Author Topic: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion  (Read 48444 times)

phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #100 on: July 11, 2017, 07:25:39 PM »
related to long-term bitcoin holding, the next few weeks could be very interesting.  signaling and upgrades and potential forks are on the table.  if things don't go well bitcoin (and other cryptos) could get pretty volatile.

i plan to just ride out whatever happens and not spend any coins until the dust settles.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #101 on: July 11, 2017, 08:21:08 PM »
I agree. It's helpful to remember that bitcoin only hit dollar parity six years ago, so in the last six years its return has been ~2,500:1 not 10:1. Who is to say if the cryptocurrency world will ever see anything like that rate of return in the future,* but I think the folks who are buying up currencies and hoping for appreciation was imaging something on the same order of magnitude.

*And past performance is obviously no guide to future returns.
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arebelspy

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #102 on: July 11, 2017, 08:27:40 PM »
if you're talking about holding established coins for multiple decades, as opposed to trying to catch a newish coin make 10x gains in a single year, you should be able to watch the trajectory for each coin.  whether it's seeing how that coin's mining system works over several years, how quickly security problems get patched, how chain forks and upgrades are handled, if scalability appears to be on track, how/if the coin is being regulated by governments, how the coin's price responds to stock/bond market crashes, etc., it probably won't be a big surprise if a particular coin positions itself for long-term survival.  also, the network effect could theoretically lead to several coins gaining a large user base and becoming entrenched.

But by the time it has that years and years of history, it'll be mainstream enough to have the majority of the price gains already done (the people who took the earlier risk get the higher rewards), so you can hold for some sort of diversification, but why would you expect crazy gains at that point?
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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #103 on: July 11, 2017, 09:19:44 PM »
I'm interested in this. I could see it being 5% of my total portfolio, which I would automatically rebalance out of if it doubled (nonopled?) to be sure of a profit but did not rebalance back into except within a narrow range. I would do it like ARS suggested and equally weight 10 currencies (or so) because even if nine break even, if a single one rises 1000% I have it made. Dollar cost averaging should be very effective for building a large position in something that is crazy volatile.

The problem is convincing myself to sink the money. I'd prefer to go the mining route. The even harder problem would be convincing my wife to let a few thousand go for either of those purposes.

JAYSLOL

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #104 on: July 11, 2017, 09:27:09 PM »
Question for Canadians with a crypto-currency portfolio.  I opened a coinbase account, but for methods of purchasing, it only lets me use Visa or MasterCard?  There is a 4% fee, and i'm not sure what my credit card will charge (like a cash-advance fee) in addition if i use it to buy.  Also, how do i get my money out?  Back through my credit card?

I used a prepaid debit card to buy and my bank charged me an international fee of $9 or something like that.  I haven't sold yet so I don't know what happens.

So, as a Canadian, is there another site i should use if i want to buy and sell from my bank account? 

JAYSLOL

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #105 on: July 11, 2017, 09:52:42 PM »
And i just checked, coinbase doesn't support the selling of digital currency in Canada.  So, i can buy, pay 4%, plus possible cash advance charges, and I can't ever sell it.  What the hell?

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #106 on: July 11, 2017, 10:25:32 PM »
And i just checked, coinbase doesn't support the selling of digital currency in Canada.  So, i can buy, pay 4%, plus possible cash advance charges, and I can't ever sell it.  What the hell?

Can you withdraw to Paypal account? Then from Paypal to Canadian bank.
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JAYSLOL

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #107 on: July 11, 2017, 10:56:44 PM »
And i just checked, coinbase doesn't support the selling of digital currency in Canada.  So, i can buy, pay 4%, plus possible cash advance charges, and I can't ever sell it.  What the hell?

Can you withdraw to Paypal account? Then from Paypal to Canadian bank.

I dunno, the site just automatically knows im in Canada, and only gives me the option to link a credit card and as far as I can tell, no paypal or other options

arebelspy

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #108 on: July 11, 2017, 11:38:50 PM »
I'm interested in this. I could see it being 5% of my total portfolio, which I would automatically rebalance out of if it doubled (nonopled?) to be sure of a profit but did not rebalance back into except within a narrow range. I would do it like ARS suggested and equally weight 10 currencies (or so) because even if nine break even, if a single one rises 1000% I have it made. Dollar cost averaging should be very effective for building a large position in something that is crazy volatile.

The problem is convincing myself to sink the money. I'd prefer to go the mining route. The even harder problem would be convincing my wife to let a few thousand go for either of those purposes.

But that's exactly my point. You wouldn't "have it made"... if 1/10th of 5% of your portfolio (or a half a percent of your portfolio) went 10x, you'd suddenly be up 5% on your whole portfolio.  Whoopee!

Is it worth risking 5% of your portfolio for that chance to gain... 5% on your portfolio?

Sure doesn't seem like it to me.

And yes, maybe there are more massive gains, or maybe you make nothing at all, and get wiped out.  But a reasonable scenario just doesn't excite me.  You'd have to take massive risks (large % of your portfolio) and/or get very lucky, and at that point, if you think you will get very lucky, why not just go to the casino?

Or do you think it'll gain 2500x like maze mentions?  And if so, does it have a 1 in 2500 shot to do that, basically?

I don't feel like anyone talks about amounts, or odds. They're just like "well, i think it'll go up. i think cryptocurrencies have a future."

okayyy... and?
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shotgunwilly

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #109 on: July 12, 2017, 09:40:06 AM »
I'm interested in this. I could see it being 5% of my total portfolio, which I would automatically rebalance out of if it doubled (nonopled?) to be sure of a profit but did not rebalance back into except within a narrow range. I would do it like ARS suggested and equally weight 10 currencies (or so) because even if nine break even, if a single one rises 1000% I have it made. Dollar cost averaging should be very effective for building a large position in something that is crazy volatile.

The problem is convincing myself to sink the money. I'd prefer to go the mining route. The even harder problem would be convincing my wife to let a few thousand go for either of those purposes.

But that's exactly my point. You wouldn't "have it made"... if 1/10th of 5% of your portfolio (or a half a percent of your portfolio) went 10x, you'd suddenly be up 5% on your whole portfolio.  Whoopee!

