded to those who finish the calculation first. The product of the calculation is irrelevant.
I thought I had some minor amount of understanding of what Bitcoin is but with this new Memecoin stuff I’m totally lost. But I note that for some reason Melania now has her own Memecoin which I suppose means she is something other than a “Trump”. Or will there also be a “TheDonald” coin?
It’s all so weird that I can’t keep up.
Kevin’s gloss is basically correct. It’s a digital bribery app, full stop.
“Someone must have explained the personal wealth possibilities to him.”
Kevin made a joke.
As the internet made review of more and more information possible, liberal thought has become more and more analytical, including internal analytical disputes within the Dem party.
It left a gap —- “who is marketing to morons?”. Or to be more kind, “who is marketing to the non-analytical among us?”.
The repubs have just walked right into this gap. Nature abhors a vacuum. And there are plenty of voters who would think. like Sean Connery in SNL Jeopardy, that “abhors” are prostitutes who do a lot
of crunches.
And weekly on this blog we wonder how people, millions of them, could be so stupid.
Maybe there would be more elections won if we allocated some of the budget to the dumb.
I think you are both too harsh on people who've chosen a really bad source of news and way too congratulatory upon lefties. We've become "too analytical"?? And the "morons" just can't follow?
More like, the left has lost the ability to communicate outside the ivory tower. Use of the latest lib-arts proto-progressive duckspeak, for example. But even more significantly, Democrats need to resume being able to appeal to people's emotions. Their good emotions - the better angels of their nature.
For example, it's crazy to counter GQP hate-the-immigrant policies with even harsher policies. Why not take the tack that immigrants built America? Continue on talking about what it takes to walk hundreds, even thousands of miles to get here: what kind of a person would even try that? Note how limited our current immigration laws are, how few they let in, when they were last updated. Note that we need new Americans to build a strong unified America in the 21st century, because we're not getting any younger.
And then outline a policy that explodes the old limits, provides adequate staffing at the border to help people in. Volume II could also discuss what to do about "the illegals" like DACA folks -- and giving them a leg up.
How hard is that? And it fits with Democratic values and strives to appeal to peoples' better natures. Going high, when the opposition slinks along in the gutter.
You forgot to mention that "mining" for Bitcoins uses a tremendous amount of energy, equivalent to the energy used by New Zealand. That energy goes mainly into heat to help keep our planet warm (that's sarcasm). The miners pay for the electrical energy they use and mostly waste, but the game is a statistical one, and you tilt the odds of winning in your favor by using more computer power and that means more energy. In short, Bitcoin mining is terrible for the planet and everyone and every animal who lives on it.
".. into heat .."
The direct heat isn't such a problem, the problem is the CO2 that is generated while producing the energy and goes in the atmosphere and helps heating the earth for a long time.
If we are going to split a penny's worth of hair, might as well split a pound's. CO2 doesn't help heat the Earth. It helps the Earth retain heat.
It is not penny, because because from the original text you may get the impresion that if the energy is used for other purposes, like moving something, then it doesn't contribute to global warming.
The different between "retain heat" and "heating" really is splitting hair. I think in any situation when something "retains heat" in the sense used here, people will also agree that it "heats".
Trump has arrogated the powers of the sovereign state. This is his version of issuing a trillion dollar platinum coin.
The man will be president of the United States this time tomorrow and there's no time to talk about what it will mean for the American people (or even Greenland and Panama anymore). It's all about the unfathomable riches that the man will rake in. What a fucking shitshow this country has become.
Between the billions from the meme coin and "maybe trillions" from the TikTok deal (spoiler: it's grift, folks), he may never have to struggle on the bottom rungs of the Forbes 400 again!
The United States of America that you that you learned about in school and lived in all your life is over.
+1
Maybe the silver lining in this is that Trump will not bother to deport everybody, or prosecute everybody, or charge everybody extortionate tariffs, because he'll focus instead on looting the treasury and stealing from the Magats. All that retribution stuff is hard. Everyone will wear a Trump watch and play "God Bless the USA" on a Trump guitar. Keep on rockin'. . .
