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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Tonyahu on June 23, 2017, 01:31:26 PM

Title: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on June 23, 2017, 01:31:26 PM
OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion

(https://images.angelpub.com/2017/03/41876/fintech_responsive.jpg)
Hey MMers,

This thread is not to discuss if crypto-currencies are good, bad, high risk, low risk...etc but simply to post your current/future holdings. This should start a positive discussion that will leave us all smarter and more wealthy. Please do not post here with negative generalized and non-factual based statements or opinions.

Core positions:

- Ethereum
https://www.youtube.com/watch?v=0UBk1e5qnr4&feature=youtu.be (https://www.youtube.com/watch?v=0UBk1e5qnr4&feature=youtu.be)
- Bitcoin
- Monero
- Ardor
- EOS


I am a firm believer in Ethereum and Monero long term.  I look forward to hearing from you all.

Cheers,

Anthony
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Financial.Velociraptor on June 23, 2017, 01:36:08 PM
Ether was briefly at 10 cents today during a flash crash.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on June 23, 2017, 01:40:03 PM
Ether was briefly at 10 cents today during a flash crash.

That is false. Ether has not dipped under ~$320 on any exchanges today.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Financial.Velociraptor on June 23, 2017, 01:42:02 PM
Ether was briefly at 10 cents today during a flash crash.

That is false. Ether has not dipped under ~$320 on any exchanges today.

Bloomberg is reporting that it did: https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo (https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: ketchup on June 23, 2017, 01:48:36 PM
0.05303289 BTC.  About $143 at present exchange rates.  Currently generating about 0.0053 BTC/day.

I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on June 23, 2017, 01:58:13 PM
0.05303289 BTC.  About $143 at present exchange rates.  Currently generating about 0.0053 BTC/day.

I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.

Very cool! Have you considered mining other coins? Bitcoin miining is very competitive but there are other coins you may receive higher USD gains from (unless your plan is to hold the BTC after you get it, of course).

Ether was briefly at 10 cents today during a flash crash.

That is false. Ether has not dipped under ~$320 on any exchanges today.

Bloomberg is reporting that it did: https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo (https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo)

YESTERDAY - There was market manipulation on one exchange  which caused a quick crash and recovery within seconds, technically yes it touched the price for a split second. The price quickly recovered.

But, ETH price is stable across all platforms. This was a Black Swan due to market manipulation. It's horrible but part of the game as this is an entirely new world of trading.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: ketchup on June 23, 2017, 02:07:35 PM
0.05303289 BTC.  About $143 at present exchange rates.  Currently generating about 0.0053 BTC/day.

I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.

Very cool! Have you considered mining other coins? Bitcoin miining is very competitive but there are other coins you may receive higher USD gains from (unless your plan is to hold the BTC after you get it, of course).
NiceHash automatically mines whatever is most profitable given present market conditions and efficiency of your hardware with different hashing algorithms.  It's been mostly having me mine ETH and Zcash.  It pays out in BTC once a week.

I consider it a speculative investment of about $1200 (three cards plopped into two existing PCs).  I hope to at least make my money back before mining is unprofitable on the hardware.  Worst case, I end up selling two, and it'll just mean I bought my girlfriend a fancy graphics card for her PC at a discount.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Vindicated on June 23, 2017, 02:17:57 PM

YESTERDAY - There was market manipulation on one exchange  which caused a quick crash and recovery within seconds, technically yes it touched the price for a split second. The price quickly recovered.

 It's unfortunate. I personally lost my trading stack ($15,000) but had friends lose much more (over $200,000 for one friend). It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.

But, ETH price is stable across all platforms. This was a Black Swan due to market manipulation. It's horrible but part of the game as this is an entirely new world of trading.

I'm so confused here.  You lost $15k yesterday, but it's just unfortunate?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on June 23, 2017, 03:00:47 PM
0.05303289 BTC.  About $143 at present exchange rates.  Currently generating about 0.0053 BTC/day.

I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.

Very cool! Have you considered mining other coins? Bitcoin miining is very competitive but there are other coins you may receive higher USD gains from (unless your plan is to hold the BTC after you get it, of course).

Ether was briefly at 10 cents today during a flash crash.

That is false. Ether has not dipped under ~$320 on any exchanges today.

Bloomberg is reporting that it did: https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo (https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo)

YESTERDAY - There was market manipulation on one exchange  which caused a quick crash and recovery within seconds, technically yes it touched the price for a split second. The price quickly recovered.

 It's unfortunate. I personally lost my trading stack ($15,000) but had friends lose much more (over $200,000 for one friend). It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.

But, ETH price is stable across all platforms. This was a Black Swan due to market manipulation. It's horrible but part of the game as this is an entirely new world of trading.

Huh? $15K (or $200K) of alleged value of cryptocurrency gone?  Sorta makes one wonder...

Who is going to be sued and where and by whom and what sort of recovery would be sought?

Since these currencies are not a real thing and the account values are not backed by, or legal tender according to, any country's government, I suspect that if a suit were somehow brought against a responsible party the court would consider these cryptocurrency regimes to be essentially Ponzi schemes.  Basically a system where new money is used to pay prior "investors" when the cash out.  I mean, not everyone could sell at once and get the cash market value of their cryptocurrency in actual cash right? In such situations, recovery --  if any is granted at all -- is usually limited to the actual amount of cash that one brought in and not to the amount of any paper (imaginary) gains that may have been reported to the dupe in the interim.

With any sort of investment scheme its always important to remember that the cash is gone at the point when one buys -- the investment or asset can be sold for cash again but to the extent there is a market.

These currencies are a "real" thing, you are misinformed on how block chain and block chain assets function. But yes, they are not FIAT currency if that is your comparison.

Furthermore, I lost 15K, a friend lost 200K and many people lost millions yesterday. There will be a massive lawsuit due to gross negligence of the exchange.



YESTERDAY - There was market manipulation on one exchange  which caused a quick crash and recovery within seconds, technically yes it touched the price for a split second. The price quickly recovered.

 It's unfortunate. I personally lost my trading stack ($15,000) but had friends lose much more (over $200,000 for one friend). It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.

But, ETH price is stable across all platforms. This was a Black Swan due to market manipulation. It's horrible but part of the game as this is an entirely new world of trading.

I'm so confused here.  You lost $15k yesterday, but it's just unfortunate?

Yes sir, very unfortunate. Given that the lost ETH is currently $15k in value, it will most likely be worth around $100,000 in a year or two.

Oh well, live and learn!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Bicycle_B on June 23, 2017, 04:41:18 PM
Tonyahu, sorry about your 15k.  If you don't mind my asking, does that leave you in a net gain or net loss position for your cumulative investments in crypto-currency?

I don't have any, so just curious.  Best of luck!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Retire-Canada on June 23, 2017, 04:57:43 PM
Yes sir, very unfortunate. Given that the lost ETH is currently $15k in value, it will most likely be worth around $100,000 in a year or two.

Oh well, live and learn!

If the price only crashed for a second or two why did you lose any money at all? If you started with $15K worth of that crypto currency and it went to $1 for a second then the price recovered you would still have $15K worth of it.

What did you learn?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Optimiser on June 23, 2017, 05:15:20 PM
0.05303289 BTC.  About $143 at present exchange rates.  Currently generating about 0.0053 BTC/day.

I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.

Is this worth doing if I don't have fancy graphics cards? What are good resources for a noob to learn about mining?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: WhiteTrashCash on June 23, 2017, 05:26:19 PM
I'd rather invest in something more stable and reliable than cryptocurrency. Like beanie babies.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Honest Abe on June 23, 2017, 05:36:08 PM
Geez... look I hold BTC and ETH and I have to tell you... all ETH guys do is pump, pump, pump.

All investments have risk, and all of the crypto space is immature from a technological standpoint. It does hold a tremendous amount of potential for solving many of the world's problems related to finance and property ownership. But investing in it is ONLY for people who have a strong stomach and a willingness to ride it out for a long period of time.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Rosy on June 23, 2017, 06:49:40 PM
Good thing I didn't buy in yet, I'd hate to have been wiped out right after I started. This is obviously an investment opportunity where one has to anticipate losing all and being called a fool - that's OK, I don't plan to put my life savings into it.

I am interested in Ethereum, mainly because from what I've read so far it has a lot more potential than bitcoin, which seems to be a one trick pony. Not that I really know what I am talking about - but I am setting aside a little fun money for crazy investments that I feel have potential. For me it falls under the category of risky investments, but hey, nothing ventured - nothing gained.

So where and how is the best place to begin?

Geez... look I hold BTC and ETH and I have to tell you... all ETH guys do is pump, pump, pump.

All investments have risk, and all of the crypto space is immature from a technological standpoint. It does hold a tremendous amount of potential for solving many of the world's problems related to finance and property ownership. But investing in it is ONLY for people who have a strong stomach and a willingness to ride it out for a long period of time.

So Honest Abe, what do you mean by pump?


Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: PDXTabs on June 23, 2017, 11:39:51 PM
I don't buy cryptocurrency other than to facilitate online purchases.

However, I am very interested in mining Ethereum and ZCash if there are every any RX-470s for sale again.

It seems like diversification to me?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 23, 2017, 11:47:38 PM
Following.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mxt0133 on June 24, 2017, 01:24:26 AM
Yes sir, very unfortunate. Given that the lost ETH is currently $15k in value, it will most likely be worth around $100,000 in a year or two.

Oh well, live and learn!

Would you care to share how exactly you lost $15K in ETH?  Did someone hack your account and stole them.  Isn't the whole point of blockchain so that people cant modify the chain and steal your money?  They would have to hack all the nodes to modify the transactions on who owns the currency right?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 24, 2017, 01:27:58 AM
He apparently had coins kept at that particular exchange with a stop loss order in that filled during the flash crash.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on June 24, 2017, 07:44:07 AM
I don't believe in crypto-currencies.  I don't think they are real.

just like the money in your bank account - roughly 8% of all money is physical, the rest 1's & 0's which "aren't real".

I'd rather invest in something more stable and reliable than cryptocurrency. Like beanie babies.

if you actually knew anything about them, you'd realize that most of them are very stable... it's apparent you're only aware of bitcoin, which is ironically the most antiquated token.

It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.

sorry for your loss. i highly doubt there will be a lawsuit as the GDAX crashed because someone dumped 100,000 ETH. those who lost anything either had stop losses or were trading on margin. were you?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on June 24, 2017, 12:12:47 PM
I'd been debating whether or not it made sense to start a thread about my experiment with crypto currency, but since I came back to the forum to discover there's already going on, here's my first update on my less than three week old old experiment with both mining (ZEC) and currency appreciation (BTC + a little ZEC). The numbers will seem quite low compared to folks like Tonyahu, but patterns should hopefully be representative.

Currently running 4 GTX 1060s (purchased for the experiment) and 1 GTX 970 (in the computer I use for VR). Have a 5th 1060 out of commission at the moment, potentially this is just an issue with a bad riser. 1060s are a bit slower than the cards a lot of folks run, but due the demand driving up the cost of 1070 on up, when I pulled the trigger these had the shortest payback time. Currently mining ZEC and getting paid in BTC through NiceHash but I've also experimented with mining ZEC directly through flypool.

I wanted to separate out the idea of "mining crypto currency for profit" from the idea of "owning crypto currency for price appreciation" in my records. "Mining income" assumes I sell everything for dollars at the prevailing price on the day it was earned. "Capital Gains/Losses" tracks the difference between mining income and the actual net worth of the cryptocurrency.  I jumpstarted the currency appreciation half of my experiment with ~0.44 bitcoins I found leftover on an old computer. Since if I wasn't doing the experiment I would have cashed that out, I reset my starting value on those coins to the price they would have received on the day I started the experiment.

My sunk costs would be lower if I built a second machine (by $200, or $400 if I subtract out what I spent on the last 1060 that may still come online at some point), but the only way I could have gotten to the point of knowing how to build the second machine was to build the first one. Currently 3 weeks in. Averaging about $13.50/day in mining income and $4.30/day in capital gains. If I can keep that up I'm 58 days from my break even point overall and 84 days away from my break even point considering only income from mining.

The rate at which the difficulty for ZEC mining is increasing has me a little concerned about the likelihood of success for my little experiment. From the start of my experiment to today, difficulty has increased from ~2M to ~3.5M. So far the price of ZEC has increased roughly proportionately ($240/ZEC->$360/ZEC, so I'm not seeing a big decline in my average daily mining take but it looks like the price may be starting to level off.

(https://i.imgpile.com/nNz0KW.png) (https://imgpile.com/i/nNz0KW)

Anyway, lots of things could go wrong, but it continues to be a fun experiment, the rack I built could easily scale to 24 total graphics cards if I ever decide to put real money into this, and worse case scenario, I've got everything I've spent so far down in my monthly accounts as entertainment/hobby spending, not investment.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Teachstache on June 24, 2017, 01:12:14 PM
Following. Spouse mines Eth & has a small amount of BTC from years ago.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: hm__ on June 24, 2017, 06:05:56 PM
The unfortunate: I started mining BTC back in 2012/2013  and also bought a few coins for fun when the value was under $20 USD but quickly gave up and sold because it seemed pointless and there was little immediate value to doing so. If I would have left my PC chugging along back then I would have thousands/hundreds of thousands $$ at this point.

Now: My rent includes flat rate utilities, so I have been taking advantage of that to mine BTC with a gaming PC I built 2 years ago. Seems like a good chance to make a small/albeit risk-free (no additional cost to me) investment in an otherwise risky investment.

Currently amassed only .03 BTC, mining at about .0013 BTC per day (somewhere around $100 per month at current exchange rate). Holding anything I mine long term and hoping that someday I randomly log in to find a massive increase in the value.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on June 24, 2017, 06:27:58 PM
i hold BTC and ETH.  i've been holding BTC for years and plan to continue to hold both as an asset not correlated to stocks/bonds.

my concern with ETH, wrt holding, is that it does not have its long-term issuance policy defined.  BTC is more "K.I.S.S." or "tried and true" and has been following a simple issuance schedule.  i know exactly how many bitcoin will have been created 10 years from now.  with ETH, 10 years from now, what will be happening with proof-of-stake?  and will that actually work in practice?  BTC doesn't have these questions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on June 24, 2017, 08:56:33 PM
BTC doesn't have these questions.

BTC has 3 mining pools controlling 51%+ of the hash. the largest pool (antpool) is controlled by bitmain which jihan wu started. jihan wu runs patented hardware (asicboost) which is incompatible with segwit, which is why the blockchain is stuck at 1MB and why he and people like roger ver were pushing for a secondary blockchain. segwit will supposedly activate with an expanded (to 2MB blocks), but it's such a fucking mess... trust me that for the people who are heavy into mining / investing, there are more questions than answers.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 24, 2017, 09:07:33 PM
MOD NOTE: About a dozen posts removed discussing whether or not crypto-currency counts as an "investment" or "speculation."

This thread is not for discussing semantics of what makes an investment, or if crypto-currencies count.

If you want to start a new thread to argue about this, feel free to do so, or look up one of the other crypto-currency threads that already has this same back and forth.  Please not derail this thread with this argument yet again.

Cheers!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: seattlecyclone on June 24, 2017, 09:44:41 PM
The unfortunate: I started mining BTC back in 2012/2013  and also bought a few coins for fun when the value was under $20 USD but quickly gave up and sold because it seemed pointless and there was little immediate value to doing so. If I would have left my PC chugging along back then I would have thousands/hundreds of thousands $$ at this point.

You sound like me. Back right around that time I experimented with CPU mining with a few cores I wasn't using on my work computer. Even at that point, CPU mining was considered not worthwhile, but I wasn't paying for the electricity and it was more of a way to educate myself than actually make money. After several weeks of this I had accumulated approximately 1 BTC and a few altcoins. Given the valuations at the time I was earning only about a dollar or two per week from it, and I had gotten all the educational value I wanted out of it, so I stopped mining because the money wasn't worthwhile. But looking back on it, getting a good fraction of a BTC per month on top of my regular salary would be nothing to sneeze at!

Since then I've occasionally used BTC to pay for online software bundles and the like (trading bits for bits, as it were), but haven't done any trading on exchanges. I still have about 1 BTC and a few thousand XRP from when they did a grid computing promotion a while back. I think I'm going to hold it a while and see where it goes. I have no immediate need to liquidate, but will be happy to do so if the value doubles a few more times.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: PDXTabs on June 24, 2017, 09:59:37 PM
arebelspy,

Perhaps I should have been more specific. There is a big difference between mining cryptocurrency and purchasing cryptocurrency, at least as far as investing. Of note, in the US, you are taxed on the cryptocurrency the day that you mine it at the ordinary income rate (https://bitcoin.tax/blog/filing-your-bitcoin-taxes-income-spending-mining/). This also means that if there is a big crash before you sell, you still get to pay tax!

There is also a big difference between PoW (Proof of Work) based cryptocurrencies (which, at this point is all of them?) and PoS (Proof of Share) based cryptocurrencies (Ethereum wants to move to a PoS model). No one knows what PoS will mean for Ethereum, no one has ever done it before. Ethereum has already had one hard fork, when they move to PoS they risk another. These things matter for investors.

More reading / watching:
https://motherboard.vice.com/en_us/article/an-idiots-guide-to-building-an-ethereum-mining-rig
https://www.cryptocompare.com/mining/mineshop/ethereum-mining-rig-168mhs/
https://www.youtube.com/watch?v=OfE_QidD75M
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on June 24, 2017, 10:10:30 PM
I'm following with curiosity, and to remind myself to learn more.

I'm interested in the blockchain technology and it's application. Have a very small (hundreds of USD) holding of BTC at the moment, for no particularly good reasons except curiosity, "skin in the game" to give myself incentive to  learn more  (and speculation) :) I may add a bit of ETH, .