Is it worth risking 5% of your portfolio for that chance to gain... 5% on your portfolio?

Sure doesn't seem like it to me.

And yes, maybe there are more massive gains, or maybe you make nothing at all, and get wiped out.  But a reasonable scenario just doesn't excite me.  You'd have to take massive risks (large % of your portfolio) and/or get very lucky, and at that point, if you think you will get very lucky, why not just go to the casino?

Or do you think it'll gain 2500x like maze mentions?  And if so, does it have a 1 in 2500 shot to do that, basically?

I don't feel like anyone talks about amounts, or odds. They're just like "well, i think it'll go up. i think cryptocurrencies have a future."

okayyy... and?

But if you pick one of the coins that "make it", that is, their protocol gets adopted by some industry or the world, then you definitely aren't looking at x10.  You're looking at 100x...1000x...more.  There's coins that have done 1000x within a year period on nothing other than speculation by a very tiny part of the population.   

I think it's very hard to determine just how risky of an investment it could be with crypto's.  I do think picking 10 different coins (or diversifying to your liking) is a good idea.  IMO, 5% of a portfolio is worth it.

It's funny you used Factom and Siacoin and ETH earlier in your examples.  These are my 3 main gambles.

arebelspy

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #110 on: July 12, 2017, 12:28:51 PM »
But if you pick one of the coins that "make it", that is, their protocol gets adopted by some industry or the world, then you definitely aren't looking at x10.  You're looking at 100x...1000x...more.

Sure. Let's talk about Maize's 2500x gain for a second.

Let's stick with Bitcoin, to start with.

Bitcoin, over six years, went from ~1, to ~2500.  Cool.

Now let's say you buy, or mine, or have, some Bitcoin. Are the same gains feasible?

I don't think so, and here's why.  Each coin would be worth $6,250,000. If that doesn't sound absurd, consider this.

Every person who bought at least $400 worth of Bitcoin (or mined enough) when it was cheap ($1 or less) is now a "Bitcoin Millionaire."  If the coin 2500x again, they'd each have 2.5 billion, or more (if they had more coins, so they had more than exactly 1MM right now).

Can we have that many bitcoin billionaires?  Well, why does bitcoin rise in value? For the same reason gold might rise in value; it's what people are willing to pay. It's not producing an income, the way a stock market investment might. It's just what people are willing to pay.

The problem with valuing a bitcoin at 6.25MM is that people can't afford to drive the prices that high. You can't make that many billionaires out of a speculative item, because not only do you hit a point where people don't want to pay that, you hit a point where there's literally not enough money in the world to make each one worth that*.

*Yes, if massive inflation happens, but then those billions aren't worth much anyways; I'm talking real dollars.

Okay, so if Bitcoin can't 2500x any more, the vast majority of its gains are gone.  What about ETH, the second most popular coin?  Well, being at ~250 (+/-... ~190 as of this typing, but as high as ~400 a month ago), it's just a factor of 10 below BTC. It'll have the same problem that it can't grow that much.

So you're left with the other coins, if you're hoping for massive gains. But which ones? And who's to say they'll see those gains, or that you'll be in the right coin?  What if a new coin pops up you aren't invested in, and then immediately sees a ton of growth you miss out on? (Say a government DOES decide they want a cryptocurrency; doubtful, as they wouldn't have control, but let's pretend--why wouldn't they issue their own, new coin, that would immediately jump up before you can get in?) Or are you going to keep investing in every new coin issued?

Even if not, you're probably trying to pick coins worth mere cents, and at that point, you're basically betting on penny stocks.

And how much do you have to bet to make it worthwhile?  If you're investing in 10-20 coins, and want the amount your money goes up to actually be significant change, you'll probably need to invest thousands in each one.

Is that the best investment strategy with your money? (Again, I'm ignoring mining. If you can do that profitably, okay. Just talking buying and/or holding coins for appreciation's sake.)

My point with this post is that it doesn't seem like the big coins can make those sort of gains based on where they already are, and if you're trying to pick the longshots, why not go bet the ponies?

Maybe you hold some of the bigger coins for more modest gains (10x?), but then you get back to my previous question at the bottom of the last page of is it worth it for those sort of gains?  I think I covered the problems with that already; I just wanted to address the "2500x" possibility here.
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Socmonkey

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #111 on: July 12, 2017, 02:38:56 PM »
I just want to mention that I have accumulated 10,500 STEEM coins and 900 Steem dollars posting on www.Steemit.com

No mining rigs required. No monetary investment required.

If you want to get into cryptocurrency 'for free' try posting there. You can trade your STEEM or Steem dollars for Bitcoin or any other cryptocurrency you want.

My hoard was worth over $25,000 at the top of the market last month. It's still worth 5 figures. All from just from making posts on the site.

I wrote a bit more about it on this thread: https://forum.mrmoneymustache.com/welcome-to-the-forum/new-side-gig-earning-possibility-steemit/
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effigy98

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #112 on: July 12, 2017, 02:57:18 PM »
I have about 1% of my total portfolio tied up in mining now. I have spent at least 40 hours building rigs and coding software to provide telemetry for my miners so I can fix problems and view performance and/or automate fixing them. I could have made the same amount by working on a side gig instead, but I wanted to diversify my investments a little bit more as I already have most of the major categories of assets. I like the idea of these rigs potentially paying dividends over the next few years and be almost 100% automated. I'm not sure the opportunity cost was worth it short term, but I have learned a lot about the space from it and feel much more confident and see new opportunities in a lot of unique areas for side gigs, so the educational part of building rigs and mining alone was/is worth it to me.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #113 on: July 12, 2017, 03:24:59 PM »
Someone else mentioned earlier in the thread that if you are interested in the possibility of the technology, one of your best bets might be to educate your self on those skills and sell your abilities, i.e. your personal capital. This seems somewhat consistent with what I've seen on the consulting / freelancing job sites with the posts of people looking for people skilled at blockchain development, creating a new cryptocurrency, applying existing toolkits, etc. I haven't dug far enough to see what the hourly consulting rates are, but I imagine they'd be lucrative? Anyone dug in?

