Author Topic: Is it too late [bitcoin]?  (Read 14752 times)

MrThatsDifferent

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Is it too late [bitcoin]?
« on: November 16, 2017, 09:47:45 PM »
Ughhh, my friend is obsessed with bitcoin and I was this close to investing $3k as experiment money in August but I didnít because I set a goal for my Vanguard account ($100k) and havenít reached that yet. Now Iím kinda kicking myself and wondering if I should invest now or leave the game to the more fearless? (I still wouldnít invest more than $3k max).  If I donít do it, will I be regretting it in 5 years?

Indexer

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Re: Is it too late [bitcoin]?
« Reply #1 on: November 16, 2017, 10:11:58 PM »
Some people here love it...  I think avoiding it is best.

The last conversation I had with someone on here ended with the mutual conclusion that bitcoin has no intrinsic value, but they still wanted to keep buying it. To me no intrinsic value = $0 value. [shrug]

oldladystache

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Re: Is it too late [bitcoin]?
« Reply #2 on: November 16, 2017, 10:31:47 PM »
Maybe.

I kicked myself a long time then jumped in a few months ago. Tripled my money so far. But if it all goes away it won't hurt me.

Llewellyn2006

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Re: Is it too late [bitcoin]?
« Reply #3 on: November 16, 2017, 10:55:22 PM »
I'd be more confident of a crash in Bitcoin than I would be about a crash in the stock market

cantgrowone

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Re: Is it too late [bitcoin]?
« Reply #4 on: November 16, 2017, 11:27:37 PM »
I will never put my cash in BTC, but I do mine it and plan to hold onto the little BTC I have.

As always, only invest what you can afford to lose.
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shadow

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Re: Is it too late [bitcoin]?
« Reply #5 on: November 16, 2017, 11:38:11 PM »
I'm no longer in bitcoin, so I can't speak for it.

I do have some questions though: Why bitcoin and why now? Do you think 8k is the best price to get in at or do you expect a correction? Do you feel confident enough in it to hold through volatility and contradicting sources of information? Do you think it will be able to effectively scale second layer? Compare it with its forked counterpart, bitcoin cash. If you're still keen on bitcoin, I would not recommend more than $1k. Crypto has significant risk (depending on your entry amount; in your case, it's minor) and you should diversify into at least one or two other crypto.

Look through coinmarketcap.com and read up on other coins. If you're not already aware; included in the definition of cryptocurrency is that it is decentralized (protects against double-spend), with inherent costs and incentives to achieve consensus (currently proof-of-work and proof-of-stake systems). Not all the coins listed meet this criteria. Just something to be aware of. Permissionless vs permissioned; censor-resistant versus alteration; true financial sovereignty vs central control. The aspects of one is more valuable than the other.

The two that I would recommend researching are ethereum and omisego. Both have (or will have) extreme utility.

Omisego (omg), once it goes live (expected 2nd qtr 2018), will be a blockchain that aims to implement plasma, with smart contract enforcement through ethereum. The ambition of plasma is to scale transaction levels to millions per second, instantly and with low fees. It will be a decentralized exchange as well as a payment network, among other things. More than 5,000 merchants that conduct operations through omise will shift to the omisego blockchain. There will be fiat gateways. Potentially, it could be listed on gdax (https://www.gdax.com/static/digital-asset-framework-2017-11.pdf). Gdax is an offshoot of coinbase. Omg currently has a small cap, with promising opportunity for significant returns. If you own omg and stake it, you will receive a portion of the transaction fees.     

Ethereum's (eth) underlying premise is that it is decentralized computational power. You can use it as peer-to-peer cash, or to pay network fees to gamble, or to buy into icos, or to set up smart contracts or some other instructions. The future holds immense possibilities, with dapps that will eclipse our imagination. Something that is a type of fuel, energy, power; what can you do with it? Throw in zero-knowledge proofs (you can prove you know a secret without revealing it). Ethereum solves and will solve mathematical problems that have immense real-world applicability. The internet, with cryptography, improved quality of life; blockchain tech will do the same, with a financial basis.









Llewellyn2006

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Re: Is it too late [bitcoin]?
« Reply #6 on: November 16, 2017, 11:43:21 PM »
I'm no longer in bitcoin, so I can't speak for it.

I do have some questions though: Why bitcoin and why now? Do you think 8k is the best price to get in at or do you expect a correction? Do you feel confident enough in it to hold through volatility and contradicting sources of information? Do you think it will be able to effectively scale second layer? Compare it with its forked counterpart, bitcoin cash. If you're still keen on bitcoin, I would not recommend more than $1k. Crypto has significant risk (depending on your entry amount; in your case, it's minor) and you should diversify into at least one or two other crypto.

Look through coinmarketcap.com and read up on other coins. If you're not already aware; included in the definition of cryptocurrency is that it is decentralized (protects against double-spend), with inherent costs and incentives to achieve consensus (currently proof-of-work and proof-of-stake systems). Not all the coins listed meet this criteria. Just something to be aware of. Permissionless vs permissioned; censor-resistant versus alteration; true financial sovereignty vs central control. The aspects of one is more valuable than the other.

The two that I would recommend researching are ethereum and omisego. Both have (or will have) extreme utility.

Omisego (omg), once it goes live (expected 2nd qtr 2018), will be a blockchain that aims to implement plasma, with smart contract enforcement through ethereum. The ambition of plasma is to scale transaction levels to millions per second, instantly and with low fees. It will be a decentralized exchange as well as a payment network, among other things. More than 5,000 merchants that conduct operations through omise will shift to the omisego blockchain. There will be fiat gateways. Potentially, it could be listed on gdax (https://www.gdax.com/static/digital-asset-framework-2017-11.pdf). Gdax is an offshoot of coinbase. Omg currently has a small cap, with promising opportunity for significant returns. If you own omg and stake it, you will receive a portion of the transaction fees.     

Ethereum's (eth) underlying premise is that it is decentralized computational power. You can use it as peer-to-peer cash, or to pay network fees to gamble, or to buy into icos, or to set up smart contracts or some other instructions. The future holds immense possibilities, with dapps that will eclipse our imagination. Something that is a type of fuel, energy, power; what can you do with it? Throw in zero-knowledge proofs (you can prove you know a secret without revealing it). Ethereum solves and will solve mathematical problems that have immense real-world applicability. The internet, with cryptography, improved quality of life; blockchain tech will do the same, with a financial basis.

Apart from your first sentence I didn't understand a word of what you have written. Which is exactly why I would stay away from crypto currencies.

MrThatsDifferent

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Re: Is it too late [bitcoin]?
« Reply #7 on: November 17, 2017, 03:15:50 AM »
ETH is the one I was thinking about as I like the idea of blockchains that have real world applications.

L.A.S.

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Re: Is it too late [bitcoin]?
« Reply #8 on: November 17, 2017, 06:27:54 AM »
Avoid cryptos at all cost.

If you have 3K burning a hole in your pocket, take a vacation.  Or hell, go to a casino.  At least a casino you will get some comped drinks and a trip to the buffet.