I haven't been mining, but made my small purchases with Coinbase (https://www.coinbase.com/join/5925a32688fc15120c64f4c6). I think I'm gonna play at it with combining with other hobby and eat the large fees to empty out some credit card gift cards I have lying around. The volatility is enough, that it sort of "absorbs" the fees (all of this is with no good reason).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: aspiringnomad on June 24, 2017, 10:27:53 PM
Own about $4k USD worth of ETH that I initially purchased for much less. I've been aware of and/or following distributed ledger technology from early days thanks to my dad being a comp sci professor who took interest and a couple friends being big BTC promoters. They've obviously done well, but I was always reticent to buy in since I've had serious doubts about BTC's use case and the restrictiveness of the underlying code. And I still have those doubts, so I'm pretty bearish on BTC as anything other than a store of value (whatever the hell that means, I still can't figure out gold either) or as a means of conducting illicit activity (and I want nothing to do with that). But I'm very bullish on applications that use distributed ledger tech to remove friction, so I'm optimistic about the use case for the Ethereum protocol. I've also perused some of the work put out by Ethereum's founder and think the hype surrounding him is legit. But to be honest, I'm neutral on ETH itself despite owning some since I have no idea how its protocol's usefulness will impact ether's selling price, especially in a world with new coins with various features launched seemingly every day.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 24, 2017, 10:55:33 PM
Perhaps I should have been more specific. There is a big difference between mining cryptocurrency and purchasing cryptocurrency, at least as far as investing.

To clarify: Feel free to talk about these two things, and how they differ, and why you think they're important.  This post that I'm quoting, for example, was quite informative. There's just no need to quibble for pages about if one, or the other, or both, is, or is not, "investing" under various definitions of the word.  :)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on June 24, 2017, 11:12:16 PM
I'm in the process of making a rig.  I spent $2,100 on 6x PNY GTX 1060 3gb GPU's (on sale at BestBuy) and everything else.  It should all be here around July 4 and I'm going to set it up.  I will probably mine ZEC.  I think its fun and I do hope to mine enough coins to break even on the rig and electricity.  Hopefully I can break even after 4 months.

I will join a pool to mine.  I'm considering Claymore (if I can mine two coins at once with my GPU).  Nicehash seems interesting too but I'm not sure if I want to be paid in BTC. 

Is nicehash a pool?  What do they charge?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: starguru on June 25, 2017, 07:37:17 AM
How would one even go about buying ethereum coins (on a mac)?


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 25, 2017, 07:39:07 AM
How would one even go about buying ethereum coins (on a mac)?

Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way.  Make sure to move them off to your own wallet after.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: wienerdog on June 25, 2017, 07:48:16 AM
Adding this video playlist as it is interesting for a newbie.

https://www.youtube.com/playlist?list=PLiFMZOlhgsYKKOUOVjQjESCXfR1cCYCod

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: tralfamadorian on June 25, 2017, 08:41:42 AM
following
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: starguru on June 25, 2017, 09:09:00 AM
How would one even go about buying ethereum coins (on a mac)?

Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way.  Make sure to move them off to your own wallet after.
Is coinbase what everyone uses?  Is there a chance someone can run off with customers funds on that platform?


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 25, 2017, 09:17:36 AM
How would one even go about buying ethereum coins (on a mac)?

Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way.  Make sure to move them off to your own wallet after.
Is coinbase what everyone uses?  Is there a chance someone can run off with customers funds on that platform?


Sent from my iPhone using Tapatalk

Note that my only other step was to move the coins to your own wallet. You should never keep coins at an exchange, because they can be, and are, hacked.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: starguru on June 25, 2017, 09:58:19 AM
How would one even go about buying ethereum coins (on a mac)?

Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way.  Make sure to move them off to your own wallet after.
Is coinbase what everyone uses?  Is there a chance someone can run off with customers funds on that platform?


Sent from my iPhone using Tapatalk
Title: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: starguru on June 25, 2017, 10:00:05 AM
How would one even go about buying ethereum coins (on a mac)?

Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way.  Make sure to move them off to your own wallet after.
Is coinbase what everyone uses?  Is there a chance someone can run off with customers funds on that platform?


Sent from my iPhone using Tapatalk

Note that my only other step was to move the coins to your own wallet. You should never keep coins at an exchange, because they can be, and are, hacked.


I'll have to figure that part out.  Any opinions on the Gemini exchange?  Seems more regulated and doesn't appear to support lite coin.


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on June 25, 2017, 10:32:22 AM
How would one even go about buying ethereum coins (on a mac)?

Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way.  Make sure to move them off to your own wallet after.
Is coinbase what everyone uses?  Is there a chance someone can run off with customers funds on that platform?


Sent from my iPhone using Tapatalk

Note that my only other step was to move the coins to your own wallet. You should never keep coins at an exchange, because they can be, and are, hacked.


I'll have to figure that part out.  Any opinions on the Gemini exchange?  Seems more regulated and doesn't appear to support lite coin.


Sent from my iPhone using Tapatalk

check out bittrex.com

bittrex was (and still might be) the only exchange which was dedicated to being fully and legally compliant with the ever changing crypto landscape. they were one of the first to apply for new york's bit license.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: andystkilda on June 25, 2017, 10:55:19 AM
I want to learn more about the field but I am buying a small portion of ETH (probably in the low thousands or tens of thousands) for now as an initial investment.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: aspiringnomad on June 25, 2017, 12:24:27 PM
How would one even go about buying ethereum coins (on a mac)?

Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way.  Make sure to move them off to your own wallet after.
Is coinbase what everyone uses?  Is there a chance someone can run off with customers funds on that platform?


Sent from my iPhone using Tapatalk

Note that my only other step was to move the coins to your own wallet. You should never keep coins at an exchange, because they can be, and are, hacked.

I moved mine from Coinbase to Jaxx based on a friend's recommendation. But yeah, definitely get them off whatever exchange you use and into a wallet.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: farfromfire on June 26, 2017, 06:56:57 AM
Seeing how volatile crypto currencies are, and considering that exchanges will not stop trading no matter what, margin trading is pretty dumb.

I hold some eth for the long term.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on June 26, 2017, 11:08:47 AM
Great discussions so far guys, I hope we can get many more to learn about this developing technology.

Tonyahu, sorry about your 15k.  If you don't mind my asking, does that leave you in a net gain or net loss position for your cumulative investments in crypto-currency?

I don't have any, so just curious.  Best of luck!

The exchange actually decided to credit those who lost due to it being blatant market manipulation. But if that had still been a loss, I am still up nearly 700%.

Geez... look I hold BTC and ETH and I have to tell you... all ETH guys do is pump, pump, pump.

All investments have risk, and all of the crypto space is immature from a technological standpoint. It does hold a tremendous amount of potential for solving many of the world's problems related to finance and property ownership. But investing in it is ONLY for people who have a strong stomach and a willingness to ride it out for a long period of time.

There is that "pump" aspect in most of the sub-communities. I am very long on ETH so short term I am not too concerned bout. Right now is a good time to get in due to the large dip due to that troublesome Bitcoin.


Good thing I didn't buy in yet, I'd hate to have been wiped out right after I started. This is obviously an investment opportunity where one has to anticipate losing all and being called a fool - that's OK, I don't plan to put my life savings into it.

I am interested in Ethereum, mainly because from what I've read so far it has a lot more potential than bitcoin, which seems to be a one trick pony. Not that I really know what I am talking about - but I am setting aside a little fun money for crazy investments that I feel have potential. For me it falls under the category of risky investments, but hey, nothing ventured - nothing gained.

So where and how is the best place to begin?

I would just keep reading up on Ethereum everywhere you can. I would look up "Ethereum Enterprise Alliance" as well, and look into what those big companies are doing with Ethereum.


JP Morgans "Quorum" is an interesting project.



Yes sir, very unfortunate. Given that the lost ETH is currently $15k in value, it will most likely be worth around $100,000 in a year or two.

Oh well, live and learn!

Would you care to share how exactly you lost $15K in ETH?  Did someone hack your account and stole them.  Isn't the whole point of blockchain so that people cant modify the chain and steal your money?  They would have to hack all the nodes to modify the transactions on who owns the currency right?

I had a margin long open and there was market manipulation causing a short term plummet to essentially $0. This caused me (and many others) to get our margins called (and some peoples stops to get blown up) and losees of millions of dollars. This is being remedied by the exchange though, I will not be eating the loss anymore. Thank God!

MOD NOTE: About a dozen posts removed discussing whether or not crypto-currency counts as an "investment" or "speculation."

This thread is not for discussing semantics of what makes an investment, or if crypto-currencies count.

If you want to start a new thread to argue about this, feel free to do so, or look up one of the other crypto-currency threads that already has this same back and forth.  Please not derail this thread with this argument yet again.

Cheers!


Thank you for your additions to this thread!

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on June 26, 2017, 11:39:47 AM
I am a simple troll and will hold my two bit coins that I purchased about a year ago for the long haul.  No other crypto currencies for me.

I was mining using an S9 for a while but I figured hardware only does down in value and the recent surge let me sell the unit for a small profit.  When I was mining I estimated my breakeven to be 1200$/BTC so was holding all the BTC and hoping for a surge. I net made about 20% mining so after I sold that BTC and hardware.

I don't know if I was speculating, investing or running a business but I am satisfied with the outcome :)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on June 26, 2017, 05:41:56 PM
happy bloody monday!

anyone buying the market on discount?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: TryingtoFIREinLAnow on June 27, 2017, 11:22:11 AM
following!!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: hodedofome on June 27, 2017, 12:23:42 PM
Some good thoughts I read the other day from Albert Wenger of Union Square Ventures (Tumblr, Twitter, Kickstarter, Zynga, Coinbase etc).

http://continuations.com/post/161700099130/monetary-policy-for-crypto-tokens

http://continuations.com/post/161776542685/optimal-token-sales
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: BobTheBuilder on June 27, 2017, 12:44:48 PM
I have to admit, I still don't see the deal about these "currencies". The generation scheme seems crazy to me. Just burning up electricity to compute useless hashes. Anyways I saw the potential for speculation too. I had a suitable graphics card in my PC, a Radeon RX 470. I loved my pick as far as love goes for computer stuff, but I sold it on ebay seeing the crazy bidding war over these cards. 363 Euros! I got it for 240 5 months ago. So here I am, not playing video games in the middle of summer, as I never do, waiting for prices to go down again to buy the next generation in autumn :-D
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on June 27, 2017, 12:49:00 PM
happy bloody monday!

anyone buying the market on discount?

Grabbed a few NMR today. Really hoping to add to my XMR and FCT position soon but thin on FIAT.

EOS ICO is intriguing but Terms and Conditions of coin are quite scary.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on June 27, 2017, 01:06:53 PM
People need to quit doing these stop losses.  A mentor of mine who is about 65 lost $17,000 during that stock market flash crash back in 2015.  It's even stupider with the crypto currencies since they are free from any SEC-type regulation. 

This past weekend I didn't check the prices at all and my grand total of 2 ETH's and 1 litecoin lost about $200 in value.  Boo-hoo.  My intention is to hold these until one year from their purchase date. 

Back when people were buying illegal drugs and paying out bonuses the IRS couldn't track with bitcoin, it was actually being used as a currency.  Now that you can't really buy anything with bitcoin or ETH that you can't with regular cash, they have no special use and everyone's just speculating. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on June 27, 2017, 01:33:33 PM
I'm just going to leave this link here for all of the "Vanguard Index Funds or Bust!" people coming in here and blabbering that cryptocurrencies are a joke.  That's because there's more to Blockchain technology that you haven't educated yourself on.  I can only give you my opinion and suggestion that you should, at the least, learn about them.

http://www.goldmansachs.com/our-thinking/pages/blockchain/  (http://www.goldmansachs.com/our-thinking/pages/blockchain/)

Blockchain Technology will have a very large effect on many industries.  IMO this is one of the greatest investment opportunities of a generation.  But there will be risks, scams, and security measures we will have to wade through.   

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: thenextguy on June 27, 2017, 02:50:18 PM
People need to quit doing these stop losses.  A mentor of mine who is about 65 lost $17,000 during that stock market flash crash back in 2015.  It's even stupider with the crypto currencies since they are free from any SEC-type regulation. 

This past weekend I didn't check the prices at all and my grand total of 2 ETH's and 1 litecoin lost about $200 in value.  Boo-hoo.  My intention is to hold these until one year from their purchase date. 

Back when people were buying illegal drugs and paying out bonuses the IRS couldn't track with bitcoin, it was actually being used as a currency.  Now that you can't really buy anything with bitcoin or ETH that you can't with regular cash, they have no special use and everyone's just speculating.

It's absolutely speculation, no doubt. But money only has value if everyone agrees it has value. There are some unique properties of cryptocurrencies (decentralization, limited supply in some cases, etc.)  that people seem to agree give them value. So here we are.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 27, 2017, 03:32:58 PM
I'm just going to leave this link here for all of the "Vanguard Index Funds or Bust!" people coming in here and blabbering that cryptocurrencies are a joke.  That's because there's more to Blockchain technology that you haven't educated yourself on.  I can only give you my opinion and suggestion that you should, at the least, learn about them.

http://www.goldmansachs.com/our-thinking/pages/blockchain/  (http://www.goldmansachs.com/our-thinking/pages/blockchain/)

Blockchain Technology will have a very large effect on many industries.  IMO this is one of the greatest investment opportunities of a generation.  But there will be risks, scams, and security measures we will have to wade through.

The block chain is great.

That doesn't mean the currencies will necessarily have any value.

Etherium the block chain will be successful. That doesn't mean ETH the currency will, they're two separate things.

(Obviously you know this, but it makes me wonder why you bring up block chain in a digital currency thread except to confuse. Yes, block chains are useful. That's not an argument that a corresponding digital currency will be, or will last.)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on June 27, 2017, 07:44:27 PM
I'm just going to leave this link here for all of the "Vanguard Index Funds or Bust!" people coming in here and blabbering that cryptocurrencies are a joke.  That's because there's more to Blockchain technology that you haven't educated yourself on.  I can only give you my opinion and suggestion that you should, at the least, learn about them.

http://www.goldmansachs.com/our-thinking/pages/blockchain/  (http://www.goldmansachs.com/our-thinking/pages/blockchain/)

Blockchain Technology will have a very large effect on many industries.  IMO this is one of the greatest investment opportunities of a generation.  But there will be risks, scams, and security measures we will have to wade through.

The block chain is great.

That doesn't mean the currencies will necessarily have any value.

Etherium the block chain will be successful. That doesn't mean ETH the currency will, they're two separate things.

(Obviously you know this, but it makes me wonder why you bring up block chain in a digital currency thread except to confuse. Yes, block chains are useful. That's not an argument that a corresponding digital currency will be, or will last.)

I bring it up because I believe the blockchain technology is the underlying important part of these "cryptocurrencies," and that a lot of people do not understand that.  A lot of people, especially ones that instantly dismiss crypto as valueless magic internet coins, have not delved into the technology behind them and how it could possibly be disruptive. 

You are absolutely correct that a corresponding digital "currency" or coins made on top of a blockchain will not necessarily have value.  There are ALOT of cryptocurrencies out there and many are a joke, or a scam. Many will eventually be worthless, although they have a USD value tied to them at the moment.  ALL of the current cryptocurrencies out right now, including Bitcoin or Ethereum, could be valueless at some point.   But there are many of these distributed ledger technologies that have different porotocols looking to be the one to change certain industries.  You and I know, Ethereum doesn't even consider itself a currency.  It just has a protocol for "gas" (Ether) and these are what everyone are trading.  But others may not know that. 

A new, advanced distributed ledger protocol could be released, which has a "coin" that becomes extremely valuable,  or there may be companies implementing Blockchain technology that increase greatly in value. But there will be investment opportunities, even if not by purchasing these coins directly.  There may even be a Vanguard index fund tracking a whole sector based on blockchain technology in the future! :)

I thought some might could benefit from the link, if they are curious.  Also, the title of the thread did say "Blockchain / Crypto-Currency Portfolios and Discussion."
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: signhere on June 28, 2017, 08:43:17 AM
Don't post here much but since I've gained so much valuable information from the site, though I'd give back a little.

Blockchain technology is possibly the next paradigm shift in technology. Everyone wants exposure to the next internet/mobile phone/integrated circuit/assembly line. The problem with blockchain technology is that it isn't clear how to get  financial exposure to it. Buying BTC or ETH may get you there, it may not. Think of it as believing cell phones being the next big thing and buying stock in Nokia. The difference is that if the cell phone failed, you still have an investment in a real company making other products. With cryptocurrencies, you're presumably going to be left with a worthless digital asset.

I have around 10% of my portfolio in crypto right now and plan to hold for at least a few years.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on June 28, 2017, 09:55:21 AM
Don't post here much but since I've gained so much valuable information from the site, though I'd give back a little.

Blockchain technology is possibly the next paradigm shift in technology. Everyone wants exposure to the next internet/mobile phone/integrated circuit/assembly line. The problem with blockchain technology is that it isn't clear how to get  financial exposure to it. Buying BTC or ETH may get you there, it may not. Think of it as believing cell phones being the next big thing and buying stock in Nokia. The difference is that if the cell phone failed, you still have an investment in a real company making other products. With cryptocurrencies, you're presumably going to be left with a worthless digital asset.

I have around 10% of my portfolio in crypto right now and plan to hold for at least a few years.

My view of this is if you're really convinced that a general technology (blockchains, AI, 3D printing, drones, CRISPR, robotic warehouses, or whatever else) is going to change the world the only way to really get exposure to it is to develop expertise in the field. As your Nokia example points out, it's quite easy to be right about the technology but for none of the publicly traded companies working in the area when you make that realization to be good investments with the benefit of hindsight.

Groundbreaking change the way people live their day to days lives stuff tends to either come out of startups (privately held until after most of their explosive growth has already happened) or giant companies where the impact of some amazing new advance that comes out of one of their R&D units gets averaged out with a huge amount of other business as usual economic units before it filters back into shareholder value.

FWIW, I agree with you that blockchains are going to be, in fact are already becoming, a game changer, regardless of what happens with the current batch of cryptocurrencies.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on June 28, 2017, 10:00:35 AM
So do people here believe that blockchain will allow banks and other entities with a lot of IT staff employed in security to significantly reduce their staffs?  If so, it portends a significant long-term productivity gain. 

But as a poster just noted, if there is no "blockchain company", then there is no specific place in which to invest. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Ichabod on June 28, 2017, 10:04:10 AM
Blockchain technology is possibly the next paradigm shift in technology. Everyone wants exposure to the next internet/mobile phone/integrated circuit/assembly line. The problem with blockchain technology is that it isn't clear how to get  financial exposure to it. Buying BTC or ETH may get you there, it may not. Think of it as believing cell phones being the next big thing and buying stock in Nokia. The difference is that if the cell phone failed, you still have an investment in a real company making other products. With cryptocurrencies, you're presumably going to be left with a worthless digital asset.