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effigy98

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #114 on: July 12, 2017, 03:31:24 PM »
Someone else mentioned earlier in the thread that if you are interested in the possibility of the technology, one of your best bets might be to educate your self on those skills and sell your abilities, i.e. your personal capital. This seems somewhat consistent with what I've seen on the consulting / freelancing job sites with the posts of people looking for people skilled at blockchain development, creating a new cryptocurrency, applying existing toolkits, etc. I haven't dug far enough to see what the hourly consulting rates are, but I imagine they'd be lucrative? Anyone dug in?

In a gold rush, it doesn't hurt to be the one selling shovels.

I have seen billrates from $150 to $250hr depending on the skills needed. Others are just offering profit sharing (percent of profits). It is a GREAT time to be a software developer, I never seem to have enough time to do all the work that seems to float by.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #115 on: July 12, 2017, 05:54:03 PM »
Someone else mentioned earlier in the thread that if you are interested in the possibility of the technology, one of your best bets might be to educate your self on those skills and sell your abilities, i.e. your personal capital. This seems somewhat consistent with what I've seen on the consulting / freelancing job sites with the posts of people looking for people skilled at blockchain development, creating a new cryptocurrency, applying existing toolkits, etc. I haven't dug far enough to see what the hourly consulting rates are, but I imagine they'd be lucrative? Anyone dug in?

In a gold rush, it doesn't hurt to be the one selling shovels.

I have seen billrates from $150 to $250hr depending on the skills needed. Others are just offering profit sharing (percent of profits). It is a GREAT time to be a software developer, I never seem to have enough time to do all the work that seems to float by.

Thanks. That seems consistent with what I would have imagined in terms of lucrative.
I can even imagine people with experience, at larger / better financed gigs are pulling even higher unadvertised rates if they can convince the client it's worth it.

"It is a GREAT time to be a software developer, I never seem to have enough time to do all the work that seems to float by."

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maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #116 on: July 12, 2017, 06:05:41 PM »
Sure. Let's talk about Maize's 2500x gain for a second.

Let's stick with Bitcoin, to start with.

Bitcoin, over six years, went from ~1, to ~2500.  Cool.

Now let's say you buy, or mine, or have, some Bitcoin. Are the same gains feasible?

I don't think so, and here's why.  Each coin would be worth $6,250,000. If that doesn't sound absurd, consider this.

Every person who bought at least $400 worth of Bitcoin (or mined enough) when it was cheap ($1 or less) is now a "Bitcoin Millionaire."  If the coin 2500x again, they'd each have 2.5 billion, or more (if they had more coins, so they had more than exactly 1MM right now).

Can we have that many bitcoin billionaires?  Well, why does bitcoin rise in value? For the same reason gold might rise in value; it's what people are willing to pay. It's not producing an income, the way a stock market investment might. It's just what people are willing to pay.

The problem with valuing a bitcoin at 6.25MM is that people can't afford to drive the prices that high. You can't make that many billionaires out of a speculative item, because not only do you hit a point where people don't want to pay that, you hit a point where there's literally not enough money in the world to make each one worth that*.

*Yes, if massive inflation happens, but then those billions aren't worth much anyways; I'm talking real dollars.

This got me thinking. Can we define what the best case scenario for bitcoin (or something similar) would look like? I'm not even going to touch estimating how likely a best case scenario is to occur.

To me it seems like the absolute best case for bitcoin is that is replaces the USD essentially entirely for all purposes. Assuming the velocity of money remains constant (again a big assumption and I'm not even going to try to estimate how likely that is), we'd need about as much bitcoin value as the M0 money supply, the value of all us currency currently in circulation. I looked a couple of places as the estimated M0 money supply for US dollars is about $3.7 trillion.*

Right now all the bitcoin mined to date is worth about $40B. There's still a bit more bitcoin to be mined in the future, but there's also a non-trivial number of coins that have been irretrievably been removed from the money supply. People lost private keys, or the coins were sent to intentionally false addresses.** So let's assume the two of those cancel out. For $40B in bitcoins to grow to $3.7T in total currency, the price would need to appreciate ~93x. That's a back of the envelope estimate for the maximum possible return on bitcoin price appreciation going forward.

Edit: marginal revision. I found an estimate that says the velocity of the US money supply is currently ~1.2 /quarter (so the average US dollar is spend approximately 1.2 times every three months) and the velocity for bitcoin is currently around ~1.6/quarter. If those velocities remained constant, we'd need only $2.8T in bitcoin to replace $3.7T in USD. This yields an estimate of a maximum of 70x additional growth in the price of bitcoins.

*Source: https://fred.stlouisfed.org/series/BASE

**This old article from 2014 estimated that perhaps 1/3 of all bitcoins mined were lost from circulation.
« Last Edit: July 12, 2017, 06:52:39 PM by maizeman »
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arebelspy

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #117 on: July 12, 2017, 06:42:54 PM »
Good thought, maize.

A 93x best case scenario that requires a complete replacement of the US dollar seems pretty meh, to me.

I bet a lot of people speculating on BTC think they'll make 1000x return, and just don't even run any numbers to see that it's just not possible (liklihood aside). I think your thought experiment shows that 100x probably isn't even possible.

I mean, we can imagine wilder scenarios (it replaces every currency on the planet), but not ones that are remotely plausible on any sort of time frame that's reasonable, IMO.
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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #118 on: July 12, 2017, 07:54:24 PM »
Good comments. 

I think the further problem will be the continued proliferation of new-and-improved cryptocurrencies.  So if $3T+ in cryptocurrencies are in used in 10 years, that value will be spread across dozens of major currencies and hundreds or thousands of lesser-used currencies. 

I do think that mass chaos is possible very soon if individual banks or even individual retailers start their own currencies.  For example, Macy's and Target and everyone else could take the store credit card one step further by having a store currency.  Maybe it could be cheaper to administer than a store credit card or gift cards, if only because it would mitigate security issues. 

It's crazy to think that an exchange might trade Macy's Coins and Target Coins.  It would also take a lot of traffic out of the traditional credit card system, so it would be bad for credit card points and the various card routing services that have been skimming every transaction since the 1960s.  The more credit cards decline in use and benefits the more Store Coin activity we'd see. 

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #119 on: July 12, 2017, 08:01:30 PM »
Good comments. 