KBecks

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Re: Is it too late [bitcoin]?
« Reply #9 on: November 17, 2017, 06:40:03 AM »
This crossed my mind and then I thought -- let's say I have $7,000 laying around.  Do I really want a Bitcoin most of all with that money, or are there other ways that money can be used that would be more beneficial? 

I am not a speculator.  If I bought into bitcoin or other crypto it would be for diversification, but I'm happy with my investments now.  I would be buying out of greed or fear and neither is a good reason.

I need to learn a lot more about crypto before thinking about putting any cash into it.
« Last Edit: November 17, 2017, 06:44:40 AM by KBecks »

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Re: Is it too late [bitcoin]?
« Reply #10 on: November 17, 2017, 07:06:50 AM »
Ughhh, my friend is obsessed with bitcoin and I was this close to investing $3k as experiment money in August but I didnít because I set a goal for my Vanguard account ($100k) and havenít reached that yet. Now Iím kinda kicking myself and wondering if I should invest now or leave the game to the more fearless? (I still wouldnít invest more than $3k max).  If I donít do it, will I be regretting it in 5 years?

Most of the answers you've gotten have focused on why bitcoin is or isn't a good investment. Let's put that aside.

My personal rule of thumb is to never buy something when my motive is that it already went up a lot in price and I'm kicking myself for not buying it earlier. If that's why you want to invest, whether it is in bitcoin, or amazon stock, or san francisco real estate -- I've seen lots of similar "is it too late" threads about buying houses out there -- I'd not suggest putting your money in.

I own a bit of bitcoin, but I do because it was fun to figure out how to buy it, and how to use it, and actually using it to make purchases. If it goes to zero, that's okay, I consider what I've put in hobby spending, not part of my investments or net worth.
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Enigma

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Re: Is it too late [bitcoin]?
« Reply #11 on: November 17, 2017, 07:18:24 AM »
I have a coworker that was talking about buying into bitcoin yesterday.  I am still on the fence about it.  Probably wont buy into the hype myself.  Maybe it will go somewhere but idk.
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surfhb

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Re: Is it too late [bitcoin]?
« Reply #12 on: November 17, 2017, 09:15:37 AM »
This kind of thing goes directly OPPOSITE to what this blog is about and what brings people here for discussions.   That said,  basically greed is at the root of your upcoming decision. 

This is your life weíre talking about.   I donít think itís wise to use even ď play moneyĒ (whatever that is) to speculate.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #13 on: November 17, 2017, 09:19:22 AM »
I'm not going to debate the merits or downsides of bitcoin since there are plenty of threads on the forum so far that have done just that at great lengths. You can search for them and read through the discussions if you'd like.

What I will say is that, as with anything that you put money toward, it is always wise to learn as much about whatever it is as possible. So if you don't know what bitcoin is or how it works, then my advice is to learn about it as much as you can before you put your money anywhere. Here is an excellent video that I always refer people to that explains how bitcoin works and digs into some of the technical side of things in a way that anyone can understand. I hope it helps your understand of bitcoin.

https://www.youtube.com/watch?v=bBC-nXj3Ng4

Cromacster

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Re: Is it too late [bitcoin]?
« Reply #14 on: November 17, 2017, 09:29:08 AM »
I will never put my cash in BTC, but I do mine it and plan to hold onto the little BTC I have.

As always, only invest gamble what you can afford to lose.

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« Last Edit: November 17, 2017, 09:32:15 AM by Cromacster »
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dougules

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Re: Is it too late [bitcoin]?
« Reply #15 on: November 17, 2017, 11:08:10 AM »
Bitcoin is not an investment.  It's a form of cash, and really unstable one at that.  It's only an investment if you're mining or in some kind of interest-bearing account.  Otherwise there's no actual return, and it's just gambling with the exchange rates. 

I wouldn't put any money in bitcoin unless I was either planning to start buying things with it or it was just fun money that I'd be willing to take to a casino. 

GGNoob

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Re: Is it too late [bitcoin]?
« Reply #16 on: November 17, 2017, 12:19:33 PM »
I got in late, about 6 weeks ago. Invested in both Bitcoin and Ethereum, the percent of each based on market cap. I'm up around 25-30% so far.

I didn't buy crypto at first because 1) I felt it was too late to become so rich I could FIRE off of the investment and 2) because I figured even if I did buy, I wouldn't know when to sell and I'd probably sell it too soon and miss out on the chance to be too rich from it. But I recently decided I would hold it as a percentage of my portfolio. I first started at about 5% but as the price went up, I changed it to 10%. That's where I really wanted to be at first but didn't have enough cash to put that much in (most money is in tax-advantaged accounts). Now I figure I know when to buy and when to sell based on rebalancing my portfolio, so I was able to justify holding it that way. I don't expect to get rich from it, but I'm hoping it increases my overall return a little. If not, it's a small enough amount that I can lose it and shrug it off.
« Last Edit: November 17, 2017, 01:18:27 PM by GGNoob »

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #17 on: November 17, 2017, 12:45:05 PM »
I'm still waiting for my tulip bulbs to go back to their old highs.  Then I'll cash out and put it all into bitcoin.

caffeine

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Re: Is it too late [bitcoin]?
« Reply #18 on: November 17, 2017, 01:21:56 PM »
bitcoin is just one regulation away from being obsolete.

I'm surprised its taking so long for the US / EU to shutdown its trade.

frugledoc

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Re: Is it too late [bitcoin]?
« Reply #19 on: November 17, 2017, 01:36:09 PM »
Maybe, who knows, I'm definitely not interested.

Even if I could triple or quadruple my money I wouldn't be willing to put enough in to make a significant impact on my networth.

DS

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Re: Is it too late [bitcoin]?
« Reply #20 on: November 17, 2017, 01:38:22 PM »
Yes, it's too late :)

alexpkeaton

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Re: Is it too late [bitcoin]?
« Reply #21 on: November 17, 2017, 07:37:01 PM »
bitcoin is just one regulation away from being obsolete.

I'm surprised its taking so long for the US / EU to shutdown its trade.

There may be stupid regulations around it like New York and Hawaii's, but it won't be banned. The major investment banks have gotten on board so there's lobbying power to shape regulation in their favor.

FWIW, my asset allocation includes 4% to cryptocurrency, but I own 0 BTC. I have mostly ETH and intend to diversify into some other cryptocurrencies soon.

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Re: Is it too late [bitcoin]?
« Reply #22 on: November 17, 2017, 07:44:24 PM »
I'm still waiting for my tulip bulbs to go back to their old highs.  Then I'll cash out and put it all into bitcoin.

👍

gp_

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Re: Is it too late [bitcoin]?
« Reply #23 on: November 18, 2017, 12:24:26 PM »
Avoid cryptos at all cost.

why? because you don't understand them, and therefore look at them as not being wise investments? if most people attempted to learn about them with the same dedication as a "normal investment", you'd be more educated, and therefore see value where it exists. most ICO's serve no purpose (it's pointless for them to issue a token), but there are many that have a specific use case and are actually forward-thinking.

to the OP, i would suggest buying at least 1 BTC. you don't need to buy an entire BTC at once, but dollar cost average until you possess 1 if that's easier. there are BILLIONS of dollars flowing into cryptocurrencies right now (specifically BTC) and these are traditional hedge funds and other institutions. they aren't idiots...