Have you thought about getting exposure through AMD or Nvidia? I don't know that blockchain technology would be possible without GPUs. That also gets you exposure to VR and some of the deep learning technology that rely on GPUs.

Companies that sell cloud computing (Amazon with AWS or Microsoft with Azure) might also have exposure. I've read that AWS could profitably mine currencies if they reach certain price points.

You can also get exposure through the companies that plan to leverage the blockchain or stand to otherwise benefit from it. I'd start by looking at the companies in Enterprise Ethereum Alliance. I'd be interested to hear of other ways to get exposure.

If cryptocurrencies do become a big part of the economy, a basket of those stocks should capture much of those growth with much less risk than a basket of the cryptocurrencies themselves.

Having said all that, I'm still 100% index funds, but it's all fascinating.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: BrandNewPapa on June 28, 2017, 11:25:54 AM
My Current holdings:

BTC: 0.579 (mined)
ETC: 3.425 (purchased @$90)
LTC: 4.000 (purchased @$30)

Just planning to hold. I want to buy some more BTC, missed my chance this week end the price dipped, but I didn't have any spare cash.

I experimented with mining a few years ago. I purchased two Antminer S1s from eBay for $700 shipped with a power supply. I ran them for about 8 months, generating about 2.5 BTC. Then the price started to plummet and my mining was losing money (electric cost more per day than I was generating in BTC), so I stopped. The market kept falling and it seemed like everyone was loosing faith in BTC, so I decided to sell about 2 BTC so I could at least break even. I also sold the miners on craigslist for $100. Regretting those decisions now!

Was thinking about emailing the guy that bought them to see if he still has 'em.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on June 28, 2017, 04:28:59 PM
The generation scheme seems crazy to me. Just burning up electricity to compute useless hashes.

not every token is mined (ie. XRP (ripple) - their protocol is based on consensus. depending on who you talk to (99% of the "crypto-anarchists"), they're considered a travesty to this "new world", despite having the fastest and most innovative technology.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on June 28, 2017, 05:03:46 PM
The generation scheme seems crazy to me. Just burning up electricity to compute useless hashes.

not every token is mined (ie. XRP (ripple) - their protocol is based on consensus. depending on who you talk to (99% of the "crypto-anarchists"), they're considered a travesty to this "new world", despite having the fastest and most innovative technology.

Please don't come and shill XRP in here bud...lol just kidding!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Nad on June 28, 2017, 05:41:41 PM
Do you guys have any resources to learn more about the different cryptocurrencies?

I just got in (BTC and ETH) yesterday with a tiny fraction of my portfolio and my position is already 25% up. It doesnt make any sense to me that there are such big swings. My plan is to increase my position to maybe 5-10% of my portfolio because I feel there is something there but I want to get a better understanding first.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on June 28, 2017, 06:27:35 PM
Please don't come and shill XRP in here bud...lol just kidding!

just stating facts 😉
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on June 28, 2017, 06:30:19 PM
Do you guys have any resources to learn more about the different cryptocurrencies?

i like / visit:

bitcointalk.org (messageboard and great place to learn)
bitcoinmagazine.com (news)
coindesk.com (news)
cointelegraph.com (news)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: dakota5176 on June 28, 2017, 06:42:07 PM
I am interested in this post and while I am not currently invested in any cryptocurrencies I have started following the market through coinbase.  I will probably start a position but I wanted to learn a little more about it.  Perhaps some kind soul could answer a few questions for me:

Is it too late to invest in Bitcoin?  Have I missed the train and should focus entirely on something like Eth? Or is it worth starting a small stake?

Obviously I would recognize that this is speculative and there are no guarantees. Of course like any Mustachian I would prefer not to lose my money entirely.  Can I use stop/losses effectively to hedge against risk?  If so what % do you set them for so that they're not constantly triggering in response to market volatility?

Do stock strategies apply to this market? For example should I dollar cost average a set amount every month?

Is it worth learning about the lesser known coins or do you have to be a computer expert to understand them?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Nad on June 28, 2017, 06:44:59 PM
i like / visit:

bitcointalk.org (messageboard and great place to learn)
bitcoinmagazine.com (news)
coindesk.com (news)
cointelegraph.com (news)

Awesome, thanks for the links!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on June 28, 2017, 08:29:36 PM
I am interested in this post and while I am not currently invested in any cryptocurrencies I have started following the market through coinbase.  I will probably start a position but I wanted to learn a little more about it.  Perhaps some kind soul could answer a few questions for me:

Is it too late to invest in Bitcoin?  Have I missed the train and should focus entirely on something like Eth? Or is it worth starting a small stake?

Obviously I would recognize that this is speculative and there are no guarantees. Of course like any Mustachian I would prefer not to lose my money entirely.  Can I use stop/losses effectively to hedge against risk?  If so what % do you set them for so that they're not constantly triggering in response to market volatility?

Do stock strategies apply to this market? For example should I dollar cost average a set amount every month?

Is it worth learning about the lesser known coins or do you have to be a computer expert to understand them?

The whole problem with Bitcoin is that it might experience a first-mover disadvantage.  Ethereum is the first competitor to really rise and start challenging it.

Also, as I mentioned previously, the cryptocurrencies can't really buy you anything right now that cash or paypal or whatever can't.  Bitcoin was actually being used as currency when Silk Road was up and during the brief period of time when the IRS didn't notice companies paying bonuses with Bitcoin.  At any moment some new window might appear and the cryptocurrencies will be able to do something cash can't.  Or it might never happen.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on June 29, 2017, 09:44:15 AM
Back when people were buying illegal drugs and paying out bonuses the IRS couldn't track with bitcoin, it was actually being used as a currency.  Now that you can't really buy anything with bitcoin or ETH that you can't with regular cash, they have no special use and everyone's just speculating.

Also, as I mentioned previously, the cryptocurrencies can't really buy you anything right now that cash or paypal or whatever can't.  Bitcoin was actually being used as currency when Silk Road was up and during the brief period of time when the IRS didn't notice companies paying bonuses with Bitcoin.  At any moment some new window might appear and the cryptocurrencies will be able to do something cash can't.  Or it might never happen.

This is the second time you've mentioned that.  I'm not sure why you think it is the case.

1) You can buy everything on the dark web that you could before. Just because one marketplace (Silk Road) is gone doesn't mean there aren't other places to buy the same things.

2) Cryptocurrencies have apparently been useful in countries with massively fluctuating, hyperinflating, or restricted currency (e.g. Venezuela) or places that have eliminated cash (e.g. India).  That's a use for it that cash can't do, because cash doesn't exist or is close to worthless.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on June 29, 2017, 11:58:04 AM
I had not thought of #2.  Probably useful in some situations for people in unstable areas, but then again, relatively few people have much money in poor countries to begin with, and those that do are more often than not up to no good. 

As for #1, I have no first-hand experience.  I am acquainted with people who did use silk road and because of the working knowledge they gained a few years ago they were early adopters of Ethereum and one bought $5,000 back in early March that is now worth about $30,000.  However I don't think any of them are actually using Bitcoin or Ethereum to buy or sell stuff anymore. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: ketchup on June 29, 2017, 12:00:25 PM
As for #1, I have no first-hand experience.  I am acquainted with people who did use silk road and because of the working knowledge they gained a few years ago they were early adopters of Ethereum and one bought $5,000 back in early March that is now worth about $30,000.  However I don't think any of them are actually using Bitcoin or Ethereum to buy or sell stuff anymore.
I know someone still using Bitcoin to purchase things online that they shouldn't.  It's definitely still being used for that.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on June 30, 2017, 08:58:53 AM
  However I don't think any of them are actually using Bitcoin or Ethereum to buy or sell stuff anymore.

Ether (the token of Ethereum) is not, and never was, intended to be used to buy or sell "stuff."
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: vodsonic on June 30, 2017, 10:23:00 AM
2) Cryptocurrencies have apparently been useful in countries with massively fluctuating, hyperinflating, or restricted currency (e.g. Venezuela) or places that have eliminated cash (e.g. India).  That's a use for it that cash can't do, because cash doesn't exist or is close to worthless.

I had not thought of #2.  Probably useful in some situations for people in unstable areas, but then again, relatively few people have much money in poor countries to begin with, and those that do are more often than not up to no good. 

In October of last year, India banned bills (cash) in denominations larger than the equivalent of about US$5. According to Fast Company (https://www.fastcompany.com/3066085/why-did-india-just-take-86-of-its-cash-out-of-circulation),

Quote
India runs on cash. According to Bloomberg, “India has among the highest usage of cash across global economies,” accounting for up to 98% of all transactions. Modi’s bill ban took 86% of it out of circulation, instantly. When he announced the ban on October 8, he gave just four hours notice.

To put this in perspective, consider that India is nearly as populous as China, and struggles to formally document or ID citizens in rural areas, many of whom don't even use surnames.

Banning banknotes in India is like banning coins in a penny arcade and expecting it to stay in business.

Of course any usuable tool, i.e. cryptocurrency, is going to get sucked in to fill the vacuum. For most people suffering under this kind of high-handed meddling in their lives, cash is not about running a criminal enterprise. It's about staying afloat.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on June 30, 2017, 08:01:53 PM
But as a poster just noted, if there is no "blockchain company", then there is no specific place in which to invest.

There are many blockchain companies, trying to create and apply technology in different fields (mainly financial), they are mainly (or all) privately held startups, small businesses, etc. And most will probably die before you hear of them.

You could invest in them and many would like funding but you would be investing in the private market (And you may have to be an accredited investor)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on July 01, 2017, 08:48:43 AM
The obvious question with certain things like this factom becomes: why can't another currency just duplicate it, and be used, if it becomes too expensive, thus capping the amount it'll grow?

From your first article:
Quote
Example: A big bank has 1,000,000 clients. Every day the bank needs to time stamp the status of its clients’ accounts, in an immutable way, with the possibility of segregating that data afterwards. Let’s assume 1 EC allows one to store the data of 1 client. You need 1,000,000 EC = 1,000 USD = 111 FCT. Over a month time, 111 * 30 = 3,330 FCT are burned for this sole purpose. As the supply is 73,000, you need only 73,000 / 3,330 = 22 entities to operate at this scale to consume the full 73,000, causing the total number of FCT to shrink substantially. To this example, add the demand for FCT triggered by the Bill & Melinda Gates project, and also the DHS security project, the Chinese smart city initiative, the dLoc project, etc. And this is only the beginning!

Of course, this exercise is done by keeping the price constant. The huge amount of demand for FCT will make the price skyrocket. In fact it has to, in order to prevent deflation. Keep in mind that very large institutions are in discussions with Factom and about to sign contracts. Plus, the Harmony suite was probably made with the help of big actors in the industry to get a tailor-made product. (Factom has a number of former exec-level real estate movers on their staff.) The take-away is this: the more companies that use the Factom protocol, the higher the price of FCT must climb.

Okay, so let's say a bank IS using a blockchain like this (which I think they will).  Why would they use FCT?  They can just create another blockchain, their own.  A BofA blockchain, and a Wells Fargo blockchain, etc.  Or there could be a "Banking" blockchain and a "medical" one, or whatever.

But when the price of FCT rises above the cost of just using another blockchain, why would anyone keep using Factom instead of a different one or recreating it?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on July 01, 2017, 10:37:03 AM
^Yes, I have had the same question.  What's interesting is that it puts us 500 years back, when early banks issued their own currencies. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Parkingmeter on July 01, 2017, 03:43:04 PM
I'd been debating whether or not it made sense to start a thread about my experiment with crypto currency, but since I came back to the forum to discover there's already going on, here's my first update on my less than three week old old experiment with both mining (ZEC) and currency appreciation (BTC + a little ZEC). The numbers will seem quite low compared to folks like Tonyahu, but patterns should hopefully be representative.

Currently running 4 GTX 1060s (purchased for the experiment) and 1 GTX 970 (in the computer I use for VR). Have a 5th 1060 out of commission at the moment, potentially this is just an issue with a bad riser. 1060s are a bit slower than the cards a lot of folks run, but due the demand driving up the cost of 1070 on up, when I pulled the trigger these had the shortest payback time. Currently mining ZEC and getting paid in BTC through NiceHash but I've also experimented with mining ZEC directly through flypool.

I wanted to separate out the idea of "mining crypto currency for profit" from the idea of "owning crypto currency for price appreciation" in my records. "Mining income" assumes I sell everything for dollars at the prevailing price on the day it was earned. "Capital Gains/Losses" tracks the difference between mining income and the actual net worth of the cryptocurrency.  I jumpstarted the currency appreciation half of my experiment with ~0.44 bitcoins I found leftover on an old computer. Since if I wasn't doing the experiment I would have cashed that out, I reset my starting value on those coins to the price they would have received on the day I started the experiment.

My sunk costs would be lower if I built a second machine (by $200, or $400 if I subtract out what I spent on the last 1060 that may still come online at some point), but the only way I could have gotten to the point of knowing how to build the second machine was to build the first one. Currently 3 weeks in. Averaging about $13.50/day in mining income and $4.30/day in capital gains. If I can keep that up I'm 58 days from my break even point overall and 84 days away from my break even point considering only income from mining.

The rate at which the difficulty for ZEC mining is increasing has me a little concerned about the likelihood of success for my little experiment. From the start of my experiment to today, difficulty has increased from ~2M to ~3.5M. So far the price of ZEC has increased roughly proportionately ($240/ZEC->$360/ZEC, so I'm not seeing a big decline in my average daily mining take but it looks like the price may be starting to level off.

(https://i.imgpile.com/nNz0KW.png) (https://imgpile.com/i/nNz0KW)

Anyway, lots of things could go wrong, but it continues to be a fun experiment, the rack I built could easily scale to 24 total graphics cards if I ever decide to put real money into this, and worse case scenario, I've got everything I've spent so far down in my monthly accounts as entertainment/hobby spending, not investment.

I'm curious if you're tracking/estimating your electricity costs and including that in your graph?

I think this could be one of those things like uber, where some of the "hidden" costs wipe out a significant portion of the return. It's even worse if your rigs are in an air conditioned space..
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 01, 2017, 05:14:33 PM
t's a good question. Electricity is a bit messier to track but based on my back of the envelope calculations I should be only spending an extra $25/month on electric if I achieve 100% uptime. My next monthly bill will be almost a complete month of mining, so I'll compare that to what I spent last June is see if that back of the envelope math is in the right ballpark. If so I'll probably put that in as a monthly deduction to the graph. To put that in context it's between 5-10% of the monthly income the mining rig is throwing off at the moment.

Mining rig is in an unused corner of the basement which stays quite cool even in summer (include the summer I went three months without a working AC), so my guess is that it isn't making my AC work any harder. If the experiment lasts will winter I may relocate the rig to an upstairs part of the house to harness the waste heat. But again I expect the effect of reduced heating costs, if any, to be too small to quantify.

Here's the updated graph. As you can see the recent decline in price for both BTC and ZEC is definitely having an effect on cumulative capital gains. On the mining side, my average daily earnings over the last week were 1/3 lower than the prior week.

(https://i.imgpile.com/nUhAaP.png) (https://imgpile.com/i/nUhAaP)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: YYK on July 02, 2017, 12:44:29 PM
Anyone tried lending on the call market for BTC?
I've know about cryptos for a long time but never bothered to get in, though I'm starting to consider taking a position as a portfolio diversifier.
Rather than buy/mine and hold for appreciation in the long run I'm interested in generating a yield from them with lending. Seems potentially extremely risky though, more than just holding such volatile currencies in the first place.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on July 02, 2017, 08:06:16 PM
t's a good question. Electricity is a bit messier to track but based on my back of the envelope calculations I should be only spending an extra $25/month on electric if I achieve 100% uptime.

If you are curious maybe borrow a killowat electricity monitor from someone (might affect your up-time to plug it in and out). I've heard some libraries lend them out to people. They are also cheap to buy, if you anticipate future use. I'd be curious to see electricity usage included in your charts.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 02, 2017, 09:34:49 PM
Your question reminded me that I actually own a kill-a-watt meter from an efficiency kick about five years ago. Followed me through three different states and I don't think I've taken it out of the box since the first time it was packed (until this evening). Thanks!

(https://i.imgpile.com/nUD7rX.jpg) (https://imgpile.com/i/nUD7rX)

86 watts just from turning the (dedicated mining) computer on. 356 watts once I start the mining software running. This is only three GPUs. The other two are in a computer that needs to stay online anyway. So let's budget those at the same marginal wattage per GPU (356-86)/3 = 90 watts exactly. So total wattage would be 356+90+90 = 536 watts. (536*24)/1000 = 12.8 kilowatt hours day. I'm paying ~$0.085/kilowatt-hour so that's $1.09/day or $33/day.* A bit higher than I estimated but the right order of magnitude. Corrected chart below.

(https://i.imgpile.com/nUDuda.png) (https://imgpile.com/i/nUDuda)

(Click for higher res version of the chart.)

*For those interested in the greenhouse gas emissions of cryptocurrencies, that means my mining operation is releasing an amount of carbon equivalent to burning one tank of gas (~11.5 gallons) per month (calculated using numbers taken from this source: https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: thenextguy on July 03, 2017, 08:52:37 AM
But as a poster just noted, if there is no "blockchain company", then there is no specific place in which to invest.

There are many blockchain companies, trying to create and apply technology in different fields (mainly financial), they are mainly (or all) privately held startups, small businesses, etc. And most will probably die before you hear of them.

You could invest in them and many would like funding but you would be investing in the private market (And you may have to be an accredited investor)

Here's a list of companies that are exploring blockchain technology.
https://entethalliance.org/members/

Granted, it's probably a small portion of their business, so it's not even remotely close to a pure play on blockchain.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 07, 2017, 04:15:21 PM
Almost have all my rigs built. My goal is $100 day. So far so good...

Little scared when I look at the stack of empty video card boxes in the corner. I really hope I can make enough to pay off the initial investment and let the rest ride. Current estimates is about a 4 month break even.