I think the further problem will be the continued proliferation of new-and-improved cryptocurrencies.  So if $3T+ in cryptocurrencies are in used in 10 years, that value will be spread across dozens of major currencies and hundreds or thousands of lesser-used currencies. 

I do think that mass chaos is possible very soon if individual banks or even individual retailers start their own currencies.  For example, Macy's and Target and everyone else could take the store credit card one step further by having a store currency.  Maybe it could be cheaper to administer than a store credit card or gift cards, if only because it would mitigate security issues. 

It's crazy to think that an exchange might trade Macy's Coins and Target Coins.  It would also take a lot of traffic out of the traditional credit card system, so it would be bad for credit card points and the various card routing services that have been skimming every transaction since the 1960s.  The more credit cards decline in use and benefits the more Store Coin activity we'd see.

All of this sounds totally plausible to me, and none of it helps the person currently investing in currently available cryptocurrencies.

Quote
I think the further problem will be the continued proliferation of new-and-improved cryptocurrencies.

This especially stood out as important to me in what you wrote. If you think Factom or Siacoin have novel applications, that may be true, but do you think it'll be such that a better version won't come along that supplants it?

First mover advantage isn't nothing, but given their lack of implementation currently, they don't even have that yet, IMO.

Better versions will come along, and newer coins that do other things.  Unless you invest in every new coin (if you even can, before it goes mainstream), how likely are you to get in early enough on one that goes mainstream?
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phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #120 on: July 12, 2017, 09:58:00 PM »
...an estimate of a maximum of 70x additional growth in the price of bitcoins.

i'm no economist, but for a hypothetical upper-bound scenario, wouldn't you have to take into account the other markets bitcoin would likely take a large slice of, in addition to the US dollar?  what about the gold market, international real estate, and other fiat currencies?

as maizeman said bitcoin is deflationary because bitcoins are lost all the time.  soon (if not already) more bitcoins will be lost every year than are mined.  i believe this deflationary behavior would lead bitcoin to take a slice of the global invested monetary value.  so a fraction of the total global wealth may be another way to calculate it.

if the global wealth is 256T (according to the Credit Suisse report below), and bitcoin captures 1% of that (2.56T), that makes each of 20M bitcoins (low assumption of 1M lost bitcoin) worth $128k, or 53x the current value.  if bitcoin captures 5% of world wealth, that makes it 266x the current value.

another thing to consider is that only ~100k bitcoins are traded daily, out of the current 16.4M bitcoin in circulation.  i believe this shallow market drives the market price up significantly.  assuming bitcoin in cold storage aren't being somehow traded in the far future, if we say the day-to-day exchange rate is double the "true" value of a bitcoin, that 266x could become 500x at the exchange.  this would be my rainbows+unicorns 30 year outlook.

or if there are nicely liquid ETFs and whatnot available in the future to eliminate the market price doubling effect, a best-case scenario of world currency with 10% of global wealth still gets us to that 500x number.

https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/the-global-wealth-report-2016-201611.html

« Last Edit: July 12, 2017, 10:18:04 PM by phil22 »

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #121 on: July 12, 2017, 11:01:28 PM »
...an estimate of a maximum of 70x additional growth in the price of bitcoins.

i'm no economist, but for a hypothetical upper-bound scenario, wouldn't you have to take into account the other markets bitcoin would likely take a large slice of, in addition to the US dollar?  what about the gold market, international real estate, and other fiat currencies?


You bring up three different things here, with very different answers:

Can definitely make the case for bitcoin taking a slice out of additional national currencies. I skipped over that because I wanted to balance this against other cyptocurrencies taking a slice out of bitcoin though. But yes, if you throw in all the other national currencies, you can goose the maximum growth factor a fair bit more (although less than you'd think based the the US's share of the global economy. For example, China's economy is ~60% the size of ours, but their M0 money supply is only 25% as large.)

Gold is trickier. Right now all the gold ever mined is worth ~$8.2T (so a bit more than twice the value of all physical US currency in circulation). But if people started to sell gold to buy bitcoin in significant numbers, the price of gold would drop rapidly so you wouldn't have $8.2T available to buy bitcoins. I'm not sure how to model this one, but that doesn't mean it wouldn't have an effect on the ultimate value of a bitcoin in the best case scenario.

Bitcoin really can substitute for dollars or RMB or yen, but I don't see how owning bitcoins is a substitute for owning your home or other real estate. Could you elaborate on that point?

Quote
another thing to consider is that only ~100k bitcoins are traded daily, out of the current 16.4M bitcoin in circulation.  i believe this shallow market drives the market price up significantly.  assuming bitcoin in cold storage aren't being somehow traded in the far future, if we say the day-to-day exchange rate is double the "true" value of a bitcoin, that 266x could become 500x at the exchange.  this would be my rainbows+unicorns 30 year outlook.

This gets back to the question about the velocity of money. The figure I found was 1.6 trades per coin per quarter, or 1.6 trades per coin per 90 days = 0.0178 trades per coin per day. The number you're using is 100k trades day/16.4M coins  = 0.006 trades per coin per day. If you're right, then the velocity of bitcoins is only 1/3 of what I used above, and that would mean the final potential value of bitcoins if they completely replaced the USD would be 3x higher than what I calculated, which is in the same range of multipliers as what you estimate above.

This chart suggests the number of bitcoins exchanged each day is closer to 250k rather than 100k which would be consistent with the higher of the two estimated velocities of money circulation for bitcoin. https://blockchain.info/charts/estimated-transaction-volume But please do feel free to correct me if I'm misunderstanding your point here, or if you think that the link above is not a reliable estimate of the number of bitcoins traded on a daily basis.
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LessIsLess

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #122 on: July 13, 2017, 07:19:23 AM »
There's some serious money being made and lost in cryptos at the moment.  But let's take a breather and think about the economic value.  Nothing survives unless it offers value, and you don't want to be caught in the excitement and lose your mind, followed by your wallet.

Let's compare briefly crypto currencies to fiat currencies.  The danger with FIAT is when you live under an irresponsible government, such gov't will inflate the FIAT into the sky, making it worthless.  But if you live in the US, that hasn't happened yet.  Also, fiat is defended by the force of law and by the armed forces of the state.  On the other hand, crypto is defended by what?  A development team that someone can capture and hold hostage?  By crytographic algorithm that someone can crack in the future?  There are practically no safeguards.  Once the wallet is lost or emptied out, your "wealth" vanishes.  Can you imagine working your whole life and placing your savings into a crypto currency wallet?