YttriumNitrate

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Re: Is it too late [bitcoin]?
« Reply #24 on: November 18, 2017, 02:13:14 PM »
From my perspective, the current market for cyrptocurrencies sure feels a lot like tech stocks around 1998 or 1999. My guess would be that just like 1999, the real question is not whether or not it is too late to get into cryptocurrencies but which cryptocurrencies will survive the coming cull. Bitcoin is the current leader of the field, but so were America Online and Yahoo. My predictions for 10 years from now are: 80%+ of the current crypto currencies are defunct, bitcoin/ethereum are worth a fraction of their current value, and 1 or 2 cyrptocurrencies you haven't heard of today dominate the field.

surfhb

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Re: Is it too late [bitcoin]?
« Reply #25 on: November 18, 2017, 02:14:40 PM »
Avoid cryptos at all cost.

they aren't idiots...

Well, depends how you define the term.  :)     I'm anxious to see how the crypto market will do in the next correction and recession.   These are very good times!   They don't last forever....I hope the Gen Y / millennial crowd doesnt take this 10 year (yes....10 years!!) bull market for granted.....it will end eventually.   Just don't want to see you holding the hot potato ;)

From my 30+ years of investing,  I plan to stay away from such specialization.....Been there done that twice now.    I would be a much richer man if I had just invested in a simple index fund and spent my valuable time doing other things.   Not to mention the stress of huge price swings we see in the crypto markets.   
« Last Edit: November 18, 2017, 02:20:20 PM by surfhb »

Indexer

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Re: Is it too late [bitcoin]?
« Reply #26 on: November 18, 2017, 04:11:52 PM »
Avoid cryptos at all cost.

why? because you don't understand them, and therefore look at them as not being wise investments?...

...they aren't idiots...

The more I understand bitcoin the less interested in it I am. In addition, you can't 'invest' in bitcoin, because it isn't an investment. Investments pay dividends, income, share business profits, etc. Bitcoin's value is completely based on speculation. The price can go up and down, but at the end of the day no one has any clue what a bitcoin should really be worth. It's intrinsic value is $0.00. To me, that means it is worthless. Even tulips during tulipmania had an intrinsic value. It was very low... how many calories are in a tulip bulb if you ate it? It was still a positive number. If the markets decided bitcoins were worth $0 tomorrow, what could you do with a bitcoin? Nothing. 

Hedgefunds buying something doesn't mean anything. There are plenty of hedgefunds run by idiots. While most active funds underperform their benchmarks... hedge funds normally do even worse than active mutual funds. A hedgefund could buy bitcoin just for the talking point of owning Bitcoin, or they could be buying it for short term gains with the intention of dumping it. Bitcoin can be both a long term failure and a short term trading opportunity.

Billions of dollars flowing into something doesn't mean it's good. Adjusted for the current price of gold, a tulipmania era tulip would be worth over $650,000. Hundreds of billions flowed into tech bubble era tech stocks. Trillions were wrapped up in the housing bubble. If something is hot people will throw far more money at it than it is worth.
« Last Edit: November 18, 2017, 04:24:46 PM by Indexer »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #27 on: November 18, 2017, 04:57:32 PM »
The more I understand bitcoin the less interested in it I am. In addition, you can't 'invest' in bitcoin, because it isn't an investment. Investments pay dividends, income, share business profits, etc. Bitcoin's value is completely based on speculation. The price can go up and down, but at the end of the day no one has any clue what a bitcoin should really be worth. It's intrinsic value is $0.00. To me, that means it is worthless. Even tulips during tulipmania had an intrinsic value. It was very low... how many calories are in a tulip bulb if you ate it? It was still a positive number. If the markets decided bitcoins were worth $0 tomorrow, what could you do with a bitcoin? Nothing. 

Again, I'm not going to comment on whether bitcoin is a good investment, but I will reply to a comment that attempts to make a claim that bitcoin has no "intrinsic value". There are a lot of things that I could say that would demostrate the opposite, but to me this is one of its most important...

Zimbabwe had a government that hyper-inflated its own currency to unimaginable levels that made their currency useless. This left the country's own citizens desperate for a means to transact. The humanitarian impacts that this had were profound. By the time Zimbabwe's currency was denominated in the trillions, it left its citizens looking to foreign currencies to store their wealth and make purchases. However, this requires physical currency to flow into the country in crisis times like that and thus this option is not an adequate solution to protecting citizens from governments with corrupt monetary policies. Currently, Bitcoin is trading for $13,000 in Zimbabwe (approximately twice that of the rest of the world). Bitcoin's value to people in situations like this is immediately apparent. The reason is because all that is needed to own and transact with Bitcoin is a phone and an internet connection; something that is in much larger supply than trusted banks in countries like that. No identification is required and therefore Bitcoin does not discrimate.

Zimbabwe is a great example of the potential good (and thus intrinsic value) that bitcoin can provide to the citizens of the world. Zimbabwe may be one of the first prime examples of hyper-inflation in Bitcoin's lifetime, but it certainly won't be the last. Facebook has value because it possess a network effect among its millions of users. A network like bitcoin that possesses millons of users and consists of billions of dollars of wealth means that in times of crisis around the world, the network itself can provide relief to anyone without discrimination. This is bitcoin's intrinsic value and the longer it exists, the more apparent it will be. It might be difficult for people in America to realize this value since we have access to a dizzying amount of financial services, but it is value none-the-less to the billions of people around the world that don't.

In otherwords: people aren't transacting with Bitcoin because it has value. Bitcoin has value because people can transact with it.

I hope Bitcoin succeeds for this reason alone.
« Last Edit: November 18, 2017, 05:05:44 PM by lifeanon269 »

Raj

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Re: Is it too late [bitcoin]?
« Reply #28 on: November 18, 2017, 06:28:53 PM »
I would recommend not investing anything in Bitcoin that you aren't prepared to lose, I agree with YttriumNitrate, the current market is very unstable and while Crypto Technology's will probably still be around in the following decades, it's unlikely that Bitcoin and the other main suppliers will be the ones to reap the benefit. 

Like Yahoo being the first does not necessarily mean they will be the best.


FI4good

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Re: Is it too late [bitcoin]?
« Reply #29 on: November 19, 2017, 08:23:20 AM »
you might regret buying it, you might regret not buying it, none of us know the future.

FOMO ( fear of missing out ) is quite powerful in a bull market cycle, I'd always suggest questioning yourself as to your reasoning to deploy your hard worked for capital in this manner at this moment . Why ?   

My philosophy is to invest my excess capital into bright, clever people, working hard, doing good and interesting things . So for me bitcoin doesn't fit with my  philosophy.

I wish you luck if thats your thing though . 