Wow! You're at ~10x my target daily income, but if you make it past break-even that starts to become serious money (my target is more just beer money). Good luck!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Cassie on July 07, 2017, 06:00:02 PM
Both my son and us have 17 bitcoins each. These were obtained by mining.  A few years ago some friends of ours lost 5k because my son kept telling them not to leave their coins at the exchange but they did not listen and lost it all.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on July 08, 2017, 07:21:05 AM
I have 6x gtx 1060's dual mining Eth and Sia.  I'm running on 492 watt's ang get 123mh/s hash on Eth and 960 mh/s hash on Sia.

I see a lot of potential in Sia.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on July 08, 2017, 08:06:27 AM
I see a lot of potential in Sia.

+1.

i don't mine SC, but think it was a great move for them to release a miner. they also have a super strong/active dev team.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: PDXTabs on July 08, 2017, 11:28:15 AM
In case anyone wants a quick overview of the Bitcoin blockchain this video is accessible:
https://youtu.be/bBC-nXj3Ng4 (https://youtu.be/bBC-nXj3Ng4)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on July 09, 2017, 07:10:15 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) if i use it to buy.  Also, how do i get my money out?  Back through my credit card? 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on July 10, 2017, 11:22:21 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) 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. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 10, 2017, 06:08:43 PM
In the last three weeks a few of the high flying altcoins have lost close to half of their value.

I'm sure there's a website somewhere that makes this same sort of graph, but I find it's useful to put the recent declines in the price of Ethereum and ZCash in a bit of context. Essentially ZEC, ETH, and DOGE are behaving like high beta stocks. When bitcoin is going up, they go up even more. When bitcoin goes down, they drop a lot more.

(https://i.imgpile.com/nU6aSw.png) (https://imgpile.com/i/nU6aSw)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on July 11, 2017, 04:28:33 PM
So let's talk hypotheticals, for a second.

How much would you be willing to gamble/invest (whichever term you prefer) on this?

Typical "rule of thumb" is speculate with no more than 5% of your portfolio.

So I was thinking about this in terms of real numbers.

I'll use some large round numbers to illustrate it.  Let's say you have 1MM. 5% of that is 50k.  Alright.

So say you take 50k, and split it among 3 Cryptocurrencies.  16.67k each.

Let's say one of them grows 1000% (10x increase).  It's now worth 167.67k.  We'll pretend the others hold their value (likely if one goes up, the others will too, but we're granting a pretty large increase. You can maths it so one goes up 500% and the others 250% each, or whatever, but either way, let's say it essentially equals out to 10x total increase on 1/3 of it).

You've made 150k profit, yay!

But you risked 50k to do it.  If cryptocurrencies as a "thing" don't pan out (and again, correlated), and all three go to essentially 0, you lose it all.

Is it worth risking 50k to make 150k (3x on your money)?  Do you think 3.3 to 1 odds is a good payoff for betting that you'll get a 10x increase rather than a (mostly complete loss)?

Now all this math hinges on the fact that I set up the scenario as you splitting your investment.  Naturally if you have it all in one, the whole thing could 10x (and your 50k could be 500k), but if you have it all in one, and you pick the wrong one, you're more likely to go bust, and less likely to have it go 10x than if you have it split.  Say Factom is chosen tomorrow by banks. Or Siacoin replaces Dropbox/cloud storage. And they 10x. But you were in ETH.

So to increase your change of 10x, you split it, but in practical terms, that means a smaller part of your bet is in the part that 10x's (i.e. only 1/3 of your amount invested, in this case, rather than the whole thing, which reduces your payout from 10x to 3.3x).

The risk v. reward doesn't seem quite worth it to me, especially when I put it in actual numbers.

This is putting aside mining. That's strictly a question of "will the payout I get be more than I spent"?  I'm talking about holding and/or buying cryptocurrencies for appreciation purposes.

Thoughts?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on July 11, 2017, 07:20:16 PM
i don't think the "risk 50k to make 150k" scenario is worth it.  but if a particular cryptocurrency does make it big and survives/thrives for decades, especially an "eventually deflationary" currency, i think the 10x growth number is way too low.  that improves the upside of the gamble/invest scenario.

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.

on a related note something like the Bit20 "index fund" of multiple cryptocurrencies might be something to look into.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy 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?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Radagast 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL 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? 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL 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?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL 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
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy 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?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Socmonkey 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 (http://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/ (https://forum.mrmoneymustache.com/welcome-to-the-forum/new-side-gig-earning-possibility-steemit/)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat 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?

In a gold rush, it doesn't hurt to be the one selling shovels.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat 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."

Make hay while the sun shines!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg 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. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy 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?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 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

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: LessIsLess 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?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: farmecologist 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Kroaler 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$.   I think that was incredibly foolish and voiced my opinion as such.  That is the only reason I ended up reading this thread.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: kenaces on July 13, 2017, 11:48:20 AM
I am more interested in odds of getting 10x move up in BTC?  Or BTC's possible role as portfolio diversifier?  Hedge against some kind of US dollar crisis?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on July 13, 2017, 11:55:32 AM
Pure opinion.    My BIL put Most of their savings into Etherium at close to 300$.   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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy 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.)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Kroaler 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...
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg 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.


Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman 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*
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 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
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: cantgrowone 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.

Sent from my Nexus 6P using Tapatalk

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Krolik 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: BrandNewPapa 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 14, 2017, 07:26:48 PM
Update on the mining experiment.

(https://i.imgpile.com/nwUxK1.png) (https://imgpile.com/i/nwUxK1)
(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.  (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1600715/#msg1600715)

Link to details of how I updated to include electrical costs (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1610593/#msg1610593) (thanks CanuckExpat)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on July 14, 2017, 09:20:27 PM
Update on the mining experiment.

(https://i.imgpile.com/nwUxK1.png) (https://imgpile.com/i/nwUxK1)
(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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman 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.)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Bicycle_B 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat 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.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: StudentEngineer on July 16, 2017, 02:09:43 PM
I purchased 16 ethereum coins in november at ~$12 a coin then got fed up with the price moving sideways as btc took off from $600 to $2k+ and sold out at $12 or $13 then it took off to nearly $400..... If only I had put a couple thousand on eth at $12/coin.... thats a life changing amount of gains...

My biggest problem is that I don't understand the true fundamentals behind it.  I would have no idea how safe any coin is or how easy it would be for them to split etc... thus its extremely difficult to hold as it drops.

Any helpful info on that?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 16, 2017, 02:32:34 PM
What if is a very dangerous road to go down. I remember reading about bitcoin on slashdot years before it crossed the dollar parity threshold. This was back in the era before GPU mining, so all it would have taken was installing mining software on the old HTPC that've followed me through a half dozen moves to accumulate a non-trivial number of bitcoins. The second "what if" for me was back in early 2013, when I started to get excited about bitcoins for the first time (price was around $100/bitcoin), I figured out I could squeeze maybe $500/month out of my budget to start accumulating some but didn't end up following through for lots of silly reasons.

The thing to remember is that you make decisions with the time with the information you have at the time. Just because a decision turned out to have good or bad consequences with the benefit of hindsight doesn't tell you whether it was good or bad decision with the information you had at the time you made it.

My biggest problem is that I don't understand the true fundamentals behind it.  I would have no idea how safe any coin is or how easy it would be for them to split etc... thus its extremely difficult to hold as it drops.

Any helpful info on that?

In terms of safety, any particular cryptocurrency could go to zero (or close enough to zero so as to make no difference). That's the nature of currencies, they have value only because we all agree they do. Of course you could say the same of any non-crypto currency as well. In this way all currencies are different from stocks or commodities.

Unlike USD or RMB or Euros, there is also a chance the value of cryptocurrencies will increase 10x or maybe even 100x. How likely is zeroing out compared to the likelihood of increasing in price by, say, 10x or more for a given cryptocurrency? If I knew that I'd be rich.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: redstar on July 16, 2017, 02:38:08 PM
I am currently holding a bit in ETH, BTC, and LTC because they were easy to acquire with just GDAX and Coinbase. However, I'm looking to create a DIY index fund of currencies by market cap. The services that will handle this for me, like Shapeshift's Prism and ICONOMI aren't out to the public yet, so I figure I might do it myself by buying the top 10-20 coins.

The rebalancing would suck though.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 16, 2017, 02:58:03 PM
Interesting idea. Would you just go with the top twenty entries on this list? (https://coinmarketcap.com) I'd be temped to weed out currencies like ripple and bitshares that are really using blockchain technology to do something really different, but I don't know if that'd help or hurt over the long term.

If you do a cap weighted index, you shouldn't have to do much rebalancing at all, should you?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: redstar on July 16, 2017, 03:14:10 PM
Yes, something like that. I'm tempted to weed out certain coins that I don't believe in, but I may just be overconfident, so I feel like I should trust the index.

Rebalancing within the index shouldn't be a problem with market cap weighting (except when new coins enter/leave?), but the volatility relative to the rest of my portfolio will probably throw my asset allocations out of whack very quickly. I feel like most people rebalance like once a year, but in the cryptocurrency space, that would not be frequent enough.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: redstar on July 16, 2017, 03:32:29 PM
There seems to be something like this here: http://www.bittwenty.com/bit20.php

I haven't given it much of a look yet, and I'm not sure I trust them over doing it myself. It's worth noting that the do exclude certain coins like Ripple and Tether, and they also cap each coin to 10% of the index to avoid dominance.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 16, 2017, 03:40:43 PM
Gotcha. Yes, rebalancing into and out of your self-made index would indeed be a big pain. If I were doing it, I'd be tempted to just drop a chunk of money into it -- an amount I could afford to loose -- and then just let it ride without rebalancing. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 17, 2017, 07:11:14 AM
There seems to be something like this here: http://www.bittwenty.com/bit20.php

I haven't given it much of a look yet, and I'm not sure I trust them over doing it myself. It's worth noting that the do exclude certain coins like Ripple and Tether, and they also cap each coin to 10% of the index to avoid dominance.

That's very interesting. I didn't know there was a crypto index fund like that. I'll have to check it out. Seems like an easy way to diversify. Thanks for sharing that.

I wonder how they would handle a situation of a chain split for any given currency in the index. Nothing like that is mentioned on their site. Seems like it would be rather important for the trust of the investors to understand that.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on July 17, 2017, 07:47:50 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.

Thanks, thats good to know.  I'm still debating whether i should buy at the moment, knowing that it would be a buy and hold for now as they won't let me sell it at the moment. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on July 17, 2017, 01:07:56 PM
I purchased 16 ethereum coins in november at ~$12 a coin then got fed up with the price moving sideways as btc took off from $600 to $2k+ and sold out at $12 or $13 then it took off to nearly $400..... If only I had put a couple thousand on eth at $12/coin.... thats a life changing amount of gains...

My biggest problem is that I don't understand the true fundamentals behind it.  I would have no idea how safe any coin is or how easy it would be for them to split etc... thus its extremely difficult to hold as it drops.

Any helpful info on that?

regarding ETH, keep in mind that there is NO SUPPLY CAP. they were smart to capitalize on the enterprise aspect, which was extremely smart and IMO is the reason why they've managed to hold on.

even though cryptocurrencies are a new asset class, i would study investing psychology and fundamentals as most of them probably apply. many people have panicked and sold (some at huge losses), assuming the market will never come back. consider looking back through history with how every market downturn resulted in a market come back at some point. those who kept buying (dollar cost averaging) or just held on, ultimately fared better than those who panicked and sold.

*to add, when choosing a token to invest in/buy, look at tokens which have a real use case that could result in widespread adoption and active dev teams. with the proliferation of ICO's, read that company's white paper, and engage with the general crypto-community (bitcointalk.org for instance). good luck.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on July 17, 2017, 02:17:56 PM


consider looking back through history with how every market downturn resulted in a market come back at some point.

Well that's not true.

Quote
those who kept buying (dollar cost averaging) or just held on, ultimately fared better than those who panicked and sold.

Nor that.

Do you think there's never been any assets that went to zero?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on July 17, 2017, 07:20:39 PM
Well that's not true.

well, it is. financial markets ultimately recover at some point.

Quote
Nor that.
i'm not talking about a single asset, i mentioned markets.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: onewayfamily on July 17, 2017, 09:55:44 PM
There are also some markets that don't go to zero, and do recover, but you'd have to wait decades for the recovery. Which for many people would simply mean they have to exit all/part of their position as they need the money to spend or for other things, or the downturn in that market/asset class simply outlives them.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: cheddarpie on July 18, 2017, 06:52:19 AM
Following with some questions but haven't read the whole thread yet so will do that first ... :)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on July 18, 2017, 04:49:54 PM
Well that's not true.

well, it is. financial markets ultimately recover at some point.

Quote
Nor that.
i'm not talking about a single asset, i mentioned markets.

Tell me how the tulip market (https://en.wikipedia.org/wiki/Tulip_mania) is doing.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on July 18, 2017, 05:06:11 PM
Tell me how the tulip market (https://en.wikipedia.org/wiki/Tulip_mania) is doing.

great, my tulip portfolio is up 8.7% over the last 24hrs.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on July 18, 2017, 06:35:53 PM
why does tulip mania always come up in these discussions?  of course there are such things as bubbles in all kinds of markets.  looking at the charts in the wikipedia link or in the link below, tulip mania (even if the popular retelling is overblown) lasted only a couple years at most. 

cryptocurrencies have enjoyed an 8 year run.  so far so good outlasting the tulip bubble :)

https://stratechery.com/2017/tulips-myths-and-cryptocurrencies/ (https://stratechery.com/2017/tulips-myths-and-cryptocurrencies/)

another note: bubbles in cryptocurrencies have popped, dramatically, and several times even, and yet they are still hanging around.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on July 18, 2017, 08:35:42 PM
It comes up because it's an easy comparison.

I agree cryptocurrency is different, and I wouldn't even say it's necessarily in a bubble.  But it's a good ridiculous counter to ridiculous statements like these:
consider looking back through history with how every market downturn resulted in a market come back at some point.

Well that's not true.

Quote
those who kept buying (dollar cost averaging) or just held on, ultimately fared better than those who panicked and sold.

Nor that.

Do you think there's never been any assets that went to zero?

Those who kept buying always do better?  What about when it goes to 0? No market has ever gone to 0?  Tell that to the currency market for the Zimbabwe dollar.

What about when they sell (yes low) and put it into a market or asset that performs better going forward? The opportunity cost going forward is all that matters, and you can't say that someone who held always did better than someone who sold (and invested in something else).

Cryptocurrency has a lot going for it, possibly. We don't need hyperbole and inaccurate statements to muddy the waters.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 19, 2017, 05:51:55 AM
Tell me how the tulip market (https://en.wikipedia.org/wiki/Tulip_mania) is doing.
great, my tulip portfolio is up 8.7% over the last 24hrs.

The interesting question is why did it go up 8.7% in one day? 
Was there a major announcement? 
Have the fundamentals changed? 
Where do we expect the value to go tomorrow or next week?

I believe this kind of growth/speculation is damaging in the long run.  I experienced the dot com hysteria and subsequent crash - this feels very similar.

Actually yes, there was pretty good news yesterday that a large number of Bitcoin miners have begun running the new code release yesterday that supports Segwit adoption. That's very good news. The recent drop in prices was related to concern about whether or not there would be a chain split come August first. The fact that so many miners are now adopting SegWit means that a chain split is less likely and users of Bitcoin are more confident. I think the August 1st upgrade date will be a non-issue and Bitcoin will be able to facilitate a lot more transactions than previously and this will result in a large price increase by the end of August.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on July 19, 2017, 05:59:17 AM
I purchased 16 ethereum coins in november at ~$12 a coin then got fed up with the price moving sideways as btc took off from $600 to $2k+ and sold out at $12 or $13 then it took off to nearly $400..... If only I had put a couple thousand on eth at $12/coin.... thats a life changing amount of gains...

My biggest problem is that I don't understand the true fundamentals behind it.  I would have no idea how safe any coin is or how easy it would be for them to split etc... thus its extremely difficult to hold as it drops.

Any helpful info on that?

regarding ETH, keep in mind that there is NO SUPPLY CAP. they were smart to capitalize on the enterprise aspect, which was extremely smart and IMO is the reason why they've managed to hold on.

even though cryptocurrencies are a new asset class, i would study investing psychology and fundamentals as most of them probably apply. many people have panicked and sold (some at huge losses), assuming the market will never come back. consider looking back through history with how every market downturn resulted in a market come back at some point. those who kept buying (dollar cost averaging) or just held on, ultimately fared better than those who panicked and sold.

*to add, when choosing a token to invest in/buy, look at tokens which have a real use case that could result in widespread adoption and active dev teams. with the proliferation of ICO's, read that company's white paper, and engage with the general crypto-community (bitcointalk.org for instance). good luck.

There currently isn't a single ICO with real world value. The ICOs are not equity in the company but based on some future value of utility. They are really dangerous instruments compared to Bitcoin/Ethereum that have at least some proven themselves with at least one use case currency


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 19, 2017, 06:40:52 AM
There currently isn't a single ICO with real world value. The ICOs are not equity in the company but based on some future value of utility. They are really dangerous instruments compared to Bitcoin/Ethereum that have at least some proven themselves with at least one use case currency


Sent from my iPhone using Tapatalk

There is so much wrong with this statement. To make a bold claim that there isn't a single ICO with real world value is vastly ignorant to the technology and what ICO's represent and the benefit they provide.

No, they're not equity in any company themselves, but they are equity in a protocol that a company could build itself completely off of. ICOs give developers the opportunity to develop protocols while giving incentive to users to adopt the protocol by giving them a share of the monetization that the protocol provides. Previously it was always a "chicken or the egg" scenario when trying to develop a new technology protocol. A developer might want to create a brand new protocol that would provide a huge benefit, but it might rely on a vast amount of early adopters to get the protocol off the ground.