However the blockchain technology itself is quite promising.  It enables great record keeping and many other things.  Many companies are trying to figure out "What can blockchain do for me?"  We seem to be in a period of hyper fever, where anyone can start a "blockchain company" with nothing more than a white paper, and rake in millions of fiat dollars.

All that said, I may consider a small speculative position with the knowledge that I could be the proverbial "greater fool" that is left holding an empty wallet.  Maybe I'll start with mining.  How much does it cost to setup a mining machine that won't burn the house down?

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #123 on: July 13, 2017, 08:01:21 AM »

I always think of Bitcoin as the 'gamers currency'.  Sure, some people have made a ton of money on it...but many people have lost a ton of money on it.  I know of people on both sides of the equation.

As with many things like this...it's great if you get in early.  It seems like many of the people that tout these huge returns are, in fact, early adopters.  As it sits now, I just don't see it as being very viable if you are new to the game.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #124 on: July 13, 2017, 10:24:02 AM »
Hey miners,

What do you think of the SIA ASIC, Obelisk?

https://www.reddit.com/r/siacoin/comments/6m5870/obelisk_sia_asic_miner_is_in_presale_for_a/

They are selling 4,000 of them on pre-order.  The first 4,000 will capture around 70% of the hashrate.  I read they are expected to mine approximately 5000 SC a day for the first month but it will be down to 3,200 SC a day by years end (but if they release more Obelisk it would greatly reduce the profit).  Seems like too big of a risk but it is intriguing. 

I'm following it but I'll stick with GPU mining SC while its still somewhat profitable.
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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #125 on: July 13, 2017, 11:17:54 AM »
I read this whole thread and did the Goldman Sachs introduction. 

After all that reading my opinion is as follows:

1.)  Mining is very interesting
2.) Buying the actual crypto currencies is just speculative hoping the next guy pays more.
3.) The real winner will be whoever is invested in the blockchain that goes main stream (not the currency)
4.) The most under rated suggestion (IMO) was buying AMD/Nvidia stock as the mining is becoming a hot item.

Pure opinion.    My BIL put Most of their savings into Etherium at close to 300$.   I think that was incredibly foolish and voiced my opinion as such.  That is the only reason I ended up reading this thread.

kenaces

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #126 on: July 13, 2017, 11:48:20 AM »
I am more interested in odds of getting 10x move up in BTC?  Or BTC's possible role as portfolio diversifier?  Hedge against some kind of US dollar crisis?

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #127 on: July 13, 2017, 11:55:32 AM »
Pure opinion.    My BIL put Most of their savings into Etherium at close to 300$.   I think that was incredibly foolish and voiced my opinion as such.  That is the only reason I ended up reading this thread.

Ouch. Yea, that was foolish.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #128 on: July 13, 2017, 01:23:31 PM »
My BIL put Most of their savings into Etherium at close to 300$.   I think that was incredibly foolish and voiced my opinion as such.  That is the only reason I ended up reading this thread.

Did he sell when it was close to $400?

(Also, FWIW, someone who does something like that probably doesn't have a ton of savings.)
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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #129 on: July 13, 2017, 01:43:58 PM »
No sell near 400$.  Still has it, and I believe its at a lower value then when purchased.  And yes, I assume the same thing you assumed.   The overall value probably isnt a very large amount.


Also after looking at AMD and Nvidia - I dont think either is a good buy at their current price.  In fact I think they are both terrible buys...   My opinion again...
« Last Edit: July 13, 2017, 01:57:46 PM by Kroaler »

effigy98

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #130 on: July 13, 2017, 02:35:28 PM »
The mainstream is just barely dipping in. This is almost like 1995 when the public started their investments in internet stocks and the market went beyond crazy and invested in any company that said they may create a webpage. Just the other day I was listening to talk radio and he mentioned he bought bitcoin and has an 18% return in just a couple months. He is probably 60ish years old and all the younger people were asking how it works, where to buy, what is it... stuff like that. I think when you see mainstream getting interested and all jumping in you may see a bubble of bubbles and that could be a great exit point. It's high risk but high potential reward. Right now most people still do not really understand what it is or how to buy/sell it.

Another interesting thing I am seeing is younger technical people like the idea of side stepping "normal" society and creating their own currency out of nothing basically much like the big companies in software today did in the past with other products/services. This is another way for tech companies to take over the world. If a company like AMZN announced they were creating their own currency which gives you a consumption advantage of some sort, there would be craziness.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #131 on: July 13, 2017, 03:51:38 PM »
The mainstream is just barely dipping in. This is almost like 1995 when the public started their investments in internet stocks and the market went beyond crazy and invested in any company that said they may create a webpage.

That's literally what is going on right now.  Everyone and their mom is creating a whitepaper with an ICO (Initial Coin Offering) and selling it (exactly like the IPO's of the internet bubble).  There are companies (I wouldn't even call them companies) gathering tens to hundreds of millions of dollars before they have a product.

The Market Cap of cryptocurrencies is currently about $80 billion, and was something like $110 billion at it's peak a few weeks ago.

I just don't know how far along this bubble we are.  I don't think crypto is quite "mainstream" yet, but I also don't know how many people it has to reach for it to be considered "mainstream."  I think it's interesting to compare the internet bubble, but I don't know what percentage of the public was actually buying up stocks in them back then.  I was actually searching for the total market cap for something like the top 100 internet or tech stocks in 1999, to back of the napkin compare the frenzy, but it's probably impossible to compare the two accurately. 

I would be very weary at buying up cryptocurrency's at this point.  I am a proponent for the technology of some of them, and I believe there will be good investment opportunities at the right time, but there is a frenzy of money being thrown at many of them without any knowledge of what they're actually trying to accomplish, if anything at all.  Gamble at your own risk.
« Last Edit: July 13, 2017, 03:53:14 PM by shotgunwilly »

jmecklenborg

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #132 on: July 13, 2017, 03:52:35 PM »
The mainstream is just barely dipping in. This is almost like 1995 when the public started their investments in internet stocks and the market went beyond crazy

Yeah, possibly.  But stocks are stocks and invented currencies aren't ownership and don't pay a dividend.  But I agree that it won't take much to get some middle-aged and retirees with deep pockets to be persuaded to buy a chuck of these currencies.  Coinbase is a pretty accessible site to anyone who is familiar with online banking but something that is marketed in an even slicker way could help attract that group of people. 