Livewell

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Re: Is it too late [bitcoin]?
« Reply #30 on: November 19, 2017, 08:47:09 AM »
Bitcoin is the 2017 version of tulips

If you feel like gambling, go for it! 


gp_

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Re: Is it too late [bitcoin]?
« Reply #31 on: November 19, 2017, 08:51:08 AM »
Well, depends how you define the term.  :)     I'm anxious to see how the crypto market will do in the next correction and recession.   These are very good times!   They don't last forever....I hope the Gen Y / millennial crowd doesnt take this 10 year (yes....10 years!!) bull market for granted.....it will end eventually.   Just don't want to see you holding the hot potato ;)

From my 30+ years of investing,  I plan to stay away from such specialization.....Been there done that twice now.    I would be a much richer man if I had just invested in a simple index fund and spent my valuable time doing other things.   Not to mention the stress of huge price swings we see in the crypto markets.   

yes, many will end up holding the "hot potato". there are huge price swings for sure, which is why i suggested buying at least 1 just for speculation reasons. the downside is that you lost a (somewhat) small amount, the upside potentially being a great payoff.

gp_

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Re: Is it too late [bitcoin]?
« Reply #32 on: November 19, 2017, 09:01:44 AM »
The more I understand bitcoin the less interested in it I am. In addition, you can't 'invest' in bitcoin, because it isn't an investment. Investments pay dividends, income, share business profits, etc. Bitcoin's value is completely based on speculation. The price can go up and down, but at the end of the day no one has any clue what a bitcoin should really be worth. It's intrinsic value is $0.00. To me, that means it is worthless. Even tulips during tulipmania had an intrinsic value. It was very low... how many calories are in a tulip bulb if you ate it? It was still a positive number. If the markets decided bitcoins were worth $0 tomorrow, what could you do with a bitcoin? Nothing. 

Hedgefunds buying something doesn't mean anything. There are plenty of hedgefunds run by idiots. While most active funds underperform their benchmarks... hedge funds normally do even worse than active mutual funds. A hedgefund could buy bitcoin just for the talking point of owning Bitcoin, or they could be buying it for short term gains with the intention of dumping it. Bitcoin can be both a long term failure and a short term trading opportunity.

Billions of dollars flowing into something doesn't mean it's good. Adjusted for the current price of gold, a tulipmania era tulip would be worth over $650,000. Hundreds of billions flowed into tech bubble era tech stocks. Trillions were wrapped up in the housing bubble. If something is hot people will throw far more money at it than it is worth.

i completely understand where you're coming from. yes, plenty of hedgefunds are ran by idiots, but the fact that institutional money is flowing into this space means that there's some weight to to this... yes, they're hedging their bets and speculating like everyone else, but the same can be said for every other asset in existence. the mainstream view of bitcoin is still very young, which is why i suggested the OP buy at least 1 if possible. i've been in this space for awhile, and i'm pretty confident that we're still nowhere near an all time high. leaving ethics out of the equation, many can still profit even at the current price.

PDXTabs

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Re: Is it too late [bitcoin]?
« Reply #33 on: November 19, 2017, 09:48:36 AM »
I am currently mining Monero and Ethereum. I would not personally buy any cryptocurrency for the sake of "investing." Specifically, cryptocurrencies are supposed to be a store of value the same way that the USD, Euro, or gold are supposed to be a store of value. I do own some BTC, but I purchased it to buy things online, not to be a currency trader.

All my investments are held in either Vanguard's VTWSX or the SP 500 index fund that is offered through my employer's 401k.

L.A.S.

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Re: Is it too late [bitcoin]?
« Reply #34 on: November 19, 2017, 10:18:34 AM »
Avoid cryptos at all cost.

why? because you don't understand them, and therefore look at them as not being wise investments? if most people attempted to learn about them with the same dedication as a "normal investment", you'd be more educated, and therefore see value where it exists. most ICO's serve no purpose (it's pointless for them to issue a token), but there are many that have a specific use case and are actually forward-thinking.

to the OP, i would suggest buying at least 1 BTC. you don't need to buy an entire BTC at once, but dollar cost average until you possess 1 if that's easier. there are BILLIONS of dollars flowing into cryptocurrencies right now (specifically BTC) and these are traditional hedge funds and other institutions. they aren't idiots...

No, from an investment standpoint, I understand them perfectly well.  That is the source of my warning. 

As other commenters have said here (and as I have said in other threads) they have no intrinsic value.  If something has no intrinsic value, then it cannot, ipso facto, be considered an investment.  If you buy something with no (or only nominal) intrinsic value, you are speculating.  Period, end of story.  That is simply the definition of a speculation.  Is it possible to "make money" while speculating? Yes, of course it is.  However, the money made while speculating is akin to the money one "makes" when gambling. Since there is no real intrinsic value of the asset like a bitcoin, the only source of possible gains comes from the hope or belief that another person in the future will pay more for the thing.  This is not the case with a true investment. 

I think deep down bitcoin holders know this to be the case -- or at least they should.  Without fail, everyone I've run into who holds a bitcoin or some other crypto becomes a true-believer, and crypto salesman the minute they buy one... Why? because they have to if they ever hope to see a profit.  Since there is no real underlying asset value to bitcoin, the bitcoin holder needs to constantly be talking it up to others to ensure that there will be a steady stream of buyers who bring actual money to the table -- because let's be honest, this is the only thing that is supporting its value at the moment.  If the buyers dry up even for a few hours the price of a bitcoin could plummet -- theoretically to zero.


MrThatsDifferent

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Re: Is it too late [bitcoin]?
« Reply #35 on: November 19, 2017, 01:11:39 PM »
Avoid cryptos at all cost.

why? because you don't understand them, and therefore look at them as not being wise investments? if most people attempted to learn about them with the same dedication as a "normal investment", you'd be more educated, and therefore see value where it exists. most ICO's serve no purpose (it's pointless for them to issue a token), but there are many that have a specific use case and are actually forward-thinking.

to the OP, i would suggest buying at least 1 BTC. you don't need to buy an entire BTC at once, but dollar cost average until you possess 1 if that's easier. there are BILLIONS of dollars flowing into cryptocurrencies right now (specifically BTC) and these are traditional hedge funds and other institutions. they aren't idiots...

No, from an investment standpoint, I understand them perfectly well.  That is the source of my warning. 

As other commenters have said here (and as I have said in other threads) they have no intrinsic value.  If something has no intrinsic value, then it cannot, ipso facto, be considered an investment.  If you buy something with no (or only nominal) intrinsic value, you are speculating.  Period, end of story.  That is simply the definition of a speculation.  Is it possible to "make money" while speculating? Yes, of course it is.  However, the money made while speculating is akin to the money one "makes" when gambling. Since there is no real intrinsic value of the asset like a bitcoin, the only source of possible gains comes from the hope or belief that another person in the future will pay more for the thing.  This is not the case with a true investment. 