A great example of this is decentralized cloud storage (ie, Siacoin and Storj). To get a new decentralized cloud storage solution off the ground, it would require a large number of users in the system to ensure there are enough nodes to decentralize the storage of files for new users looking to store their files. But, if there is no incentive to give people to put their hard earned free space up for rent, then it would be very difficult for a solution like that to ever get off the ground. ICOs provide an immediate stake into the solution by creating an incentive in the form of a crypto-currency to those individuals that become a part of the protocol. This allows a system like this to immediately build the framework needed to bring users and adoption to their new protocol. To say that this has no real-world value is insane. These solutions could dramatically shake up the cloud storage market that is in need of one desperately. A decentralized cloud storage solution you can trust is exactly what the market needs.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: AlanStache on July 19, 2017, 10:43:33 AM
Thanks for the great read.  I am nearly at a point to start small level speculation. 

Up thread ARS asked "is it worth it?":  My thought would be to dollar cost average into a few currencies at a total of few hundred
 per month total.  Doing this would postponed my barebones FIRE date by 2-3 months if the entire speculation went to zero.  I tested it assuming the buys were not part of my RE budget.  So the downside seems manageable while there is a good upside potential. 

Any thoughts on how crypto currencies would fair in a broad scale market down turn?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: thenextguy on July 19, 2017, 11:00:58 AM
Tell me how the tulip market (https://en.wikipedia.org/wiki/Tulip_mania) is doing.
great, my tulip portfolio is up 8.7% over the last 24hrs.

The interesting question is why did it go up 8.7% in one day? 
Was there a major announcement? 
Have the fundamentals changed? 
Where do we expect the value to go tomorrow or next week?

I believe this kind of growth/speculation is damaging in the long run.  I experienced the dot com hysteria and subsequent crash - this feels very similar.

Actually yes, there was pretty good news yesterday that a large number of Bitcoin miners have begun running the new code release yesterday that supports Segwit adoption. That's very good news. The recent drop in prices was related to concern about whether or not there would be a chain split come August first. The fact that so many miners are now adopting SegWit means that a chain split is less likely and users of Bitcoin are more confident. I think the August 1st upgrade date will be a non-issue and Bitcoin will be able to facilitate a lot more transactions than previously and this will result in a large price increase by the end of August.

This also happened yesterday: https://entethalliance.org/enterprise-ethereum-alliance-becomes-worlds-largest-open-source-blockchain-initiative/
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on July 19, 2017, 01:06:27 PM
There currently isn't a single ICO with real world value. The ICOs are not equity in the company but based on some future value of utility. They are really dangerous instruments compared to Bitcoin/Ethereum that have at least some proven themselves with at least one use case currency


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There is so much wrong with this statement. To make a bold claim that there isn't a single ICO with real world value is vastly ignorant to the technology and what ICO's represent and the benefit they provide.

No, they're not equity in any company themselves, but they are equity in a protocol that a company could build itself completely off of. ICOs give developers the opportunity to develop protocols while giving incentive to users to adopt the protocol by giving them a share of the monetization that the protocol provides. Previously it was always a "chicken or the egg" scenario when trying to develop a new technology protocol. A developer might want to create a brand new protocol that would provide a huge benefit, but it might rely on a vast amount of early adopters to get the protocol off the ground.

A great example of this is decentralized cloud storage (ie, Siacoin and Storj). To get a new decentralized cloud storage solution off the ground, it would require a large number of users in the system to ensure there are enough nodes to decentralize the storage of files for new users looking to store their files. But, if there is no incentive to give people to put their hard earned free space up for rent, then it would be very difficult for a solution like that to ever get off the ground. ICOs provide an immediate stake into the solution by creating an incentive in the form of a crypto-currency to those individuals that become a part of the protocol. This allows a system like this to immediately build the framework needed to bring users and adoption to their new protocol. To say that this has no real-world value is insane. These solutions could dramatically shake up the cloud storage market that is in need of one desperately. A decentralized cloud storage solution you can trust is exactly what the market needs.

Cloud storage market won't be shaken up from this. If you are technical you will realize that the extra redundancy requirements and high chance of data loss. Means they will never be competitive with Amazon. I worked for a large cloud hosting company and it's difficult even at massive scale to come to pricing parity with Amazon. Having some random people host it and with many more copies is a joke. It will never be in the same price realm. Each of these ICOs is hyping some future vaporware.


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Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on July 19, 2017, 01:48:09 PM
There currently isn't a single ICO with real world value. The ICOs are not equity in the company but based on some future value of utility. They are really dangerous instruments compared to Bitcoin/Ethereum that have at least some proven themselves with at least one use case currency


Sent from my iPhone using Tapatalk

There is so much wrong with this statement. To make a bold claim that there isn't a single ICO with real world value is vastly ignorant to the technology and what ICO's represent and the benefit they provide.

No, they're not equity in any company themselves, but they are equity in a protocol that a company could build itself completely off of. ICOs give developers the opportunity to develop protocols while giving incentive to users to adopt the protocol by giving them a share of the monetization that the protocol provides. Previously it was always a "chicken or the egg" scenario when trying to develop a new technology protocol. A developer might want to create a brand new protocol that would provide a huge benefit, but it might rely on a vast amount of early adopters to get the protocol off the ground.

A great example of this is decentralized cloud storage (ie, Siacoin and Storj). To get a new decentralized cloud storage solution off the ground, it would require a large number of users in the system to ensure there are enough nodes to decentralize the storage of files for new users looking to store their files. But, if there is no incentive to give people to put their hard earned free space up for rent, then it would be very difficult for a solution like that to ever get off the ground. ICOs provide an immediate stake into the solution by creating an incentive in the form of a crypto-currency to those individuals that become a part of the protocol. This allows a system like this to immediately build the framework needed to bring users and adoption to their new protocol. To say that this has no real-world value is insane. These solutions could dramatically shake up the cloud storage market that is in need of one desperately. A decentralized cloud storage solution you can trust is exactly what the market needs.

Cloud storage market won't be shaken up from this. If you are technical you will realize that the extra redundancy requirements and high chance of data loss. Means they will never be competitive with Amazon. I worked for a large cloud hosting company and it's difficult even at massive scale to come to pricing parity with Amazon. Having some random people host it and with many more copies is a joke. It will never be in the same price realm. Each of these ICOs is hyping some future vaporware.


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Sia already offers this service to users for the insane cost of $2 per TB.  I suspect the price will go up as an incentive to attract more hosts but the business model has worked so far on a smaller scale, the developers are actively improving the model and there is a group of successful tech investors that have a stake in Sia's parent company.  Your statement regarding redundancy and high chance of data loss seems contradictory.  Data hosts only get paid at the end of the contract and there are currently 4 copies of every tiny piece of data spread, so if three are offline the fourth will allow a complete set of data to be opened.  The developers have also indicated in their announcement that they will continue research into where the sweet-spot is to ensure there is a 99.999% chance the user's data will be accessible.  If they can continue to do this and still price their services at anything close to the 10x cheaper than the competition then I don't see why anyone would dismiss them.  It's a young company, that recently received a $400k grant from an investor, that is not yet ready to host Netflix's data but give it a couple years to see if they can deliver.  As you may have guessed, I personally believe in the business model.

Their model has the added benefit of being more secure as well because only the "tenant" has the key to the data and the data is broken down, encrypted and stored in small packages on various hard-drives.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on July 19, 2017, 08:09:42 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?

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

Should have the option when you go to sell, if you click through "add payment method"
Something like the following screens:
1)
(http://i.imgur.com/GeVWAjO.png)
2)
(http://i.imgur.com/75iA5W1.png)
3)
(http://i.imgur.com/JX3GdyX.png)

I can imagine not linking to a Canadian bank account, but would be surprised if Paypal was not supported for Canadians

Barring that, you can always send me the Bitcoin and I could send it to you. I'm totally trustworthy. On an unrelated note, everyone, I might have found an even better way of getting bitcoin than mining :)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on July 19, 2017, 09:23:12 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

Should have the option when you go to sell, if you click through "add payment method"
Something like the following screens:
1)
(http://i.imgur.com/GeVWAjO.png)
2)
(http://i.imgur.com/75iA5W1.png)
3)
(http://i.imgur.com/JX3GdyX.png)

I can imagine not linking to a Canadian bank account, but would be surprised if Paypal was not supported for Canadians

Barring that, you can always send me the Bitcoin and I could send it to you. I'm totally trustworthy. On an unrelated note, everyone, I might have found an even better way of getting bitcoin than mining :)

LOL.  Yep, sounds totally safe.  On another note, I did actually buy ~$100 or so of ETH and BTC when prices dipped early Monday morning.  I haven't decided if I'm going to buy a fixed amount per week or just throw random chunks of money at it when prices dip.  I mean, it's already highly speculative, why not make it full on gambling with some market timing too?  No matter what, I do plan to keep this as a very small percentage of my portfolio. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 20, 2017, 06:23:25 AM
Cloud storage market won't be shaken up from this. If you are technical you will realize that the extra redundancy requirements and high chance of data loss. Means they will never be competitive with Amazon. I worked for a large cloud hosting company and it's difficult even at massive scale to come to pricing parity with Amazon. Having some random people host it and with many more copies is a joke. It will never be in the same price realm. Each of these ICOs is hyping some future vaporware.


Sent from my iPhone using Tapatalk

Maybe not immediately, but it will become a major competitor I believe. How is it vaporware? The Storj network infrastructure is usable today. I used it the other day to store files and those files were stored redundantly, encrypted (with a private key that I own), and split into small fragments across 5+ geographically diverse nodes. If you were technical, you'd know why your statement is ridiculous. The only downside is that it isn't as usable at the moment. You need to use some cli scripts to upload and download files and the commands used require specifying unfriendly file and bucket IDs to upload and download files. So technically, the system works as designed, they just need to work on the usability of it so that it can appeal to a broader market.

Because the files are fragmented across many nodes, download speeds are high because the bandwidth is split across those nodes similar to how Bittorrent achieves its high download speeds.

Decentralized cloud storage will be way cheaper than what any other cloud storage provider. The cost of Storj is about $0.015/GB per month. Amazon is $0.023/GB per month and Microsoft is $0.030/GB per month. It is way easier to achieve scale when it is distributed and decentralized as opposed to one single entity trying to match those costs at scale.

Just look at Bitcoin itself. It is capable of achieving processing speeds that are more than 500 times more powerful than the top 500 supercomputers on earth combined. No single entity could ever achieve that. The reason is because the costs are distributed across the network and share among the network's users. The same thing happens with any decentralized solution. Whether it is Bittorrent, cloud storage, computing, etc.

Why do you think that even some larger providers choose to host larger downloads via Bittorrent as opposed to trying to serve those downloads themselves? Because it is simply cheaper to do it in a distributed/decentralized method as opposed to paying the higher costs of hosting it centrally.


EDIT: Just noticed OneCoolCat responded similarly. Kudos.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on July 20, 2017, 06:48:16 AM
Cloud storage market won't be shaken up from this. If you are technical you will realize that the extra redundancy requirements and high chance of data loss. Means they will never be competitive with Amazon. I worked for a large cloud hosting company and it's difficult even at massive scale to come to pricing parity with Amazon. Having some random people host it and with many more copies is a joke. It will never be in the same price realm. Each of these ICOs is hyping some future vaporware.


Sent from my iPhone using Tapatalk

Maybe not immediately, but it will become a major competitor I believe. How is it vaporware? The Storj network infrastructure is usable today. I used it the other day to store files and those files were stored redundantly, encrypted (with a private key that I own), and split into small fragments across 5+ geographically diverse nodes. If you were technical, you'd know why your statement is ridiculous. The only downside is that it isn't as usable at the moment. You need to use some cli scripts to upload and download files and the commands used require specifying unfriendly file and bucket IDs to upload and download files. So technically, the system works as designed, they just need to work on the usability of it so that it can appeal to a broader market.

Because the files are fragmented across many nodes, download speeds are high because the bandwidth is split across those nodes similar to how Bittorrent achieves its high download speeds.

Decentralized cloud storage will be way cheaper than what any other cloud storage provider. The cost of Storj is about $0.015/GB per month. Amazon is $0.023/GB per month and Microsoft is $0.030/GB per month. It is way easier to achieve scale when it is distributed and decentralized as opposed to one single entity trying to match those costs at scale.

Just look at Bitcoin itself. It is capable of achieving processing speeds that are more than 500 times more powerful than the top 500 supercomputers on earth combined. No single entity could ever achieve that. The reason is because the costs are distributed across the network and share among the network's users. The same thing happens with any decentralized solution. Whether it is Bittorrent, cloud storage, computing, etc.

Why do you think that even some larger providers choose to host larger downloads via Bittorrent as opposed to trying to serve those downloads themselves? Because it is simply cheaper to do it in a distributed/decentralized method as opposed to paying the higher costs of hosting it centrally.


EDIT: Just noticed OneCoolCat responded similarly. Kudos.

Centralized system will have better pricing, the core costs are hard drives and electricity. Both are cheaper at scale. P2p file sharing has been around for 20 years. This is great for piracy, not if you want to have consistent reliable storage. There is a whole thread on hacker news where people go into more detail here, this is actually a technical forum https://news.ycombinator.com/item?id=14806440

If you want to look at pure underlying economics, one of our competitors has a great post detailing how much it costs to run a storage costs.

* From https://www.backblaze.com/blog/hard-drive-cost-per-gigabyte/ 1TB of storage cost around $25. * I'll assume 3 year life-span for a drive. * Add 50% costs for the infrastructure and electricity to support the storage. * Add another 17.6% due to redundancy (17 data shards + 3 parity) - https://www.backblaze.com/blog/vault-cloud-storage-architecture/

Gives a minimum cost (before employee costs, marketing etc) of $1.22/TB/month.
If we do the same with Siacoin (which I believe stores 3 copies of your data) we get $3.12/TB/month.


I know the company I'm at has a few million clients and even at our scale competitions with Amazon on price is nearly impossible on the storage side. It's not where the margins are

I think people are just hyped about ethereum so just trying to find any valid usecase to use blockchain.


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jrbrokerr on July 20, 2017, 02:32:24 PM
Tulip mania is an interesting analogy because it's a story of a failed alternative currency.  Tulip bulbs experienced explosive growth in a short time and attracted many speculators. 

Items that attract speculators and have their value driven irrationally upwards are at high risk of major crashes.  The explosive growth in value could be the trigger that invalidates the currency.  The value must stabilize for the currency to be useful.

ir doesn´t matter, tulip was still a MARKET, so for purposes of the discussion it is a valid one, since it shows how MARKETS not ALWAYS RECOVER... , I don´t know that much about crypto but it is very comparable to the tulipe mania because I can tell you, people are just buying in hopes to sell higher and make a profit, not investing because of the VALUE these  "currencies" give.... like many say, nobody knows when it is a bubble until it pops and everyone is left behind, I bet you in those times nobody knew tulip was becoming a gigantic bubble
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jrbrokerr on July 20, 2017, 02:44:14 PM
sorry, REPLIED to the wrong POST, this was the one I was trying to REPLY to:


Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #168 on: July 18, 2017, 06:35:53 PM »
Quote
why does tulip mania always come up in these discussions?  of course there are such things as bubbles in all kinds of markets.  looking at the charts in the wikipedia link or in the link below, tulip mania (even if the popular retelling is overblown) lasted only a couple years at most. 

cryptocurrencies have enjoyed an 8 year run.  so far so good outlasting the tulip bubble :)

https://stratechery.com/2017/tulips-myths-and-cryptocurrencies/

another note: bubbles in cryptocurrencies have popped, dramatically, and several times even, and yet they are still hanging around.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on July 20, 2017, 02:49:04 PM
A couple good points have been raised earlier, directly and indirectly: what portion of your portfolio would you allocate to cryptocurrencies, and how would you know when to sell?

I don't know how to answer either one in my case, which leads me to believe I don't have a good reason for holding any. I guess if you had a specific allocation, then you could sell as you rebalance out. I don't have a target price, but might institute monthly profit taking, or find some small portion of my portfolio I'm comfortable with it at.

We do allow 5% of our portfolio for other (non stocks or bonds), but that also includes high yield bonds and lending, and variety of private investments, so any crypto currency allocation would have to also be carved further out of that. Which is fine with me.. I don't want to hold that much at this point.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on July 20, 2017, 04:46:38 PM
The interesting question is why did it go up 8.7% in one day? 

i have a large / diversified crypto portfolio, so some fared better than others. the volatility in general is ridiculous...
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: gp_ on July 20, 2017, 05:00:54 PM
I agree cryptocurrency is different, and I wouldn't even say it's necessarily in a bubble.  But it's a good ridiculous counter to ridiculous statements like these:

Those who kept buying always do better?  What about when it goes to 0? No market has ever gone to 0?  Tell that to the currency market for the Zimbabwe dollar.

What about when they sell (yes low) and put it into a market or asset that performs better going forward? The opportunity cost going forward is all that matters, and you can't say that someone who held always did better than someone who sold (and invested in something else).

Cryptocurrency has a lot going for it, possibly. We don't need hyperbole and inaccurate statements to muddy the waters.

how is it a ridiculous statement? you're comparing 1 country's currency (a country who is one of the most corrupt), to an entire market which in theory eliminates most of the problems with what traditional "currency" is/can be - comparing the 2 is beyond foolish.

you're taking everything i've said and "ran" with it, instead of just reading it at face value. of course you can always buy into something else, but again, i was using the comparison to a market not an single asset. please feel free to roll the dice and time the market if you'd like.

"muddying" the water is stating that cryptocurrencies "possibly" have a lot going for it... you're obviously a bystander.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: kenaces on July 20, 2017, 05:03:17 PM
The interesting question is why did it go up 8.7% in one day? 

i have a large / diversified crypto portfolio, so some fared better than others. the volatility in general is ridiculous...

up 26.5% today!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on July 20, 2017, 05:30:40 PM
The interesting question is why did it go up 8.7% in one day? 

i have a large / diversified crypto portfolio, so some fared better than others. the volatility in general is ridiculous...

up 26.5% today!

it's up because miners are finally (seemingly) organizing to implement a years' overdue protocol upgrade.  also the price could be rising more than usual because lots of folks removed their coins from exchanges in anticipation of a possible fork.

depending on what the miners/forks do in the next few days and weeks the volatility could get even crazier.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Hvillian on July 20, 2017, 07:43:25 PM
After some background reading and a couple podcasts, I think I (generally) understand the blockchain technology and some of the possible uses.