Also, re: the guy moving his savings into Ethereum...something I haven't seen anyone bring up are the problems associated with an estate retrieving cryptocurrencies.  Since few people using Coinbase or similar services are old, no doubt there is no process in place for an estate to withdrawal the funds.  We have seen a few cases where Bitcoins are seized in drug raids and auctioned off but there is no regulation in place for unexpected deaths. 

It's conceivable that someone's crypto accounts could grow exponentially in size during an illness and if there is no will the family might not know the deceased has anything in these accounts.  No doubt some early buyers of Bitcoin have died in accidents or from illnesses over the past five years and their accounts are now worth millions but their heirs are unaware.



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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #133 on: July 13, 2017, 04:59:12 PM »
Yeah, possibly.  But stocks are stocks and invented currencies aren't ownership and don't pay a dividend.

A lot of the ICOs state that they will indeed pay dividends (PeerPlays, TaaS, ETHbits).

Note that 1) that doesn't mean they will pay dividends 2) the dividends are generally paid in the same currency used in the ICO which could easily become worthless. 3) Doing this is almost certainly illegal in the USA and could bring the SEC down on the companies doing it.

*shrug*
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phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #134 on: July 13, 2017, 07:02:00 PM »
...if people started to sell gold to buy bitcoin in significant numbers, the price of gold would drop rapidly so you wouldn't have $8.2T available to buy bitcoins. I'm not sure how to model this one...

right.  i think some percentage of the gold market (especially folks holding gold ETFs) would move their money into bitcoin if bitcoin sees sustained success.  this would drive up the price of bitcoin regardless of the market cap of gold.

Quote
I don't see how owning bitcoins is a substitute for owning your home or other real estate. Could you elaborate on that point?

going along with the best-case scenario, if bitcoin is seeing multi-decade success i would think some percentage of real estate held as speculation would be sold to buy bitcoin, driving up the bitcoin price.  real estate and bitcoin are both attractive for international investors trying to diversify out of their home countries.

Quote
The number you're using is 100k trades day/16.4M coins  = 0.006 trades per coin per day. If you're right, then the velocity of bitcoins is only 1/3 of what I used above, and that would mean the final potential value of bitcoins if they completely replaced the USD would be 3x higher than what I calculated, which is in the same range of multipliers as what you estimate above.

the 100k bitcoins traded per day number was based on a quick eyeballing of the last 30 days of data.  in last 2 years, according to the bitcoinity.org link below, there was 542M/.4003% = 1.353B bitcoin traded on exchanges (some of the Chinese exchange volume may be inflated, but we'll ignore that).  1.353B / (365*2 days) = 1.85M bitcoin traded per day.  but the same math for the 6-month data gives an average of only ~76k bitcoin traded per day. the daily traded volume is decreasing as least as of late -- so i'm still comfortable with that 100k/day number which as you say triples your calculated potential gains.

the upside still looks to me to be at least 200x current prices in a best-case scenario, and by wiggling some numbers we can get that much higher.

another factor to consider is that the market is unregulated and runs 24/7 -- even if the average price of a bitcoin has an upside of 200x current prices, you could probably sell some bitcoin during the hysteria of an inevitable bubble for several times that.

http://data.bitcoinity.org/markets/volume/2y?c=e&t=b

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #135 on: July 13, 2017, 07:21:14 PM »
Ah, so you're only considering reported crypto-to-not-crypto transactions, and I'm considering bitcoins changing hands (could be for USD, could be for goods or services). That explains the 3x differential between the values reported at my link and at yours.

It appears the fundamental divergence in our thinking is that I'm trying to estimate what the maximum value of bitcoin would be if it becomes successful and widely adopted as a medium of exchange while you are trying to estimate the maximum value bitcoin could reach from people buying it because they expect it to keep increasing in value. So I'd say it makes sense we're coming up with different answers because we're asking different questions.
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phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #136 on: July 13, 2017, 07:35:36 PM »
i see the 300k bitcoins transacted per day: (actual bitcoins transacted, not traded on exchanges)

https://blockchain.info/charts/estimated-transaction-volume?timespan=2years&daysAverageString=7

i agree that we're coming at this from two different angles.  i think the majority of value of bitcoin in a best-case scenario would be as a global store of wealth, not as a medium of exchange for everyday transactions.

OneCoolCat

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #137 on: July 13, 2017, 08:05:08 PM »
No sell near 400$.  Still has it, and I believe its at a lower value then when purchased.  And yes, I assume the same thing you assumed.   The overall value probably isnt a very large amount.


Also after looking at AMD and Nvidia - I dont think either is a good buy at their current price.  In fact I think they are both terrible buys...   My opinion again...

Nvidia has seen an incredible past few years.  I too share concern about how fast it has grown but the balance sheet is sexy, their products are still above the rest and they not just a GPU company.   Nvidia is involved in autonomous driving and artificial intelligence.  I'm still bullish on Nvidia despite its meteoric rise.  If I had money to buy some shares I would because its going to continue to rise.

AMD is hot right now because of the cryptocurrency fad.  They make the best cards for mining at the moment but they are not as good as Nvidia for gaming (though I think they just came out with a new card that is supposed to compete/beat Nvidia's current high-end gpu for gaming).  AMD has also revealed that it will be producing a new CPU that was a shot across the bow at Intel.  This was huge.  I think there is a lot of upside at AMD but i think it carries more risk than Nvidia and not necessarily more reward.

For that reason, Nvidia is a buy and AMD is a hold in my book.
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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #138 on: July 13, 2017, 10:06:01 PM »
I wouldn't dump my real money into cryptocurrency. It's too volatile. However, I did invest in a 6 GPU rig that is churning on free electricity. Once I pay the rig off I'll keep currency which may be worth nothing one day.