I think deep down bitcoin holders know this to be the case -- or at least they should.  Without fail, everyone I've run into who holds a bitcoin or some other crypto becomes a true-believer, and crypto salesman the minute they buy one... Why? because they have to if they ever hope to see a profit.  Since there is no real underlying asset value to bitcoin, the bitcoin holder needs to constantly be talking it up to others to ensure that there will be a steady stream of buyers who bring actual money to the table -- because let's be honest, this is the only thing that is supporting its value at the moment.  If the buyers dry up even for a few hours the price of a bitcoin could plummet -- theoretically to zero.

Itís funny because I have two friends who are bitcoin zealots and one posts constantly that everyone who hasnít gotten bitcoin is an idiot and itís working. It makes you question yourself and think, am I a Luddite who, like those in the past who didnít believe in the internet or smartphones, just doesnít understand this concept of crypto currency?  Will we look back in 10 years and say, thank jeebus I didnít put money on that or damn, blew my chance!?!  No one has a crystal ball.  FOMO is definitely driving things, especially with all the, wish I had...

MaaS

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Re: Is it too late [bitcoin]?
« Reply #36 on: November 19, 2017, 01:22:44 PM »
I'm still waiting for my tulip bulbs to go back to their old highs.  Then I'll cash out and put it all into bitcoin.

Lol.  I laughed way too hard at this, well played.

As many have said in differing ways, this is a question that can't be answered by facts.  Bitcoin has no fundamentals behind it or intrinsic value.  With a speculative item like this, who knows how high it can go.  This may just be the beginning, or it could be the end. 

I personally own zero Bitcoin and don't intend to. 


harvestbook

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Re: Is it too late [bitcoin]?
« Reply #37 on: November 19, 2017, 02:42:38 PM »
I was interested late last year when it was under $1,000 but was starting to get hyped. Then it became hot and I lost interest before I could figure out the best way to buy and store it. Even if i had bought then, I'd have sold long ago.

My feeling is whatever intrinsic value cryptocurrency has will manifest in the world's markets anyway, and I'd rather hold small pieces of the world's markets. Blockchain technology seems to have real and valuable uses but again, I don't necessarily think that value will be captured in a currency basically created out out of thin air. Additionally a very small number of people hold the bulk of Bitcoin and it's likely being manipulated by a very few large coin holders. Even with the boom, it's still only about .003 percent of the world's market cap and that's insignificant in a truly diversified portfolio.

I can't predict the future but I'm happy to sit it out and stick with owning the world's companies that produce goods and provide services, and the debt markets of those who make and do things.

shadow

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Re: Is it too late [bitcoin]?
« Reply #38 on: November 19, 2017, 04:54:03 PM »
No, from an investment standpoint, I understand them perfectly well.  That is the source of my warning. 

As other commenters have said here (and as I have said in other threads) they have no intrinsic value.  If something has no intrinsic value, then it cannot, ipso facto, be considered an investment.  If you buy something with no (or only nominal) intrinsic value, you are speculating.  Period, end of story.  That is simply the definition of a speculation.  Is it possible to "make money" while speculating? Yes, of course it is.  However, the money made while speculating is akin to the money one "makes" when gambling. Since there is no real intrinsic value of the asset like a bitcoin, the only source of possible gains comes from the hope or belief that another person in the future will pay more for the thing.  This is not the case with a true investment. 

We have different understanding of crypto. Your understanding leads you to believe it's gambling. My understanding leads me to believe in it. Does the internet have intrinsic value? Does electricity? Does a network? Crypto principles (open financial systems, decentralized, permissionless, privacy, reduced transactional barriers, value velocity, etc) have intrinsic value; various services have already been built on top of crypto. The future will determine which of us has a greater understanding.

Quote
I think deep down bitcoin holders know this to be the case -- or at least they should.  Without fail, everyone I've run into who holds a bitcoin or some other crypto becomes a true-believer, and crypto salesman the minute they buy one... Why? because they have to if they ever hope to see a profit.  Since there is no real underlying asset value to bitcoin, the bitcoin holder needs to constantly be talking it up to others to ensure that there will be a steady stream of buyers who bring actual money to the table -- because let's be honest, this is the only thing that is supporting its value at the moment.  If the buyers dry up even for a few hours the price of a bitcoin could plummet -- theoretically to zero.

Personally, I have no need to sell anyone on crypto nor am I trying to. My motive and intent are altruistic. Op asked for advice about risking 3k for an asymmetric return.

« Last Edit: November 19, 2017, 04:55:54 PM by shadow »

phil22

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Re: Is it too late [bitcoin]?
« Reply #39 on: November 19, 2017, 05:31:52 PM »
sorry but we can't take comfort in the "intrinsic value" of the stocks we're all accumulating.  look at the price/book ratio listed here for the VTSAX (you'll see its at 3.0):
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0585#tab=2

why are we all willing to invest in something priced more than 3x its "intrinsic value"?  because 100+ years of stock market history shows us we can probably assume future buyers will be there when we go to sell our shares.

your stocks have their current value because that's what people are willing to pay for them.  not because of intrinsic value.

that being said, putting money into bitcoin to try to make an easy profit is a bad idea... just like stock picking is a bad idea.

Indexer

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Re: Is it too late [bitcoin]?
« Reply #40 on: November 19, 2017, 07:35:49 PM »
Intrinsic value = the value based on financials.

This is not whether it gives you a happy feeling or might save the world in some hypothetical future. It is not related to the current market price. It's the value something is worth even if no one wants to buy it.

Stocks: what are the earnings, what is my cash flow if I hold it(dividends), etc.  (Note: I'm talking about stocks with earnings. Dotcom era tech stocks, penny stocks, stocks without revenues, etc. have little value outside of speculation.)

Bonds: how much is the income stream I can get if I hold it, what are prevailing interest rates?

The US dollar: Yes, it's a fiat currency. It is also legal tender for all debts, public and private. The dollar could suffer hyperinflation. However, I have a debt, my mortgage, and the bank is legally obligated to accept my dollars. That means, at least in one aspect of my life, the dollar has a fixed value. I need X dollars to keep a roof over my head for the next 30 days so I have an incentive to keep collecting dollars. Apply that same logic to every person and business with dollar denominated loans and the dollar has an established intrinsic value.


Bitcoin: if I owned 1 bitcoin, and tomorrow no one wanted to trade bitcoins with me, what is my bitcoin worth?  Hmmm... no dividends, banks aren't legally obligated to accept it... it's worth... absolutely nothing. It's intrinsic value is $0.00.

Why would no one want to trade bitcoins with me? Many possibilities, but four big ones stand out to me.
1. Something better could come along, looking at the competition this seems highly probable. Plus if the Fed & ECB decided to create their own blockchain tech then bitcoin's chances of going mainstream are gone. It would still be useful for black market deals, but that doesn't justify an $8,000 market value.
2. The energy consumption makes it unfeasible, which is already the case. It's been calculated that the average bitcoin transaction uses more energy than the average US home uses in a week. How do you scale that?!? https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mining-electricity-consumption-ethereum-energy-climate-change
3. Bitcoin gets hacked, or it is proven that it can be hacked. No one has to hack it, just the threat that it can be hacked makes it irresponsible to hold onto. Current computers would have a hard time. However, quantum computers could do it. https://www.cryptocoinsnews.com/quantum-computers-will-destroy-bitcoin-scientists-warn/
4. The speculation dies down. If Bitcoin's price drops too much then there is less financial incentive to be a bitcoin miner. Miners might mine other crypto currencies instead. Less Bitcoin miners = less computing power to process bitcoin transactions. Then what happens?