Kevin, like many economists, keeps looking for signs of impending recession in the standard economic indicators, such as unemployment. But really bad recessions are caused by financial crashes due to overextension. And what often signals that overextension, based on overconfidence, is the growth of asset bubbles - putting money into things that have limited or no real value. At least the housing bubble had some real houses at its basis, but now with crypto and "meme coin" we seem to be getting into tulip and South Seas territory.
The Trump administration may not follow through on tariffs or deportation, but they are sure to be deregulating and actively creating asset bubbles.
Pedantry incoming: it wasn't a housing bubble, it was a financial bubble that just happened to use housing as the primary asset to inflate the bubble.
Indeed, created by Alan Greenspan himself slashing interest rates to nothing after 9-11. Capital flowed into housing like a river after that
Exactly. As Bill Maher says "We Americans always overdue things" and we will overdue Crypto. And when that happens by 2027, and the market tanks for whatever reason and those MAGGOTS come crawling to Congress begging for a bailout, I hope enough Dems will be there to say "You want your money back? Go talk to Donald Trump, he's got your money! But you will not get a dime of taxpayer money to bail your ass from the Ponzi scheme you willingly invested in."
Trumps ultimate dream, to grift without fear of any and all reprecussions or consequences. Thanks to our conservative extremist majority SCOTUS.
Once billionaires bottom out the US economy American money will be worthless and the only money will be whatever cryptocoin they have on hand which will be worth whatever they say it's worth, whether anyone else will believe it or not.
Faith is important. If you don't believe in faith what do you believe in?
It should be noted that you have to jump through a bunch of hoops if you're a US resident to be able to purchase this (because it's not directly traded on any of the platforms that are easy to trade on in a US-based web browser). It's not impossible, but it's not something most of the MAGAts are going to be capable of doing. You have to set up a crypto wallet that requires either additional browser plugins or a USB key for logging in or both, and then connect that wallet to one of the exchanges that actually has the Mango's memecoin listed and will connect to your real-life money so you can deposit, and so on... As someone who dabbled in memecoins in 2020-21, it's kind of a lot of effort to get set up.
This is mostly about bringing in foreign money, not just to Trump but to those who are capable of buying the "currency" within the US. It's just another run-through of DOGE, SHIBA, and other memecoins. Whales will get in early, a bunch of plebes (or in this case, foreign entities) will pile on, then the whales will get out while selling theirs to other plebes (or foreign entities) and the price crashes.
TBH, I can't say I wasn't tempted to jump through the hoops yesterday. I guess I should have - I could've basically doubled my money in a day. Granted, I would've only done it with like $500 because I'm not a fool like some of the idiots I see being highlighted on reddit who've put in their life savings... and while having $500 more today than I had yesterday would be great, it's just not worth the effort and the ickiness.
The Effort and the Ickiness would be a great title for a book about about cryptocurrency.
Bitcoin and all cryptographic currencies enjoy (if that's the right term) the ability to move money, real money, without governmental oversight or interference. You might think for a minute about who would want that kind of freedom from oversight. It's used by criminals for nefarious purposes. Honorable people don't get involved, period.
I took a Bitcoin course online in 2017 and learned enough to stay away from Bitcoin. However, I did "in principle" buy a Bitcoin in December of 2017 and another a couple of years ago. Every day I test my IRR algorithm using a spreadsheet. Today I am up over 35% -- on paper. Happy and above board in Boulder, CO.
Dunning Kugerands
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"...new coins go to the lucky folks who successfully solve a difficult problem on their computer."
I really wish that journalists and pundits would stop saying this. It is not a "difficult" problem to solve, it just requires a particularly resource intensive algorithm.
Here is how it works:
Take the data from the latest block.
Add a small amount of random data.
Run it though a hashing algorithm.
See if the results starts with 19 zeroes.
If it does, congratulations! you won.
If not, repeat the above.
It's the simplest, stupidest, most useless mathematical algorithm one could imagine. Calling it a "difficult mathematical problem" obscures this fact.