In all movies taken place in the future there is one currency that we see. It's interesting this is not where we are headed.

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Krolik

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #139 on: July 14, 2017, 08:32:38 AM »
Following

To add to the thread, we have some ETH (Ethereum), LTC (Litecoin) and XRP (Ripple). Total investment at the beginning of the year = ~5K, more of an experiment than any investment strategy. I fully understand it is pure speculation.
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lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #140 on: July 14, 2017, 08:52:03 AM »
I currently hold Bitcoin as a rainy day savings, an investment and also a monthly budgeting medium. My wife and I both have Shift debit cards that allows us to spend bitcoin anywhere Visa is accepted. This requires us to put our spending Bitcoin in our Coinbase accounts. We each have a little bit of spending money each month and it allows us to budget easily using this separate "bucket" of money. It also helps me limit my risk from an identity theft stand point since I am only storing a few hundred in Coinbase at a time, so if my Shift CC# is ever stolen, only a couple hundred could be stolen. Not that I'd be liable anyway, but it is still good to limit the damage and exposure.

The majority of my Bitcoin is in my offline wallet and is where I store my Bitcoin investment and my rainy day fund. The liquidity of Bitcoin allows me to access the funds in just a few minutes if I needed it by sending a Bitcoin transaction to Coinbase where I can either spend it immediately with my debit card or withdraw it to my bank account.

I believe Bitcoin has an extremely strong future and this setup allows me to store more value into Bitcoin while also keeping the liquidity I need in case of emergencies.


Okay, so if Bitcoin can't 2500x any more, the vast majority of its gains are gone.  What about ETH, the second most popular coin?  Well, being at ~250 (+/-... ~190 as of this typing, but as high as ~400 a month ago), it's just a factor of 10 below BTC. It'll have the same problem that it can't grow that much.

I don't quite follow this post and especially this excerpt. Just because a majority of an investment's growth is behind it doesn't make it a poor investment for the future. The same thing could be said about Amazon. It will not likely see gains like it had early on, but that doesn't mean Amazon is a poor investment for the future.

The problem is that people are looking at Bitcoin at its face value. They are looking at the percentage that it has risen and fallen looking at what it was valued at last year compared to where it is today (~$2200-2500).

However, if you look at it from a market capitalization perspective (which is where its value is ultimately derived), then things are much easier to put into perspective. Because of its limited supply, its value is directly tied to its market capitalization. Right now its market capitalization is around $40billion. This is just a drop in the bucket as far as currencies go. Bitcoin could easily reach $100billion in just couple years and it wouldn't even take much investment to do that. This would roughly double the value of Bitcoin to about $5000.

There are so many ways in which Bitcoin could receive the influx of money to reach a market capitalization of $100billion. Even just some simply good news (ETF approval, scaling fixes, etc) could improve market sentiment that further drives investment. Look at what Japan is doing that has driving new money into Bitcoin.

Now, think to yourself how many investments you could make that would double your money in just a couple years? I don't think Bitcoin is as big of a risk as it is made out to be and I don't think you're giving it as much of an upside as it deserves.

I also don't understand your comment about people "not being able to afford to drive prices higher". Bitcoin extremely divisible. So even if Bitcoin was valued at $100,000 today, that would divide today's single Bitcoin down to .025 of a Bitcoin. Currently it is divisible to down to .00000001 of a Bitcoin. That means there is a ton of room to grow before anyone would be "priced out of Bitcoin". I don't even see that as a possibility because it is almost a self-defeating prophecy. In order for it to price people out of it, it would need to reach mainstream adoption at which point everyone would be benefiting from its increased value. At that point, it would be almost impossible to price society out of something they already own and use. If that were the case, income inequality of that scale would make today's look paltry and we'd probably have much bigger problems to worry about.

You can own fractions of a penny of a Bitcoin at the moment and will be able to do so even when the market capitalization where to reach trillions of dollars. At that point, Bitcoin would have seen enormous gains that could be earned.

A majority of the Bitcoins have already been mined and the rate of new Bitcoins will continue to decrease. That means, any new investments into Bitcoin will directly result in an increase of its value.

At this point, I don't see Bitcoin failing and I don't see any other currency replacing it. But, I do see room for more than one crypto-currency. Bitcoin does one thing and does it really well. It facilitates an exchange of value between two parties. Other currencies that build upon this functionality, while becoming more useful at a very specific task, they are also intrinsically tied to their purpose. For example, Storj is a coin used in the development of a cloud storage solution. It really is an awesome technology and I think that it or Siacoin could really compete with the likes of Amazon, Apple, Google or Microsoft for the cloud storage market. But, that's really the only market I see them competing in. Because of this, I don't see coins like this replacing Bitcoin or its functionality.

It would take a huge shift in the current sentiment to change Bitcoin's fate. Government's would need to change their course and start condemning/outlawing it (the opposite of what is happening).  There is way more upside than any downside at this point.

Bitcoin's biggest risk comes from scaling to meet its future potential. So it could either fail to scale (the next couple months will be very telling), or a coin that is very similar to Bitcoin (primarily acts as a medium of exchange) that is much faster at processing transactions comes along.
« Last Edit: July 14, 2017, 08:55:06 AM by lifeanon269 »

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #141 on: July 14, 2017, 09:13:11 AM »
Question for Canadians with a crypto-currency portfolio.  I opened a coinbase account, but for methods of purchasing, it only lets me use Visa or MasterCard?  There is a 4% fee, and i'm not sure what my credit card will charge (like a cash-advance fee) in addition if i use it to buy.  Also, how do i get my money out?  Back through my credit card?

I used a prepaid debit card to buy and my bank charged me an international fee of $9 or something like that.  I haven't sold yet so I don't know what happens.

So, as a Canadian, is there another site i should use if i want to buy and sell from my bank account?

JAYSLOL, for what it is worth, when I purchased Bitcoin with a credit card through Coinbase, the credit card company (Barclays) treated it as a regular purchase. That means I earned points on the purchase of my Bitcoin. With about 2.1% earned back from my credit card in cash with these miles, that essentially reduced the fee I had to pay through Coinbase to about 2% on the purchase of Bitcoin which is almost what the fee is for a bank transfer purchase.