For fun, what is a tulip bulb worth if no one wants to trade tulip bulbs with me? 1.48 calories per gram. 300 years after tulipmania tulips were valuable again. In WWII, due to a Nazi blockage, there wasn't any food, so people ate tulips. ;-)



@Shadow: I hear you. I however do not believe for a second that bitcoin is the next internet or electricity. I think it is far more likely to be the next dotcom bust. In 1999 an online toy company had a larger market cap than Toys R Us, even though ToyRUs did more sales.... even online sales. It didn't make sense. It was stupid. That online toy store went under when the tech bubble burst. Fast forward to 2017 and Toys R Us is filing bankruptcy. The technological predictions of the tech bubble are coming true, just 18 years too late. Toys R Us also wasn't brought down by an online toy store. They were brought down by Amazon, which in 1999 was an online bookstore. Blockchain tech might improve how we transfer money, it might also improve other technology, but that doesn't mean Bitcoin's price will continue to go up over time. For that to happen Bitcoin has to start replacing currencies, which for the reasons I've listed, I don't see happening... ever.
« Last Edit: November 19, 2017, 07:46:50 PM by Indexer »

shadow

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Re: Is it too late [bitcoin]?
« Reply #41 on: November 19, 2017, 10:09:43 PM »
@Indexer

I'm not addressing bitcoin specifically. I'm discussing crypto in general. Due to the consensus structure, blockchain transactions have inherent costs. For example, all transactions in ethererum has a cost:

Dapps (decentralized applications) are built on it. Some of the first generation dapps are somewhat clunky and very basic, yet people still use them. Etherdelta is a decentralized exchange running off ethereum network. They make 0.03% for every taker or maker transaction, and every transaction costs eth. Etheroll (small cap and not really that great a site), a provably fair gaming service with 1% house edge, pays eth dividends for every etheroll token you hold; it costs eth for every roll. You basically go to the website (send a small amount to your metamask addon), and click on roll to play. Funfair, a more advanced online casino, will be launched 2018.

Storj, a decentralized cloud storage platform pays individuals for their hard drive space to store zero-knowledge end-to-end encrypted files, shredded into distributed shards. It is cheaper, faster, and more secure than centralized cloud storage platforms; storj transactions costs eth. "There is no need to trust a corporation, vulnerable servers, or employees with your files. Storj completely removes trust from the equation. Storj uses blockchain features like a transaction ledger, public/private key encryption, and cryptographic hash functions for security." There will soon be projects like golem, a decentralized computer that can be used for fast and cheap computing or rendering power for graphical media or scientific and medical research folding processes; it will pay users for their hardware processing; all transactions on ethereum naturally cost eth.

Axa, a french insurance company is using eth for flight delay insurance (https://www.coindesk.com/axa-using-ethereums-blockchain-new-flight-insurance-product/). Icos allow people to seamlessly and automatically crowdfund or speculate. All costs eth transactions. There are increasing demand for eth. New dapps are being built on top of it; many will fail, and some will do well. There are stuff emerging for identity, voting processes, "mortgage applicants being able to prove that their salary sits within a certain range, without revealing the exact figure", other insurance purposes, etc.

People are also using it to buy other products (airvpn, adult entertainment) or tip on social networks (as simple as typing in !tip 0.001 eth). Bat (basic-attention-token browser) aims to disrupt online advertising industry, and also allows users to donate directly to youtubers and other sites; it runs off the ethereum network.

The demand will for something like eth will be driven from compelling use-cases, especially if the pace of progress continues with 2nd and 3rd generation dapps or if there is a killer app. Future apps might be something like netflix.eth or a video stream service that allows microtransactions (charges $0.25 per episode, gives you a passcode that's good for 48 hours on two devices or something). There is even a market for ethereum name services, and some of them are going for millions $.



« Last Edit: November 19, 2017, 10:12:32 PM by shadow »

shadow

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Re: Is it too late [bitcoin]?
« Reply #42 on: November 19, 2017, 10:32:11 PM »
@Shadow: I hear you. I however do not believe for a second that bitcoin is the next internet or electricity.

Also, I'm not saying blockchain will be the next internet or electricity. I'm alluding to aspects that blockchain shares: it's an open system with money properties, that allows developers to innovate on top of, where computation costs power. If the internet has intrinsic value as an open information network and electricity has intrinsic value as a source of power, then blockchain also has its own intrinsic value.
« Last Edit: November 19, 2017, 10:36:31 PM by shadow »

shadow

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Re: Is it too late [bitcoin]?
« Reply #43 on: November 19, 2017, 11:09:31 PM »
2. The energy consumption makes it unfeasible, which is already the case. It's been calculated that the average bitcoin transaction uses more energy than the average US home uses in a week. How do you scale that?!? https://motherboard.vice.com/en_us/article/ywbbpm/bitcoin-mining-electricity-consumption-ethereum-energy-climate-change

Proof-of-stake systems used in other crypto and planned for use in ethereum use significantly less electricity.

Quote
3. Bitcoin gets hacked, or it is proven that it can be hacked. No one has to hack it, just the threat that it can be hacked makes it irresponsible to hold onto. Current computers would have a hard time. However, quantum computers could do it. https://www.cryptocoinsnews.com/quantum-computers-will-destroy-bitcoin-scientists-warn/

If we ever approach this point, either there will be a solution or the internet will break. It is far more likely for current financial systems to get hacked than bitcoin (cash) protocol (I'm not sure about bitcoin segwit). If quantum computers can crack blockchains, no encryption scheme is safe at any level; all will be affected including banks and governments.


runbikerun

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Re: Is it too late [bitcoin]?
« Reply #44 on: November 20, 2017, 01:40:36 AM »
I've heard three principal arguments in favour of cryptocurrency, and I've yet to be convinced by any of them.

1. Is cryptocurrency actually a currency? I've never met anyone in the flesh who's actually paid for goods or services using it. It's almost impossible to use without first converting it to dollars, euro or yuan. This isn't a simple one to solve: the delays in transaction processing and the ridiculous price volatility make it very difficult to imagine a world in which crypto as it's currently comprised can operate successfully as a currency. Right now, Starbucks loyalty points probably have a better claim to be classed as a currency: they're accepted at a reasonable minority of retail establishments around the world, they can be used immediately, and their value is fairly consistent.

2. Is crypto a store of value? This is a controversial one, as there are crypto advocates who believe that currency should never be a store of value at all. So when discussing this one, it's possible to be faced with two utterly contradictory arguments: that no currency should be a store of value, and that cryptocurrency is a solid store of value.

