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Yeah, I mean. What is this if not academic clickbait??
But Will is clever with this, having made much of a career from writing about bitcoin academically and professionally as an economist; find instances of where an economist's quantitative tools are fit for purpose to bitcoin; run the regressions; publish the paper.
Anyway, in "Pornhub and the Value of Bitcoin," Will uses a before-and-after device common in economics called "difference-in-difference."
Analytically, it's not that impressive and basically always hinges on whether or not we believe that the two things were/should/would have continued to move similarly if not for the intervention (we don't; these are groups of shitcoins; given the widely believed Bitcoiner conviction that they all trend to zero, this type of grouping would automatically show a delta between the bitcoin group and the non-bitcoin group). A standard objection to this method is "I don't believe your common trends assumption."
Now, having said that, Will identifies the Pornhub ban of payment processors in December 2020. Not sure you guys remember, but it was all the news rage/debanking rage for like a half-dozen news cycles. After social pressures, Pornhub were shut out from Visa and MC, and started taking crypto payments.
Will thinks of this as a marketing ploy or use case illustration that accrue permanent value to bitcoin. If you're not allowed to pay or receive payment, if your payments are blocked, or you fiat asset seized, you call still use this mechanism for moving online value.
I consider the extent to which deplatforming Pornhub increased the value of bitcoin and other cryptocurrencies accepted on the site ... I find that deplatforming Pornhub increased the market capitalization of cryptocurrencies accepted on the site by 21.0 percent. ... I find that deplatforming Pornhub increased the market capitalization of bitcoin by 45.7 percent.
The mechanism/story here is exactly that: by showcasing its uncensorableness, the Pornhub episode revealed permanently to much more people how/why/whatfor bitcoin is so good.
Thus:
Prior to December 2020, few people realized an online retailer might be cut off from the traditional payments system without a government requiring it. The decision of Visa, MasterCard, and Discover to deplatform Pornhub made it clear this was possible. To the extent that deplatforming Pornhub was unexpected, one might treat this event as a natural experiment and estimate its effect on the value of bitcoin and other cryptocurrencies accepted on the site.
Obviously, we could run similar type of exercises for a few other such events: Canadian truckers or seizing Russia's reserves. Those were all alarm bells marketing the virtues of bitcoin to larger audiences.
Maybe those papers are already in the pipeline on some aspirational PhD student's computer.
It's says accepting Cryptocurrency, not only Bitcoin, so how significant it's on Bitcoin front can't be said if we don't have actual numbers.
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53 sats \ 1 reply \ @Shugard 14 Feb
Rub one out for the next bitcoin pump!
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TMI 😆
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On the common trends point, it doesn't really matter if the basket containing bitcoin was trending the same way as the other basket (in the sense people would usually think of). It's easy enough to include a time trend in the regression to account for different trend lines.
The point is that the debanking date is only relevant to the bitcoin basket and was not relevant to anything related to the other basket. Now, that assumption is very problematic, since crypto prices are not likely to be independent from each other.
One robustness check to run is just doing the same regression with a bunch of other random dates to see if the result is still there.
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Alrightsy, alrightsy. Above my metrics paygrade... It did have my alarm bells go off when he merged all those shitcoins w BTC to create one indicator. Not lovely
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I haven't looked into his methods, but that wouldn't be the thing that gave me pause.
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I think if he really wants to prove his point while also addressing @denlillaapan's concerns, he'd create a basket of everything Phub accepts, excluding bitcoin, and compare it to the basket of shitcoins that Phub didn't accept.
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then nobody would read the paper, haha.
Nobody cares about shitcoins; bitcoin makes it a juicy paper!
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He should've made 3 plots:
  • Bitcoin
  • shitcoins accepted by Phub, excluding bitcoin)
  • shitcoins not accepted by Phub
I agree, since the headline takeaway is about the effect on Bitcoin, not a bundle of random crap that includes bitcoin.
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27 sats \ 1 reply \ @Cje95 14 Feb
As someone who is well built different and reads scientific papers for fun this is absolutely hilarious and I love it! Make scientific papers fun and interesting! lmao
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There are some that try to analyse the macroeconomics of Harry Potter or the trade relations in Tolkien.
Those are hilarious!!
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The only positive about debanking is that it makes bitcoin necessary to make payments. People usually need a little kick in the ass to figure things like bitcoin out.
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