YMMV, but if you can't find another purchasing alternative, then purchasing through Coinbase with a credit card that earns you decent miles is an option.
« Last Edit: July 14, 2017, 09:14:44 AM by lifeanon269 »

BrandNewPapa

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #142 on: July 14, 2017, 10:55:37 AM »
Personally, I don't see Bitcoin or other crypto currencies replacing any fiat currency in my lifetime (hopefully another 60 years).

I've always thought of it more as a store of value similar to that of gold. I don't own any gold because I find it impractical.

However, I do want a way to hedge the US dollar in the event of a war, global crisis, or incredibility stupid president/congress. The hedge should be simple, easy to adjust, and be easy to exchange for goods and services. That's where BTC comes in for me (and I think many others like me).

I'm not looking for amazing returns (they would be nice though), I'm looking to maintain my purchasing power.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #143 on: July 14, 2017, 07:26:48 PM »
Update on the mining experiment.


(click to zoom in)

The recent decline in cyptocurrency prices has essentially halted the growth in difficulty for ZEC mining, but the difficulty isn't going down at all either. Presumably everyone who bought new graphics cards during the recent runup is trying to recoup as much of their investment as possible even if the decline in price is great enough that buying new graphics cards for mining doesn't make financial sense at the moment (and since all the other currencies seem to be moving down in concert people cannot simply switch over to mining a different currency). So unless the price decline continues to the point where mining drops below the cost of the electricity to run the cards or the value of another currency that's mineable with GPUs spikes, I don't expect mining difficulty to actually decline.

I'm having a lot of fun gaming out different people's incentives and the possibilities in different future scenarios. However, it seems like this might be a stressful time if I had sunk real money into my mining hardware.

Link to the original description of the ZEC mining experiment.

Link to details of how I updated to include electrical costs (thanks CanuckExpat)
« Last Edit: July 14, 2017, 09:48:17 PM by maizeman »
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OneCoolCat

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #144 on: July 14, 2017, 09:20:27 PM »
Update on the mining experiment.


(click to zoom in)

The recent decline in cyptocurrency prices has essentially halted the growth in difficulty for ZEC mining, but the difficulty isn't going down at all either. Presumably everyone who bought new graphics cards during the recent runup is trying to recoup as much of their investment as possible even if the decline in price is great enough that buying new graphics cards for mining doesn't make financial sense at the moment (and since all the other currencies seem to be moving down in concert people cannot simply switch over to mining a different currency). So unless the price decline continues to the point where mining drops below the cost of the electricity to run the cards or the value of another currency that's mineable with GPUs spikes, I don't expect mining difficulty to actually decline.

I'm having a lot of fun gaming out different people's incentives and the possibilities in different future scenarios. However, it seems like this might be a stressful time if I had sunk real money into my mining hardware.

Does that chart suggest you are losing money due to electricity?  Mining is still profitable.
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maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #145 on: July 14, 2017, 09:45:34 PM »
Nope. I'm just earning money more slowly if you account for the extra charge on my electrical bill. If I was losing money (after electricity) the slope of the blue line would be negative.

Right now I'm still making approximately 4x as much from mining as I pay for the extra electricity, which is a reasonable profit margin if you don't worry about paying off the cost of the mining right. A few weeks ago it was 10x.

(I am losing money right now on the value of the bitcoins and ZEC I haven't converted to USD, but that's a completely separate issue from whether mining makes money or not.)
« Last Edit: July 14, 2017, 10:02:31 PM by maizeman »
"Itís a selective retirement," Richard explained, "a retirement from boring s**t."

My source code & my journal

Bicycle_B

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #146 on: July 14, 2017, 11:03:07 PM »
Maizeman, thanks for updating your experiments.  They add to the already thought-provoking discussions on this thread.

OneCoolCat

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #147 on: July 15, 2017, 10:27:44 AM »
Nope. I'm just earning money more slowly if you account for the extra charge on my electrical bill. If I was losing money (after electricity) the slope of the blue line would be negative.

Right now I'm still making approximately 4x as much from mining as I pay for the extra electricity, which is a reasonable profit margin if you don't worry about paying off the cost of the mining right. A few weeks ago it was 10x.

(I am losing money right now on the value of the bitcoins and ZEC I haven't converted to USD, but that's a completely separate issue from whether mining makes money or not.)

Ok thanks for the update.  I'm seeing similar results with my six underclocked 1060's.  I'm dual mining Eth and SC and the current value mined is $266 but with $45 of electricity costs.  A little closer to 5x electricity costs but it was 15x+ a couple weeks ago when the Eth difficulty was lower and the price higher.  I'm late to the party so I didn't actually benefit from the higher profit as I was building my rig.  Doh!  I'm in it for the longrun though and 4x cost is still not a bad return.  I'm speculating the prices of coins will drop atleast 50% before they go up a bit.  I have a weird feeling Eth will go back down to $45.  It's pure speculation though and I'm not selling what I have until mid-August-September.
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maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #148 on: July 15, 2017, 01:27:35 PM »
I haven't messed around at all with underclocking. Do you find that it makes a significant difference in your power consumption?

Back when electricity was only 10% of my mining income, it seemed like it wasn't a great trade off to spend time trying to optimize power consumption, but if current trends continue I imagine it's something I'll want to explore more.
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OneCoolCat

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #149 on: July 16, 2017, 09:00:51 AM »
I haven't messed around at all with underclocking. Do you find that it makes a significant difference in your power consumption?

Back when electricity was only 10% of my mining income, it seemed like it wasn't a great trade off to spend time trying to optimize power consumption, but if current trends continue I imagine it's something I'll want to explore more.

Definitely.  I can get each of my 6 gpu's to mine Ether with an additional 3mh/s by reducing power to 65% from 100% (default settings) and increasing memory.  My rig consumes 520 watts and gets 141mh/s Ether and 1080 mh/s SC.  My SC hash is lower when dual mining because my cards are only 3gb.  I haven't measured its power consumption above 65% power but the difference between 60 and 65% was 28 watts an each card gained .5% Ether mh/s.  If prices continue to plummet i will adjust it down to 60%.

I'm not sure if this is true but I've read AMD's are not stable when underclocked.  I underclock 6x GTX 1060's.
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