My question is what are the coins for, particularly with the applications of the technology that don't seem like they want to be an alt-currency.  For example, two of the coins mentioned up thread, Sia and Storj.  I checked both websites, generally understand what they are trying to do with the distributed storage and content access, but don't understand why anyone would want to own the coins.   

Anyone have an explanation for amateur?
Thanks.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 21, 2017, 07:41:37 AM
Centralized system will have better pricing, the core costs are hard drives and electricity. Both are cheaper at scale. P2p file sharing has been around for 20 years. This is great for piracy, not if you want to have consistent reliable storage. There is a whole thread on hacker news where people go into more detail here, this is actually a technical forum https://news.ycombinator.com/item?id=14806440

If you want to look at pure underlying economics, one of our competitors has a great post detailing how much it costs to run a storage costs.

* From https://www.backblaze.com/blog/hard-drive-cost-per-gigabyte/ 1TB of storage cost around $25. * I'll assume 3 year life-span for a drive. * Add 50% costs for the infrastructure and electricity to support the storage. * Add another 17.6% due to redundancy (17 data shards + 3 parity) - https://www.backblaze.com/blog/vault-cloud-storage-architecture/

Gives a minimum cost (before employee costs, marketing etc) of $1.22/TB/month.
If we do the same with Siacoin (which I believe stores 3 copies of your data) we get $3.12/TB/month.


I know the company I'm at has a few million clients and even at our scale competitions with Amazon on price is nearly impossible on the storage side. It's not where the margins are

I think people are just hyped about ethereum so just trying to find any valid usecase to use blockchain.


Sent from my iPhone using Tapatalk

Comparing the costs of a decentralized cloud storage system to a centralized cloud storage system (Amazon, iCloud, etc) on a per TB basis completely ignores the underlying premise of a decentralized system. A decentralized cloud storage system doesn't depend on the per TB costs to operate. Which is exactly the reason why it can offer prices way lower than what Amazon can compete with.

That's exactly the same mistake that the user "hudon" makes in the thread you linked to. He/she tries to estimate the economic costs at scale for hosting data. The mistakes are numerous, but the biggest reason why this thought is not correct is because it doesn't realize the fact that unused storage (just like unused bandwidth) doesn't earn any money. So if a user tried to scale an operation to the point where economies of scale came into play, no amount of economies of scale can compete with someone who wants to give something away of the same quality that they don't use. Let me further clarify this...

Amazon, in order to achieve economies of scale, must scale their own network in order to sell it extremely cheap in a way that meets demand. If Amazon purchases way too much network than the demand can meet, then their costs will be way too high and they won't be able to meet the demand price point required to be competitive. So Amazon must scale their network extremely carefully so that they can offer supply that meets demand precisely. Why? Because as I said, unused bandwidth and storage don't earn you anything.

This is exactly why distributed systems are effective at beating centralized systems at scale. Why? Because there is a crap ton of unused storage/bandwidth out there that has already been purchased that goes unused every single day. That's why when downloading a file over bittorrent that has a lot of seeders, you can achieve a way faster download speed than I can ever achieve downloading something from Amazon or Microsoft. This is because you're taking advantage of bandwidth offered from 50 different people who's bandwidth is just sitting idle anyway. You can't compete (from an economic stand point) against someone who is willing to give away something that they aren't using. So while economies of scale makes sense from a centralized solution perspective, those same economies of scale don't apply to decentralized solutions. Further elaborating on this..."John" purchases a 1TB hard drive for a personal reason, but then he only ends of using 50% of it. The other 50% of it goes unused until he realizes that he could earn a little bit of extra money with it. It isn't enough extra money to allow him to turn it into a business model, but it is better than letting unused space go to waste. So why not? This is the very reason why a decentralized solution will out-price any centralized solution. Because it takes economies out of the picture. A little bit here and there from millions of users turns into a massive solution that prices way lower than anything Amazon could provide at any scale.

That's why applying the "per TB costs" to Sia as you didn't is not the correct approach. The network doesn't depend on per TB costs to operate. It just depends on people realizing that unused disk space doesn't earn them anything at all and costs them nothing to "rent out". Therefore, earning something on something that costs them nothing additional makes perfect economic sense.

Look at Bittorrent, you can download a file way faster than any centralized provider and there isn't even an economic incentive provided by Bittorrent simply because people have bandwidth that their paying for anyway (for internet access) doing nothing throughout the day. The same is true (probably even more so) for storage.

This is true for Bittorrent. It is true from a compute perspective with crypto-currencies (it is why a 51% attack would be extremely difficult to perform by a single entity). It is also true for storage.

My question is what are the coins for, particularly with the applications of the technology that don't seem like they want to be an alt-currency.  For example, two of the coins mentioned up thread, Sia and Storj.  I checked both websites, generally understand what they are trying to do with the distributed storage and content access, but don't understand why anyone would want to own the coins.   

Anyone have an explanation for amateur?
Thanks.

Crypto-currencies don't necessarily need to be used as a medium of exchange to hold value. For example, Sia and Storj, as mentioned are essentially a coin that represents a holding of value in the particular system they represent. Just like anything that has a represented value to it, as long as there are buyers and sellers agreeing on the value, then they can be traded or exchanged for something else of equal value. So while you can't go out and buy bread with Siacoin, there are exchanges (like Poloniex) where you can then go and exchange Siacoin for another currency that can be used as a medium of exchange (Bitcoin). Or, in these two cases, the coin as part of the storage is used to purchase storage space in their respective solutions. So buyers of Siacoin can use Siacoin to purchase storage and store their files in the network. It's all about buyers and sellers really. After all, isn't that what all markets are about?

Check out the Poloniex and OpenLedger exchanges. A whole world of Crypto-currency trading will open up to you. Fees are almost neglible.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on July 21, 2017, 07:52:10 AM
Good explanation on the distributed storage 

In a similar vein, think about why airbnb or Uber can be cheaper than hotels or taxis.

People can make money off their idle assets. If it's stilling unused, it's making nothing. So you can undercut prices and still make more than nothing.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on July 21, 2017, 08:58:03 AM
How do people feel about SegWit and this august 1 possible change/fork whatever you want to call it? This seems like a huge risk to any stability from BTC.  BTC's widespread actual use (compared to other alt-coins) is its big advantage and this seems like it could mess up that real work use.

I've sold enough BTC to be net ahead on everything I bought about a year and a half ago so I can hold the last couple coins with Coinbase for the long haul and feel like I still did ok. In the libertarian spirit of alt currencies, the most recent BTC sale proceeds will be put into physical silver and stored in a secure, non disclosed location.  I hope I am on the correct side of the fork!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 21, 2017, 09:29:38 AM
How do people feel about SegWit and this august 1 possible change/fork whatever you want to call it? This seems like a huge risk to any stability from BTC.  BTC's widespread actual use (compared to other alt-coins) is its big advantage and this seems like it could mess up that real work use.

I've sold enough BTC to be net ahead on everything I bought about a year and a half ago so I can hold the last couple coins with Coinbase for the long haul and feel like I still did ok. In the libertarian spirit of alt currencies, the most recent BTC sale proceeds will be put into physical silver and stored in a secure, non disclosed location.  I hope I am on the correct side of the fork!

Don't hold them in coinbase. Transfer them back to a wallet where you control the private key personally before August 1st. Then in the (unlikely) event of a fork, you'll be on both sides of it instead of hoping to only be on the right side. ;-)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on July 21, 2017, 10:26:28 AM
Coinbase will not permit the purchase or sale of Bitcoin on July 31.  I'm not sure if the other exchanges will also shut down. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 24, 2017, 07:11:43 PM
Decided it was about time to update the numbers on the ZEC mining experiment again.

(https://i.imgpile.com/n5Cdm1.png) (https://imgpile.com/i/n5Cdm1)

Mining continues to make a profit even after factoring in the cost of electricity, but remains much less profitable than June. A rebound in the price of bitcoin (and to a lesser extent in the price of zcash) moved my capital gains/losses back into positive territory. Some folks had speculated that if prices stayed as low as they were in mid-July a lot of higher end nvidia cards might start showing up on ebay and hashrates for some currencies might have started to fall, but with the recent rebound (thanks in part to segwit) this seems less likely.

Apparently two major darknet marketplaces (more recent versions of silkroad) were shutdown in July one of which was turned into a honeypot by european law enforcement for some weeks beforehand, but that seems to have had much less impact on the prices of either currency than the segwit issue. I'm not sure whether to take that as a sign that legitimate commerce is driving a lot more of the demand for bitcoin than the drug trade, or that currency speculation is driving a lot more of the demand for bitcoin than actual financial transactions of any sort.

Link to the original description of the ZEC mining experiment.  (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1600715/#msg1600715)

Link to details of how I updated to include electrical costs (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1610593/#msg1610593) (thanks CanuckExpat)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on July 25, 2017, 10:14:34 AM

[/quote]

Don't hold them in coinbase. Transfer them back to a wallet where you control the private key personally before August 1st. Then in the (unlikely) event of a fork, you'll be on both sides of it instead of hoping to only be on the right side. ;-)
[/quote]

Ok, getting out of coinbase gives control and it appears the overall risk of a fork is greatly diminished.  Warning! ramble of an old guy trying to understand BTC :)

This really ties into the Tulip discussion that always goes on with BTC/Eth/lite coin/wankercoin/trollcoin ect. BTC can actually be used to conduct business right now. I compare it to PayPal. My dad doesn't accept PayPal is real money because "its not a real bank". OK fine.   I've got a paypal balance I just used to order some tools online instead of my credit card so it sure feels like real money to me. Can I use the term fungible?  With BTC I would take a haircut on fees/conversion rates but there are out there in the world retail chains taking BTC and legit places like overstocked.com taking BTC, so I don't know if I could have bought the tools but I can buy the light fixture the wife wants. This helps establish some value as a practical medium of exchange even if its not a currency or store of value. 

I don't know what BTC is intrinsically really worth right now, but I do know it trades at a value and I can both sell my BTC for that value or trade my BTC for goods I need (well, maybe want :) )  at that value.

Even if one is on the majority side of a Fork, the fork splits users and it would seem the two halves will always be worth less than the sum.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 25, 2017, 01:58:55 PM
Quote from: trollwithamustache
Even if one is on the majority side of a Fork, the fork splits users and it would seem the two halves will always be worth less than the sum.

A hard fork doesn't split users, it splits miners. It may seem like a small difference, but it is technically an important detail to differentiate between. Users would end up holding the same amount of coin on both chains. Whereas the miners would be split between supporting one blockchain's rules or the other. How much value each coin has on each chain depends upon the market and how much value its users place on each chain's coin.

Also, it isn't true that the two halves would be less than their sum prior to the split. For example, after Ethereum's split, both halves were totaled to more than it was prior to the split. So users who held their keys on both chain's ended up with more money following the split simply because the market's continued to value the coins on both chains.

It has already been shown that there is plenty of room in this world for numerous crypto-currencies. So it is very likely that any split of one of these currencies could still yield enough support behind it from both miners and users to continue to exist within the marketplace. Though, generally it is in the best interest of miners to reach a consensus among the mining community. Since they're all likely trying to run a business and stay economically solvent, it behooves them to operate on a blockchain that has widespread usage and value.

NOTE: When I say "users", I mean in reference to the holder of the private key on the bitcoin blockchain. So in the case where a user keeps their bitcoin in an exchange (Coinbase), the exchange would actually own the private key on both blockchains and it would be up to the exchange whether they would want to support both blockchains or not. Whether they chose to support both chains is still irrelevant to whether or not the private/public key pair exists on the chain though. The blockchains are identical at the time of the split. Hence why it is critical in the event of a potential blockchain split that you own your private keys yourself. That way you own the coins on both chains and thus own the total value of the sum of the coins on both chains.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 29, 2017, 02:06:45 PM
Random figure looking at the correlation of daily price changes across bitcoins and a bunch of the altcoins.

(https://i.imgpile.com/nRTJyN.png) (https://imgpile.com/i/nRTJyN)

Some things make sense. The prices of ethereum and ethereum classic tend to move together and are also closely correlated with Dash. All three allow much faster payments than most cryptocurrencies.

Zcash and Monero (both currencies focusing on better anonymity than bitcoin) also tend to move together, but not with bytecoin (also focused on anonymity, but with some weird pre-mining stuff going on that really destroyed the currency's credibility early on).

Litecoin (the original altcoin) is tightly linked with bitcoin (the original cryptocurrency), although peercoin is in there too. Don't have a good story for that.

I don't know that this provides anything actionable and even the proposed explanations above are only "just so" stories. I've just been curious about where there are obvious "market sectors" within cryptocurrencies like there are within the stock market.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 29, 2017, 06:09:44 PM
Good analysis maizeman. It definitely makes sense that there would be price correlations between currencies in the same niche.

With SegWit inevitably coming to Bitcoin, I've been reading a lot on the Lightning Network and what it can provide. It seems like there are a ton of benefits and would really help Bitcoin scale indefinitely and do so with zero to low fees. But there are some draw backs such as possible centralization if it were to go mainstream, capital being tied up in the network, and transaction monetary size limitations. But it is a completely opt-in network and wouldn't require a change in Bitcoin itself in anyway (once SegWit activates that is). So I do think it will be good for Bitcoin in the long run since it would help it go mainstream. Much of the mainstream probably doesn't care about decentralization much and so centralized "credit unions" could help the lightning network scale and provide the capital necessary to keep many payment channels open to facilitate payments across the globe.

I thought this was a good video explaining how it works by Jackson Palmer (creator of Dogecoin).
https://www.youtube.com/watch?v=v2Gz6d-xaVU (https://www.youtube.com/watch?v=v2Gz6d-xaVU)

The original whitepaper is here:

https://lightning.network/lightning-network-paper.pdf (https://lightning.network/lightning-network-paper.pdf)

I could really see a tech like this competing against the likes of VISA or Mastercard.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on July 29, 2017, 07:46:17 PM
Wondering if someone can clear something up for me.  Bitcoin is supposed to be inherently deflationary, correct?  Presumably good as a store of wealth if that all works out, however isn't having a predominately deflationary currency (in the case of the depression, a gold-backed us dollar) a good part of what caused the Great Depression to be so severe?  Aren't we setting up what could be the largest global depression in history if Bitcoin goes mainstream and everybody hoards it because it always goes up?  Spending and real investing stop, economy tanks, causing a deflationary feedback loop making everything worse.  Thoughts? 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mxt0133 on July 29, 2017, 08:35:38 PM
Wondering if someone can clear something up for me.  Bitcoin is supposed to be inherently deflationary, correct?  Presumably good as a store of wealth if that all works out, however isn't having a predominately deflationary currency (in the case of the depression, a gold-backed us dollar) a good part of what caused the Great Depression to be so severe?  Aren't we setting up what could be the largest global depression in history if Bitcoin goes mainstream and everybody hoards it because it always goes up?  Spending and real investing stop, economy tanks, causing a deflationary feedback loop making everything worse.  Thoughts?

I completely agree.  How can it function as a medium of exchange if people are just going to horde it. I know that gold was an effective store of wealth and medium of exchange because at the time it was able to keep in step with productivity and creation of value.

Since bitcoin at its present state will eventually run out of new issued coins it cannot represent the creation of new value through productivity.  I for one would not be incentivized to compete for a fixed asset by working and making those who just hold more wealthy.  It just doesn't feel right.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on July 30, 2017, 12:30:00 PM
agreed, i think the deflationary aspect of bitcoin will limit its adoption as a medium of exchange in the long term.  i'm not too worried about a deflationary spiral or anything because unlike with gold or national currencies, a "peasants revolt" in cryptocurrencies is as easy as just creating a new currency.

i think since cryptocurrencies compete with each other, the best currency for the most people will win in the long term.  it may not be bitcoin or any other deflationary cryptocurrency.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 30, 2017, 05:06:12 PM
Regarding deflation, I actually think that property of bitcoin will help its adoption as a medium of exchange. If a merchant has a choice to make a transaction in dollars or bitcoin, it ultimately comes down to the choice of whether the merchant prefers the properties of the dollar versus bitcoin. If the merchant understands that after making an exchange in bitcoin the result of that transaction will hold its value for a longer period of time, then it makes sense for the merchant to want to accept bitcoin as a payment option. If more merchants see the value in bitcoin as a payment option, then it will end up being adopted quicker in the marketplace.

On the consumer side, deflationary spirals are bad in a traditional economy because they are unexpected. But, deflation with bitcoin is expected and static. It is a property of the currency and cannot be manipulated. Therefore the concept of a traditional deflationary spiral doesn't apply to bitcoin. If someone wants a TV today, then they'll purchase it when they can afford it knowning that the next bitcoin they earn will have the same deflationary property as the one they just spent. Traditional deflationary spirals can't provide that assurance when the government controls the currency because there is no telling when the currency supply contraints will fluctuate. Therefore, currency hoarding takes place under those circumstances.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on July 30, 2017, 07:21:38 PM
it ultimately comes down to the choice of whether the merchant prefers the properties of the dollar versus bitcoin

that and also whether the customer would prefer to spend some bitcoin vs some fiat currency.  if they had both, i'd expect the customer to choose to spend the fiat first.  well, perhaps unless the merchant can give a substantial discount for bitcoin purchases.

--

another thing to mention WRT deflation is transaction fees.  if for example the typical household has some bitcoin miners (the "household water heater" example) then there would be some redistribution of bitcoin happening there through transaction fees and mining payouts.

also, if deflation gets out of hand then presumably the volume of transactions would shrink, which would make transactions cheaper, which would increase the velocity of money to offset some of the hoarding.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on July 30, 2017, 07:22:11 PM
Regarding deflation, I actually think that property of bitcoin will help its adoption as a medium of exchange. If a merchant has a choice to make a transaction in dollars or bitcoin, it ultimately comes down to the choice of whether the merchant prefers the properties of the dollar versus bitcoin. If the merchant understands that after making an exchange in bitcoin the result of that transaction will hold its value for a longer period of time, then it makes sense for the merchant to want to accept bitcoin as a payment option. If more merchants see the value in bitcoin as a payment option, then it will end up being adopted quicker in the marketplace.