The usual comparator for establishing crypto as a store of value is to bring up Venezuela or Zimbabwe - in other words, to bring up the spectre of two of the most catastrophic economic disasters of the post-war world and then talk about them as though that represents a reasonably likely scenario for people around the world. It's not: those two are wildly divergent outliers, and even in cases where the local currency suffers catastrophic inflation, the historical result has been a black market operating in US dollars specifically because it's stable and extremely easy to use. At any rate, crypto is a terrible choice of alternative currency, as it's more volatile than almost every currency on earth and requires a computing infrastructure that isn't present in a lot of countries which might be at risk of hyperinflation.

That's before we get to the fact that it would be trivially easy for the US, EU and China to reduce crypto values to zero if they decided to do so. Criminalise conversion to real currencies and the price would crater in minutes and keep falling.

3. The last use case I've seen is the ICO argument: that crypto allows an effective public offering for a business model without going through the usual steps prior to that. This one looks legitimate at first glance, but is actually potentially an even worse idea than the other two. IPOs are incredibly tightly regulated and controlled, and for good reason. Going with an ICO bypasses all kinds of relevant regulation and enables business to launch with none of the usual safeguards in place to protect investors. Instead of having to provide a coherent and convincing business case to professional investors, startups can potentially launch an ICO and sell to crypto enthusiasts instead. That's a dangerous lowering of the bar.

The last thing that's worth bearing in mind is simple: even if my analysis is completely wrong, it doesn't change the fact that crypto pricing is in a speculative bubble. Even if it turns out bitcoin is an essential component of a grey economy, there's no intrinsic reason that means it needs to be at seven thousand dollars a coin to fulfil that role. If Ethereum is a genuinely useful platform for certain applications, it may well be enough to support a price a tenth of what it is now. Prices right now bear no relationship to projected future values or real-world data: if they did, they'd be orders of magnitude less volatile and would visibly move in reaction to relevant information.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #45 on: November 20, 2017, 07:50:48 AM »
Why would no one want to trade bitcoins with me? Many possibilities, but four big ones stand out to me.
1. Something better could come along
2. The energy consumption makes it unfeasible
3. Bitcoin gets hacked
4. The speculation dies down

Indexer, I appreciate your response. I don't agree with it, but you're one of the first people in this thread that has talked about risk and what those risks are.

The reason why I've stated numerous times why I won't say whether or not Bitcoin is a good investment for someone is because determining whether something is a good investment for someone requires that we know what that person's risk appetite is and what their portofolio should look like to match that risk appetite. Some people like 100% stocks, some like a varying mix of stocks and bonds, some like some stocks, bonds, and a small percentage of high risk, high yield, etc. The point is, unless we know what someone's risk appetite is, then you can't give good advice on whether something might be a good fit for any individual.

I often here people talk about the speculative nature about bitcoin without really mentioning any specifics at all. People don't realize that speculation goes both ways. You can speculate that something will be worth a lot, but you can also speculate that something with be worth a lot less in the future. The only thing that decreases the speculative nature of any given investment is to lay out the risks, both inherent and residual, of the investment.

Rarely do I ever see people do this when they say "well someday bitcoin could go to zero". Sure, absolutely...gold could also go to near zero, Apple as a company could go bankrupt, and the US dollar could see hyper-inflation. All of these things have varying degrees of risk and saying that they could happen without discussing the realities of such an occurrence isn't a proper way to do risk assessment. Some are more likely to occur than others, but unless you actually populate the risks and each of their likelihoods of occurrence, then you won't truly understand what the risk of the investment actually looks like.

So again, I'm not going to state whether or not I feel bitcoin is a good investment for the OP, but I can provide some additional thoughts on the given risks involved with Bitcoin as Indexer had:

Bitcoin's price is strictly supply and demand driven. Since it supply is statically hard-coded and deflationary, then that means the main driver for its price is simply demand. So if the price were to decrease, then that means demand would need to decrease. As Indexer mentioned, what are some things that would cause demand to decrease?

1) A better crypto-currency is developed. This could happen, but I feel the likelihood of this occurring is extremely small at this point. SegWit was enabled recently that will allow Bitcoin to develop advancements in its capabilities much quicker and without necessarily the need to hardfork. This means that any crypto-currency that comes along to try and supplant bitcoin as the market leader, not only needs to compete against the size of bitcoin's market itself, but also has to compete against the fact that any technological improvements that the competitor has can simply be implemented in bitcoin before a competing market ever gets strong enough. Take for example the RSK side chain that will allow for smart contracts to take place on the bitcoin network and be backed by bitcoin. This means that many of the technological features that Ethereum has over Bitcoin would then be able to take place on the bitcoin network. Here is a good article that also talks about why Bitcoin has such a massive market lead on other crypto-currencies and why it will be extremely difficult for others to supplant it as the leader. Keep in mind this article was written back in May before Bitcoin saw massive market growth, investment. development, and withstood several hardfork attempts against it.
https://medium.com/@jimmysong/why-bitcoin-is-different-than-other-cryptocurrencies-e16b17d48b94


2) The energy consumption makes it infeasible. I don't see this as a risk at all, and it actually isn't even in my risk profile for Bitcoin, but I'll address it since it was mentioned. The energy consumption of the Bitcoin network today is massive. That much is true. But it isn't unsustainable and it is actually a problem that I feel will solve itself. The amount of energy that it takes to solve a block is directly dependent on the difficulty of solving that block and the efficiency of the mining hardware. I see a lot of articles always compute the energy consumption of the bitcoin network in relation to the number of transactions it performs, but this is a useless calculation since the energy spent per block isn't really tied to how many transactions are in that block. There could be 1,000 transactions in a block or 1,000,000 transactions and the energy consumed to solve the block and add it to the block chain will be about the same give the same difficulty level at the time. Therefore, as the network scales and grows, the ratio between the number of transactions it processes and the energy spent will begin to decrease.

Also, there are layer-2 side chain possibilities such as the Lightning Network that will allow for an immense number of transactions to be processed on the equivalent computing power of a small server. This will allow the bitcoin network to process massive amounts of micro-transactions for a lot less energy than our payment systems are capable of now.

Finally, energy consumption is Bitcoin mining's business model. Unlike many traditional business that don't take power consumption into consideration, for Bitcoin mining, it is its business. Therefore improving inefficiencies and costs in energy is Bitcoin mining's main profit driver. This will likely lead to Bitcoin (as it already has been shown) to be a first adopter and main driver of more sustainable energy practices in the long run.


3) Bitcoin gets hacked. This is certainly a legitimate concern and it makes my list as well for possible risks to Bitcoin. This is a risk that could actually damage Bitcoin's price significantly. Bitcoin is a safe and secure network for value storage due to the fact that it is a decentralized and secure network. If this were to become compromised due to a vulnerability in the code, then that could posed a significant risk to the sentiment of the market to trust its wealth in the network. I don't feel that the likelihood of this risk is very high however. The security in the blockchain itself would still be valid due to the proof-of-work that it took to secure the blocks. The more likely scenario would be a flaw in the security of the wallets themselves or in the transactions that take place, but not necessarily in the Bitcoin network. Consumers are always in control of the wallets they use however and there is a massive number available. So in the event of a vulnerability in one wallet, the users can choose to move their funds to another. In the event of a vulnerability discover in the transactions that could allow for information disclosures or leaks, the Bitcoin network can always patch and hardfork to mitigate the vulnerability while the market holds transactions to prevent risk during the time. I don't think this risk is a massive risk to Bitcoin's long term value. Finally, Bitcoin uses many of the same cryptographic algorithms that the rest of the world users for security and has second layers on top of these to protect against failures in the cryptography. Most other traditional institutions are much more susceptible to cryptography failures than bitcoin is.