On the consumer side, deflationary spirals are bad in a traditional economy because they are unexpected. But, deflation with bitcoin is expected and static. It is a property of the currency and cannot be manipulated. Therefore the concept of a traditional deflationary spiral doesn't apply to bitcoin. If someone wants a TV today, then they'll purchase it when they can afford it knowning that the next bitcoin they earn will have the same deflationary property as the one they just spent. Traditional deflationary spirals can't provide that assurance when the government controls the currency because there is no telling when the currency supply contraints will fluctuate. Therefore, currency hoarding takes place under those circumstances.

I still don't get why that couldn't happen with Bitcoin.  If it goes up consistantly and there is a limited supply, why wouldn't people hoard it?  Its not even mainstream yet and people are already hoarding it and paying exponentially higher amounts for it practically every day. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on July 30, 2017, 10:40:56 PM
Because it's really not money, it's more like electronic gold. It's designed to be hoarded, not spent.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on July 30, 2017, 11:09:59 PM
Because it's really not money, it's more like electronic gold. It's designed to be hoarded, not spent.

-W


See, the thing is that's totally cool with me, i don't really care if people hoard an electronic asset designed to preserve wealth, i'd probably participate.  I'm also totally cool with a crypto currency designed to make digital commerce easier/cheaper/better, i'd definitely participate.  The problem comes when the asset being hoarded ALSO becomes the global mainstream currency on which commerce depends on, then it seems to me we'd be up shit creek soon after.   
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 31, 2017, 05:43:07 AM
Because it's really not money, it's more like electronic gold. It's designed to be hoarded, not spent.

-W


See, the thing is that's totally cool with me, i don't really care if people hoard an electronic asset designed to preserve wealth, i'd probably participate.  I'm also totally cool with a crypto currency designed to make digital commerce easier/cheaper/better, i'd definitely participate.  The problem comes when the asset being hoarded ALSO becomes the global mainstream currency on which commerce depends on, then it seems to me we'd be up shit creek soon after.   

I think that the two functions can largely co-exist at least the way things are right now.

Generally folks selling things in bitcoin don't have fixed bitcoin prices. They have fixed prices in euros or dollars or RMB or what have you. If you pay in bitcoins you send them however much of a bitcoin corresponds to the price in the local currency at that particular moment. Similarly, lots of folks paying for things in bitcoins aren't keeping a lot of bitcoin around, but go out and buy some (either personally or the program they're using to send money does it for them) depending on how much they need to spend on a particular transaction.

As long as that stays the case, the deflation of bitcoin doesn't really present any economic challenges. The deflation issue would only be a problem if contacts started specifying future payment amounts in bitcoins:

If a hypothetical person took out a mortgage where the monthly payment was 3 bitcoins a month back when bitcoin was $900/coin, that person would be in trouble right now (actually so would the bank if they made a lot o these mortgages and no one could pay them anymore).

If a cryptocurrency startup had hired a super programmer at 20 bitcoins/month hack when the price was $900/coin the startup would be in trouble right now.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on July 31, 2017, 06:55:53 AM
I still don't get why that couldn't happen with Bitcoin.  If it goes up consistantly and there is a limited supply, why wouldn't people hoard it?  Its not even mainstream yet and people are already hoarding it and paying exponentially higher amounts for it practically every day. 

As long as that stays the case, the deflation of bitcoin doesn't really present any economic challenges. The deflation issue would only be a problem if contacts started specifying future payment amounts in bitcoins:

If a hypothetical person took out a mortgage where the monthly payment was 3 bitcoins a month back when bitcoin was $900/coin, that person would be in trouble right now (actually so would the bank if they made a lot o these mortgages and no one could pay them anymore).

If a cryptocurrency startup had hired a super programmer at 20 bitcoins/month hack when the price was $900/coin the startup would be in trouble right now.

First, it should be noted that the rapid price increases we are seeing today with bitcoin are not related at all to deflation. Bitcoin at the moment is a very inflated currency. The increase in price has more to do with an extreme increase in demand because it is so new.

The discussion about deflation isn't relevant to bitcoin until demand has stabilized, new bitcoins are no longer created (or at at least created at a much slower pace than today), and bitcoin becomes the primary currency of society. These three 3 won't happen for a very long time. When they do happen, the value of bitcoin will rise at a slow and gradual rate, not like the rate that we're seeing today. This means that there will still be an incentive to invest that currency into businesses who would be able to turn that investment into profits better than if that currency were to just sit around idle in a wallet. At the time of this slow transition, the economy will likely contract as it adjusts, but over time it will lead to a slower growing economy that is more resilient to recessions.

If those three things do occur, then it will likely be a very slow process to get there. We're so used to the inflationary nature of our currency, that many things are just tailored to an inflationary economy. For example, as Maizeman mentioned, things like wages are designed around today's inflationary nature of our currency. Every year people receive wage increases (hopefully) to help their earnings keep pace with inflation. With a deflationary currency, we'd no longer need these wage increases annually. Naturally, lower and middle class earnings would rise with the economy instead of stagnating today relying upon our governments to increase earnings for the poor. This will provide higher buying power for people who currently lack it today.

As far as lending goes, interest rates are part of the lending process because the government manipulates those rates along with the currency supply. With a static deflationary currency, we'd no longer need interest rates when lending. Instead, if you take a loan to purchase something and that something costs 5 bitcoin, then you simply pay say 5 bitcoin back over the course of 5 years. Because the currency is deflationary in nature, the lender will make their money through the lending process simply because of the fact that the currency is deflationary, unlike today where lenders make money through interest rates. Or, in the case of borrower risk, the lender can simply measure the interest rate based on that risk without the need to adjust that rate based on the government prime rate. The borrower won't have any problem paying it back because the payments are steady as well as their wages. Nothing would really change there. The only thing that would change is no longer requiring manipulated interest rates by the government to artificially inflate the economy.

Also, because the government can no longer artificially inflate the economy through the money supply, recessions wouldn't be as common as they are today and our economy would become more resilient. This will result in less of a wealth gap because recessions lead to increasing wealth gaps in society. Combine that with a lower and middle class who's wages increase naturally and you have a much healthier financial economy and society.

These things won't happen for a long time. We're a long way off from ever being paid by our employers in bitcoin. In the mean time, prices for goods sold in bitcoin will be continued to be measured in fiat currency and thus the government will continue to control the price of goods, the monetary supply, wages, etc and bitcoin won't have much of an impact on any of that.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on July 31, 2017, 07:44:13 AM
Because it's really not money, it's more like electronic gold. It's designed to be hoarded, not spent.

-W


See, the thing is that's totally cool with me, i don't really care if people hoard an electronic asset designed to preserve wealth, i'd probably participate.  I'm also totally cool with a crypto currency designed to make digital commerce easier/cheaper/better, i'd definitely participate.  The problem comes when the asset being hoarded ALSO becomes the global mainstream currency on which commerce depends on, then it seems to me we'd be up shit creek soon after.   

I think that the two functions can largely co-exist at least the way things are right now.

Generally folks selling things in bitcoin don't have fixed bitcoin prices. They have fixed prices in euros or dollars or RMB or what have you. If you pay in bitcoins you send them however much of a bitcoin corresponds to the price in the local currency at that particular moment. Similarly, lots of folks paying for things in bitcoins aren't keeping a lot of bitcoin around, but go out and buy some (either personally or the program they're using to send money does it for them) depending on how much they need to spend on a particular transaction.

As long as that stays the case, the deflation of bitcoin doesn't really present any economic challenges. The deflation issue would only be a problem if contacts started specifying future payment amounts in bitcoins:

If a hypothetical person took out a mortgage where the monthly payment was 3 bitcoins a month back when bitcoin was $900/coin, that person would be in trouble right now (actually so would the bank if they made a lot o these mortgages and no one could pay them anymore).

If a cryptocurrency startup had hired a super programmer at 20 bitcoins/month hack when the price was $900/coin the startup would be in trouble right now.


I still don't get why that couldn't happen with Bitcoin.  If it goes up consistantly and there is a limited supply, why wouldn't people hoard it?  Its not even mainstream yet and people are already hoarding it and paying exponentially higher amounts for it practically every day. 

As long as that stays the case, the deflation of bitcoin doesn't really present any economic challenges. The deflation issue would only be a problem if contacts started specifying future payment amounts in bitcoins:

If a hypothetical person took out a mortgage where the monthly payment was 3 bitcoins a month back when bitcoin was $900/coin, that person would be in trouble right now (actually so would the bank if they made a lot o these mortgages and no one could pay them anymore).

If a cryptocurrency startup had hired a super programmer at 20 bitcoins/month hack when the price was $900/coin the startup would be in trouble right now.

First, it should be noted that the rapid price increases we are seeing today with bitcoin are not related at all to deflation. Bitcoin at the moment is a very inflated currency. The increase in price has more to do with an extreme increase in demand because it is so new.

The discussion about deflation isn't relevant to bitcoin until demand has stabilized, new bitcoins are no longer created (or at at least created at a much slower pace than today), and bitcoin becomes the primary currency of society. These three 3 won't happen for a very long time. When they do happen, the value of bitcoin will rise at a slow and gradual rate, not like the rate that we're seeing today. This means that there will still be an incentive to invest that currency into businesses who would be able to turn that investment into profits better than if that currency were to just sit around idle in a wallet. At the time of this slow transition, the economy will likely contract as it adjusts, but over time it will lead to a slower growing economy that is more resilient to recessions.

If those three things do occur, then it will likely be a very slow process to get there. We're so used to the inflationary nature of our currency, that many things are just tailored to an inflationary economy. For example, as Maizeman mentioned, things like wages are designed around today's inflationary nature of our currency. Every year people receive wage increases (hopefully) to help their earnings keep pace with inflation. With a deflationary currency, we'd no longer need these wage increases annually. Naturally, lower and middle class earnings would rise with the economy instead of stagnating today relying upon our governments to increase earnings for the poor. This will provide higher buying power for people who currently lack it today.

As far as lending goes, interest rates are part of the lending process because the government manipulates those rates along with the currency supply. With a static deflationary currency, we'd no longer need interest rates when lending. Instead, if you take a loan to purchase something and that something costs 5 bitcoin, then you simply pay say 5 bitcoin back over the course of 5 years. Because the currency is deflationary in nature, the lender will make their money through the lending process simply because of the fact that the currency is deflationary, unlike today where lenders make money through interest rates. Or, in the case of borrower risk, the lender can simply measure the interest rate based on that risk without the need to adjust that rate based on the government prime rate. The borrower won't have any problem paying it back because the payments are steady as well as their wages. Nothing would really change there. The only thing that would change is no longer requiring manipulated interest rates by the government to artificially inflate the economy.

Also, because the government can no longer artificially inflate the economy through the money supply, recessions wouldn't be as common as they are today and our economy would become more resilient. This will result in less of a wealth gap because recessions lead to increasing wealth gaps in society. Combine that with a lower and middle class who's wages increase naturally and you have a much healthier financial economy and society.

These things won't happen for a long time. We're a long way off from ever being paid by our employers in bitcoin. In the mean time, prices for goods sold in bitcoin will be continued to be measured in fiat currency and thus the government will continue to control the price of goods, the monetary supply, wages, etc and bitcoin won't have much of an impact on any of that.

Thanks both for the responses.  I do get that theres no issues with deflation as long as Bitcoin is being used as a medium of exchange between traditional currencies.  I also get that if Bitcoin ever became a primary currency for trade without other government issued currencies involved it would either be, or have to become, much more stable and slower growing than it is now.  That said, gold is about as stable as an asset can get historically, but when the US currency was backed by gold, a deflationary asset, we ran into some serious problems when the markets tanked and people preferred a deflationary currency over spending and investment.  I realize that wasn't the only reason the Great Depression was so severe, but when you compare it to the Great Recession, it's the one thing really seems to stand out
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 31, 2017, 07:55:11 AM
JAYSLOL, the only extra thing I'd add to your most recent response is that bitcoin wouldn't have to mediating transactions between people who are pricing things in traditional currencies. A good example of how to divorce fixed prices from the effects of a currency that fluctuates widely in value is the ether:gas model for pricing computer services on the ethereum network. No government issued currencies involved, but it still produces the same protection from default/inflation issues as the current bitcoin:USD model.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 31, 2017, 07:48:39 PM
Any wallet where you have access to your own private keys would mean you'd be able to spend on both blockchains if there really is a fork.

I looked more into the ethereum fork and it turns out that even some places like coinbase where your coins aren't stored in a wallet where you control the private key and didn't support "ethereum classic" still allowed people who had ethereum deposited with them to withdraw the forked currency for several months after the split (although there is no guarantee that they'd do that again).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on July 31, 2017, 08:34:47 PM
Any wallet where you have access to your own private keys would mean you'd be able to spend on both blockchains if there really is a fork.

I looked more into the ethereum fork and it turns out that even some places like coinbase where your coins aren't stored in a wallet where you control the private key and didn't support "ethereum classic" still allowed people who had ethereum deposited with them to withdraw the forked currency for several months after the split (although there is no guarantee that they'd do that again).

for that example, wouldn't coinbase have to broadcast the transaction on both chains then?  did they do that in an unofficial way?
 either way, yeah it seems a good idea to make sure everything's kept at a privately-controlled wallet for the time being.

i think there will definitely be a fork (and there probably always should be for big protocol upgrades for "backup"), but who knows how much support it'll get.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on July 31, 2017, 08:51:19 PM
Here's the Coinbase FAQ about ETC: https://support.coinbase.com/customer/en/portal/articles/2524725-ethereum-classic-faq

Basically the currency split in late July last year and they started calculating separate ETH and ETC balances, and provided the chance to withdraw but not deposit the ETC until Dec of the same year. Key answer:

Quote
What should I expect if another digital currency supported by Coinbase experiences a future hard fork?

The industry is evolving rapidly and we expect that best practices will develop over time on how to handle hard forks. Right now we are handling each one on a case by case basis.

The latest estimate I've read is something like 95% support for the upgraded protocol which would leave maybe 5% support for bitcoin cash and would mean solving the first block will take close to three hours. It'll certainly be fun to watch from the sidelines tomorrow morning though!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Hvillian on July 31, 2017, 10:26:18 PM
In a somewhat suprising move, Coinbase explicitly said they would not support Bitcoin cash.  Naturally this announcement was followed by mass withdrawal and the all-too-predictable delays.

Quote from: Coinbase
"Customers who wish to access both bitcoin (BTC) and bitcoin cash (BCC) need to withdraw bitcoin stored on Coinbase before 11.59 pm PT July 31, 2017. If you do not wish to access bitcoin cash (BCC) then no action is required."
https://cointelegraph.com/news/coinbase-advises-users-to-transfer-btc-

Happy Fork Day, nevertheless.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: PDXTabs on August 03, 2017, 10:09:41 AM
I went ahead and built a mining rig. Parts as follows:

 $$$ - Description
 118 - ASRock H81 PRO BTC R2.0
  53 - Intel Celeron G1840 Processor
  33 - 4GB RAM
 176 - EVGA SuperNOVA 1000 G2 power supply
  40 - 6 x PCIe riser cable
1380 - 6 x SAPPHIRE NITRO Radeon RX 470 4GB "video cards"
  40 - Home made case/frame
  20 - 15A surge suppressor
------------
$1860

I had a spare SSD laying around. I'm not counting the $19 that I spent on the Kill A Watt Electricity Usage Monitor that is in the photo or the tools and parts that I needed to run Ethernet to the garage.

I'm running Ubuntu 16.04 and Calymore's dual miner 9.7. I'm getting ~122Mh/s at Ethereum while simultaneously getting ~3675Mh/s at Sia. I'm drawing ~1320W which seems on the ragged edge of the power supply that I chose. Dual mining Sia increased power consumption by about 30% and decreases Ethereum production by ~3%. I pay $0.08/kWh.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on August 03, 2017, 06:21:42 PM
In a somewhat suprising move, Coinbase explicitly said they would not support Bitcoin cash.

in another twist, Coinbase decided to support Bitcoin Cash (withdrawals only?) starting in... January.  i can't think of a good reason to wait that long other than just to be sure they don't affect markets too much with their actions:

https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbdf
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 04, 2017, 06:42:54 PM
I went ahead and built a mining rig. Parts as follows:
 ...snipped...
I had a spare SSD laying around. I'm not counting the $19 that I spent on the Kill A Watt Electricity Usage Monitor that is in the photo or the tools and parts that I needed to run Ethernet to the garage.

I'm running Ubuntu 16.04 and Calymore's dual miner 9.7. I'm getting ~122Mh/s at Ethereum while simultaneously getting ~3675Mh/s at Sia. I'm drawing ~1320W which seems on the ragged edge of the power supply that I chose. Dual mining Sia increased power consumption by about 30% and decreases Ethereum production by ~3%. I pay $0.08/kWh.

I'm curious because I don't have any experience mining alt-coins with GPUs, but I do mine Bitcoin. What is your profitibility in mining alt-coins with GPUs? Your upfront costs seem pretty hefty for such minimal mining power (MH/s). How does that hashrate translate with alt-coin profitibility taking into account your upfront cost of $1800?

I have a 7.5TH/s miner that draws 1150W. At Bitcoin's current difficulty and price, it brings in about $7 or .0025 BTC each day. My electricity costs are about $100 a month ($.12/KWh) and revenue is at about $210 a month.

The miner cost me about $1100 total (miner, PSU, shipping). I figure I will run this unit for 2 years even if it is barely keeping pace with the electricity costs since I have a feeling Bitcoin will go up in price (possibly even doubling) in that time.

I'm just curious as to how that stacks up against alt-coin mining. I know GPUs are out of stock like crazy, so it is clearly profitable. I'm just wondering how well that scales and how well does an investment like yours pay off?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: PDXTabs on August 05, 2017, 07:33:25 AM
I'm curious because I don't have any experience mining alt-coins with GPUs, but I do mine Bitcoin. What is your profitibility in mining alt-coins with GPUs? Your upfront costs seem pretty hefty for such minimal mining power (MH/s). How does that hashrate translate with alt-coin profitibility taking into account your upfront cost of $1800?

As of right now (current difficulty and price) I am mining $6.89 worth of Ethereum and $1.86 worth of Sia per day while spending $2.53 on electricity ($0.08/kWh). So, that's $6.22 per day after electricity. Obviously as prices and difficult change that can change a lot. So, I guess that's $189 after electric costs per month.