As far as quantum computer, this is not a very big threat to Bitcoin despite a lot of media attention around the subject. Most of the articles are simply clickbait due to the amount of attention that both bitcoin and quantum computer receive. The reality is that quantum computing problem solving is very limited in scope and Bitcoin has several features that protect it against the types of problems that quantum computing could be utilized in attacking. Furthermore, any advancements in commercially available quantum computer will not be immediate and Bitcoin will have plenty of time to upgrade in advance of this to sufficiently protect itself. Here is a good article regarding quantum computing and Bitcoin:
https://news.bitcoin.com/antonopoulos-bitcoins-protection-against-quantum-computing/

4) Finally, government intervention could play a role in diminishing demand for Bitcoin. However, I feel that the time for this has long past. If democratic governments were to take a stance against Bitcoin, it would've had to have been well before it became an established market. Derivative markets are now becoming a reality and that means that there will be substantial institutional investment taking place that will rely on the Bitcoin market. Since this institutional money will likely be intertwined with other derivative bets taking place in other markets, that means that it will not be feasible for any large democratic government to shutdown Bitcoin without also unraveling other large economic markets that are now meshed with Bitcoin. There may be totalitarian or communistic governments that take a stand against Bitcoin exchanges (see China), but for the most part democratic and capitalist governments and economies are now faced with the reality that Bitcoin is a part of our economy. It will need to be regulated, but it will not be squashed.


These are the biggest risks that I feel bitcoin faces. Since bitcoin's price is simply demand driven, then these are the biggest risk factors against a growing demand. Outside of these, I don't see very many risks (especially in the foreseeable future) that would hinder demand for it. So simply just saying "but demand could go to zero" is not enough. Demand doesn't just go to zero for those holding bitcoin unless there is a market force that would drive that downturn. Demand could stabilize, in which case the current market price would also see a stabilization, but for a significant downturn to occur, there would need to be a systemic risk to Bitcoin itself (as mentioned above) to take place to drive a massive fleeing from the market.

There are absolutely other risks involved with bitcoin. This is not an exhaustive list by any means, but I hope it provides people with a better understanding for some on how to look at what the risks to the Bitcoin market are.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #46 on: November 20, 2017, 08:20:01 AM »
I've heard three principal arguments in favour of cryptocurrency, and I've yet to be convinced by any of them.

1. Is cryptocurrency actually a currency?
2. Is crypto a store of value?
3. The last use case I've seen is the ICO argument

I don't understand why people feel the need to place Bitcoin into a rigid categorization based on our historical definition of terms. Rarely do revolutionary technologies fit into our historical categorizations. Therefore I don't feel there is a pressing need to categorized bitcoin as a currency or store of value. I see people go at lengths to try and determine whether it is either/or. It is whatever it needs to be. If the market wants it to be a store of value, it can provide that. If the market wants to use it to facilitate transactions, it can provide that as well. It can be both, it can be only one, it can be neither. It's value doesn't depend strictly on what it is categorized as with regards to these ideas.

As far as ICO go, saying that ICOs bypass regulation is not a dig against ICOs, it is a dig against the regulation. Governments are always slow to react against new technologies, so it is not a surprise that a new technology that allows for something such as ICOs to catch governments off guard and force them to be reactionary. That does not mean that ICOs will always be unregulated or risky. The opposite is actually much more likely to be true. It is much more likely that regulation will be put in place that make it so that a future of ICOs are tightly regulation and become a very common way for business to seek startup funds. This will be yet another improvement in our economy that will lead to a much faster pace for innovation to occur.

Also, as it stands, protocol innovation is hindered by the "chicken or the egg" scenario. Developing a new protocol that requires as broad userbase for adoption of the protocol will lack the broad userbase it requires because of the fact that there are no other users to share the protocol with. This has hindered protocol innovation for the last 20 years. With crypto-currencies, there is now a tool that allows for a whole network of users to share in the adoption of the protocol and receive a stake of the monetization of said protocol. This provides an immediate userbase for the protocol and provides incentive for its adoption. Decentralized storage solutions are a prime example of this. No one is going to offer up their storage to a network to get used if there are no users using the network. No users are also going to use a decentralized storage solution that has no storage available for storing things. ...chicken or the egg? I expect crypto-currencies to provide a massive leap in innovation over the next decade because of this.

There are also many other use cases outside of what you listed that will all provide varies degrees of value:

1) Remittances
2) Other cross-border transfers
2) Donations
3) Protest - People in the streets can simply display a QR code and anyone can donate to the cause
4) Irreversible transaction security
5) Smart contracts
6) Anything digital can be made scarce or counterfeit proof
7) Timelocked transactions
8) Multi-signature security

There more, but these are some big ones that I feel are very unique to crypto-currencies that there really aren't good solutions for otherwise today.

talltexan

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Re: Is it too late [bitcoin]?
« Reply #47 on: November 20, 2017, 09:00:42 AM »
Avoid cryptos at all cost.

why? because you don't understand them, and therefore look at them as not being wise investments? if most people attempted to learn about them with the same dedication as a "normal investment", you'd be more educated, and therefore see value where it exists. most ICO's serve no purpose (it's pointless for them to issue a token), but there are many that have a specific use case and are actually forward-thinking.

to the OP, i would suggest buying at least 1 BTC. you don't need to buy an entire BTC at once, but dollar cost average until you possess 1 if that's easier. there are BILLIONS of dollars flowing into cryptocurrencies right now (specifically BTC) and these are traditional hedge funds and other institutions. they aren't idiots...

Why is this "you don't understand them" slur always part of the pro-crypto response to skeptics?

runbikerun

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Re: Is it too late [bitcoin]?
« Reply #48 on: November 20, 2017, 09:05:41 AM »
How could Apple stock fall to zero? They could burn through their entire cash pile, forget to sign any contracts beyond the end of the week, tell their entire supplier network to go find new jobs, lose the keys to their warehouses, have all their property holdings confiscated around the planet, and deliberately crater the brand. All of that, done tomorrow, might be enough to reduce the stock to near zero.

How could bitcoin fall to zero? A joint announcement by the US, EU and China of a severe crackdown on cryptocurrency would quite possibly be enough.

And as for why people are seeking to categorise cryptocurrency: it's being traded for seven thousand dollars a pop. People are trying to figure out whether it's worth that. So far, I've seen nothing to justify the pricing.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #49 on: November 20, 2017, 09:20:37 AM »
A joint announcement by the US, EU and China of a severe crackdown on cryptocurrency would quite possibly be enough.

...Which is about as likely as Apple burning through its entire cash pile...