I'm not sure that this is a great investment, but I max out my 401k every month with equities. To me this is a fun side project that *might* earn me some money. Obviously, I don't just want to burn $1800, but I know just how risky this is.

EDIT - I hope to use the parts for 3 years.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on August 05, 2017, 09:18:30 AM
It looks like coinbase is ooching towards supporting bitcoin cash. Anyone have any thoughts on what to do with the new cash-coins? Is bitcoin cash actually getting used out there in the real world?

my current thinking is as soon as I can, I will dump the bitcoin cash coins and be happy with whatever I get for them as its essentially free money.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on August 05, 2017, 07:00:30 PM
i'm going to sit on my coins on both chains for the time being.  the miners could do anything and it's up to them, really.  if bitcoin cash goes to 0 there's no real loss there.

once the cash chain difficulty drops or if the segwit2x outlook looks shaky, miners may be incentivized to switch to the cash chain.  all it takes is one larger miner to make the change to severely slow down the old chain.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 05, 2017, 07:02:12 PM
Another semi-regular semi-scheduled update from my ZEC mining experiment.

(https://i.imgpile.com/nREglX.png) (https://imgpile.com/i/nREglX)

Mining income continues to flatten out, although I'm still significantly ahead of the cost of electricity. I may still get bailed out by capital appreciation I'm getting by letting my ZEC mining earnings accumulate in bitcoins and zcash instead of converting them back to dollars as I go.* I'm treating all the bitcoins that were in wallets I controlled on August 1st as now existing as both BTC and BCC (and counting the sum of ZEC BTC and BCC to calculate capital gains) and any new earnings since then as only BTC.

Like PDXT I knew the risks going in and see this as a fun side project and it continues to be fascinating.

*This is really cheating when it comes to deciding whether my decision to build a mining rig payed off, because it's an entirely different activity from mining, and I could have just put the dollars I spent on my mining hardware directly into BTC and ZEC and had the same effect if not more.

Link to the original description of the ZEC mining experiment.  (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1600715/#msg1600715)

Link to details of how I updated to include electrical costs (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1610593/#msg1610593) (thanks CanuckExpat)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 05, 2017, 07:23:16 PM
A year from now [Bitcoin Cash] could be worth $0 or $5000 per coin.  It has all the same characteristics of bitcoin with bigger blocks, and more exchanges are starting to support it.  ... From where I stand though I don't see how one can be a believer in bitcoin and not think the same price increases can happen for bitcoin cash.

However, you can make that exact same statements for bitcoin, bitcoin cash, and at least a dozen other altcoins.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: neonlight on August 06, 2017, 10:44:25 AM

It looks like coinbase is ooching towards supporting bitcoin cash. Anyone have any thoughts on what to do with the new cash-coins? Is bitcoin cash actually getting used out there in the real world?

my current thinking is as soon as I can, I will dump the bitcoin cash coins and be happy with whatever I get for them as its essentially free money.

From what I see bitcoin cash is like getting in on the ground floor of bitcoin.  Why not hold or add to your bitcoin cash position?  A year from now it could be worth $0 or $5000 per coin.  It has all the same characteristics of bitcoin with bigger blocks, and more exchanges are starting to support it. 

I'm watching from the sidelines, not willing to speculate with my own cash in any crypto.  From where I stand though I don't see how one can be a believer in bitcoin and not think the same price increases can happen for bitcoin cash.

There is hardly any logic or past info which we can reference. Maybe one ETH and ETC. ETH which is the new-but-official coin went sky-high while the old-and-unofficial grew steadily(slow by crypto standard).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 06, 2017, 11:40:41 PM
I'm curious because I don't have any experience mining alt-coins with GPUs, but I do mine Bitcoin. What is your profitibility in mining alt-coins with GPUs? Your upfront costs seem pretty hefty for such minimal mining power (MH/s). How does that hashrate translate with alt-coin profitibility taking into account your upfront cost of $1800?

As of right now (current difficulty and price) I am mining $6.89 worth of Ethereum and $1.86 worth of Sia per day while spending $2.53 on electricity ($0.08/kWh). So, that's $6.22 per day after electricity. Obviously as prices and difficult change that can change a lot. So, I guess that's $189 after electric costs per month.

I'm not sure that this is a great investment, but I max out my 401k every month with equities. To me this is a fun side project that *might* earn me some money. Obviously, I don't just want to burn $1800, but I know just how risky this is.

EDIT - I hope to use the parts for 3 years.

I stopped mining Eth + SC and have been mining Signatum (SIGT).  I've mined $25 worth of SIGT, 6x 1060's, since yesterday afternoon and I was in a bad pool for about half the time.  The price has skyrocketed but so has the difficulty.  If the price holds, it could be a very profitable coin. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 06, 2017, 11:55:38 PM
How many watts is your rig running on?  AMD or Nvidia? 

This new rig, x8 1060 6gb is running just under 800 watts which is pretty amazing really. All cards have memory overclocked and power turned down to 60% using MSI afterburner.

Kaby Celeron,
Asus Prime Z270 (this mb is amazing)
4gb whatever was cheapest
60gb ssd (Windows 10)
Mix of 1060 6gb (stupid limits, have to mix and match brands and sizes).
EVGA G2 1000W PS

The best thing about building rigs, I am getting pretty good with aluminum which is a really useful skill to have I am finding out. It is so strong, light, looks cool, and is very cheap if you buy the right size.

Nice, watts seems a little high to me.  My 6x 1060's use 480 watts on 60% power.  Perhaps because mine are 3gb, idk.  Yours are better and you can dual mine SC more efficiently than me.  i was dual mining Eth + SC with 141 Eth and 180 SC hash.  The SC took a big hit on the 3gb gpus. 

You should definitely be mining Sigt right now.  You will double profits.  If you dont want to hodle, send the coins to your Cryptopia wallet and sell them throughout the day for Eth/SC.  You will end up with twice as much per day.  Use Pav's ccminer for good results.  If you are a risk-taker, or savy about virus', download sp's modified ccminer from a reliable source (some leaked copies have trojans).  Thats the best Sigt miner but you either have to pay or be careful about who you download it from.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 07, 2017, 12:00:01 AM
Just want to add Sigt uses a new Skunk algo.  1060's get 18-19 mh/s on it.  I don't quite get that, I get closer to 16.5mh/s.  Whattomine shows you will make about $32 per day with your rig but I found its not very accurate with this algo.  You can expect just a little over half what it reports.  The problem is the pools don't actually report what the ccminer does.  For instance, my 101 mh/s on my ccminer is stable but Suprnova fluctuates between 40-145mh/s.  Its still the best option at the moment so get it on it while you can.

https://whattomine.com/coins/191-sigt-skunkhash?utf8=%E2%9C%93&hr=144.0&p=800.0&fee=0.0&cost=0.12&hcost=0.0&commit=Calculate
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: krypt0miner on August 07, 2017, 10:58:00 PM
For those who are wondering how digital currencies will be used as a form of money:
- Bitcoin is designed to be a store of value (fixed, decreasing inflation rate and limited total supply)
- Litecoin is designed to be a medium of exchange (also with a fixed, decreasing inflation rate but with a much larger total supply and faster transaction confirmation time)
- Ethereum is designed to be a token that is used to power decentralized applications that run on top of the Ethereum blockchain

Zcash, Monero, and Dash (and a handful of other, similar coins) are designed as mediums of exchange but offer a privacy-oriented transaction mechanism that makes it nearly impossible to identify a user by their transaction history (which is what Bitcoin, Litecoin, and Ethereum currently allow). I see government regulation as a huge hurdle for these privacy-oriented coins, so I plan on watching from the sidelines for the time being, and learning more about them as the digital currency market grows legs.

Now that the digital currency market has ballooned to $100 billion+ in total capitalization, there seems to be a coin for everything and everybody. Some of these have very interesting use cases that may or may not disrupt entire industries (Ripple, Sia, etc..). But since we are investors here on the Mr. Money Mustache forum, we need to be able to separate the signal from the noise. That is why, in my opinion, it really only makes sense to buy Bitcoin, since you are looking to put your money into an asset that will consistently gain value over time. Ethereum is also worth considering as the demand for its applications outpaces the supply of Ether tokens. However, as other users have mentioned, it does not have a clear monetary policy.

I put together this little document for those who are interested in getting started with digital currencies but aren't sure where to start. Comments are enabled!

https://docs.google.com/document/d/11FSUczla4BOxpLfirYoc7PhFgAlUOQMvjwSL0lmJ2IM/edit?usp=sharing

Full disclosure: I mine Ethereum in the Ethermine pool (12x 1060 GTX 6GB @ ~238 MH/s) and buy Bitcoin during price drops (I transfer $500 or so per month to GDAX where it sits until I decide to buy in).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: neonlight on August 08, 2017, 02:43:46 AM
For those who are wondering how digital currencies will be used as a form of money:
- Bitcoin is designed to be a store of value (fixed, decreasing inflation rate and limited total supply)
- Litecoin is designed to be a medium of exchange (also with a fixed, decreasing inflation rate but with a much larger total supply and faster transaction confirmation time)
- Ethereum is designed to be a token that is used to power decentralized applications that run on top of the Ethereum blockchain

Zcash, Monero, and Dash (and a handful of other, similar coins) are designed as mediums of exchange but offer a privacy-oriented transaction mechanism that makes it nearly impossible to identify a user by their transaction history (which is what Bitcoin, Litecoin, and Ethereum currently allow). I see government regulation as a huge hurdle for these privacy-oriented coins, so I plan on watching from the sidelines for the time being, and learning more about them as the digital currency market grows legs.

Now that the digital currency market has ballooned to $100 billion+ in total capitalization, there seems to be a coin for everything and everybody. Some of these have very interesting use cases that may or may not disrupt entire industries (Ripple, Sia, etc..). But since we are investors here on the Mr. Money Mustache forum, we need to be able to separate the signal from the noise. That is why, in my opinion, it really only makes sense to buy Bitcoin, since you are looking to put your money into an asset that will consistently gain value over time. Ethereum is also worth considering as the demand for its applications outpaces the supply of Ether tokens. However, as other users have mentioned, it does not have a clear monetary policy.

I put together this little document for those who are interested in getting started with digital currencies but aren't sure where to start. Comments are enabled!

https://docs.google.com/document/d/11FSUczla4BOxpLfirYoc7PhFgAlUOQMvjwSL0lmJ2IM/edit?usp=sharing

Full disclosure: I mine Ethereum in the Ethermine pool (12x 1060 GTX 6GB @ ~238 MH/s) and buy Bitcoin during price drops (I transfer $500 or so per month to GDAX where it sits until I decide to buy in).

As a hobbyist with tech background I cannot agree with you more. There are a lot of noises and it's hard to figure out which is which as a hobbyist. The best bet is to stick with the main coins first: BTC, LTC, ETH and start dabbling: buy, read, sell, read, read, read and repeat.

Once you get comfortable with the three you can move down the table, Try NOT to buy new coins that are freshly launched, the days of spotting ETH is largely gone. There are simply too much noises out there, every coin claim they are revolutionary, heck even I feel like launching a new coin! So stay out of fresh coins, but if you miss out on the next breakout don't blame me ;)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: neonlight on August 08, 2017, 11:23:51 PM
For new people, coinbase has an Auto invest feature you can setup weekly/monthly in the 3 major coins. It is by far the easiest way to get started. Just sign up for their website, link a checking account, and turn on auto invest for the coin(s) you want. No need to learn all this complex mining if you don't want to. Until there is an official ETF, this is a good start.

Didn't know that, good info
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on August 14, 2017, 07:09:53 AM
So this thread seems oddly quiet lately, especially with a crazy run up of Bitcoin and other crypto values.  So, anyone's guess how high this is going to go?  Who's made shitloads of money?  I haven't made much as I only have a very small portfolio of a few coins. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 14, 2017, 07:49:27 AM
Yup! Things have been very good lately. I've made several times more in bitcoin the last two months than I have in my real job.

I predicted that Bitcoin would hit $3500 in August and continue going up from there, so this has well blown past my predictions.

I think a number of factors are at play. I believe how well Bitcoin handled the hard fork has given a lot of investors a lot more confidence in bitcoin knowing that any contention to the main chain isn't likely to be very successful. Also, Japanese adoption continues to be going bonkers. Combine that with all the worldwide uncertainty of war with North Korea and the traditional markets declining and bitcoin seems to be emerging as a very nice safe haven.

The future of bitcoin looks even brighter.

I do predict a somewhat downturn come November as investors get nervous again when the second phase of SegWit2X comes into play. This time miners of the main chain will actually need to upgrade software in unison as opposed to simply doing nothing avoid a chain split. But after a successful upgrade the price surge will continue up again.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: neonlight on August 15, 2017, 01:56:53 AM
Yup! Things have been very good lately. I've made several times more in bitcoin the last two months than I have in my real job.

I predicted that Bitcoin would hit $3500 in August and continue going up from there, so this has well blown past my predictions.

I think a number of factors are at play. I believe how well Bitcoin handled the hard fork has given a lot of investors a lot more confidence in bitcoin knowing that any contention to the main chain isn't likely to be very successful. Also, Japanese adoption continues to be going bonkers. Combine that with all the worldwide uncertainty of war with North Korea and the traditional markets declining and bitcoin seems to be emerging as a very nice safe haven.

The future of bitcoin looks even brighter.

I do predict a somewhat downturn come November as investors get nervous again when the second phase of SegWit2X comes into play. This time miners of the main chain will actually need to upgrade software in unison as opposed to simply doing nothing avoid a chain split. But after a successful upgrade the price surge will continue up again.

Please do not predict, our ability to predict dwarfs the whims and fancies of the whaler. If a whaler wakes up with epiphany and starts selling, then it's the big dump. Early holders have way too much holdings to make any technical analysis stands.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 15, 2017, 06:46:43 AM
Please do not predict, our ability to predict dwarfs the whims and fancies of the whaler. If a whaler wakes up with epiphany and starts selling, then it's the big dump. Early holders have way too much holdings to make any technical analysis stands.

Whales create noise, but not trends.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on August 15, 2017, 08:24:24 AM
maizeman I was thinking about your mining experiment, what would it look like if you added a line to account for mining income minus opportunity cost of the hardware? Not sure what the fair equivalent would be, if you sunk the equivalent cost of the hardware into the same coin you mine at the beginning and let it appreciate perhaps
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 15, 2017, 09:55:27 AM
maizeman I was thinking about your mining experiment, what would it look like if you added a line to account for mining income minus opportunity cost of the hardware? Not sure what the fair equivalent would be, if you sunk the equivalent cost of the hardware into the same coin you mine at the beginning and let it appreciate perhaps

I've thought about that myself with my own mining as well. With the huge gains that Bitcoin has seen over the last several months, it is hard for mining to keep up with compared to if you had simply investing the up front costs in Bitcoin itself instead of the equipment (I think that's what your getting at).

However, it is hard to (or at least unfair to) calculate in the short term because in the long term mining will win out so long as you are able to mine back all the Bitcoin you spent on the equipment and then some. As long as you can mine back all the Bitcoin spent on your equipment plus a little more, then you'll be able to realize the gains you originally missed out on plus all future gains of the asset if you continue to hold.

In other words, if I spent 1 bitcoin to mine one bitcoin, then there really isn't any opportunity cost involved regardless of what happened to the price of Bitcoin during the time it took to mine that 1 bitcoin. Therefore, if I spend 1 Bitcoin to mine 1.5 bitcoin, then I profit 0.5 Bitcoin regardless of what its worth is at any point in time.

The only difference between the two investment options would be if the Bitcoin (or whatever crypto-currency) price plummeted while mining work is still being performed. At that point you've already made the capital investment in the equipment and your only option would be to continue to mine in hopes that the price returns or to bail and recoup some of the equipment costs by selling the hardware. Whereas if you had simply just invested the initial money in Bitcoin you could sell immediately and mitigate some of your losses right away.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on August 15, 2017, 03:55:04 PM

[/quote]


In other words, if I spent 1 bitcoin to mine one bitcoin, then there really isn't any opportunity cost involved regardless of what happened to the price of Bitcoin during the time it took to mine that 1 bitcoin. Therefore, if I spend 1 Bitcoin to mine 1.5 bitcoin, then I profit 0.5 Bitcoin regardless of what its worth is at any point in time.

[/quote]

Does opportunity cost really work this way for mining?  One can buy one BTC for x dollars or etc or bannanas or babbage coins today.  At least for BTC, difficulty keeps going up and the reward steadily goes down with each Halving. So going forward one doesn't really know what one can get from mining.  As a year or two go by its likely your miner may no longer be cutting edge/competitive. Maybe one can say that one must be willing to switch to a more profitable crypto currency?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 15, 2017, 04:01:26 PM
If you build your own rig it would take you approximately 9 months to pay off your equipment and cover electricity cost.  However, if you would have built a rig about 6 months ago you would have paid it off in 3 months tops.  People with $2,000 rigs were mining $800 a month a couple months ago.  Its now about $300 (electricity is probably $40-$50 per month extra depending upon your rate).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 15, 2017, 04:18:38 PM
@OneCoolCat, those numbers have gotta be ZEC or ETH mining right? The price/difficulty of bitcoin mining doesn't change that rapidly anymore does it?

@CanuckExpat, it's a good question. I'm out of town all week but would be interesting to run the numbers once I am back on my home computer. Could compare to putting the same amount of money I spent on mining equipment right into the cyptocurrency (right now I know I'd come out way behind just because bitcoin has been on a big run up in price), or into stock/bond index funds.

One important question to resolve, would you say it makes more sense to only consider the potential increase/decrease in value of the investment, or the total value of the investment? The money I spent building my miner is gone (maybe I could get a couple of hundred bucks for the parts if I wanted to mess around on ebay), which my charts show me starting off more than $1,000 in the hole. For an investment in the currencies themselves (or a stock index fund) I'd still be able to get my original investment out at any time (less any capital losses).

@lifeanon

Your analysis assumes that the mining is being uses as a method of buying bitcoins (or other currencies) which lumps together two very different financial questions: whether it makes financial sense to mine BTC/ETH/ZEC/etc and whether it makes sense to hold BTC/ETH/ZEC for appreciation. I'm currently doing some of both, but it could very easily be that once we're looking at this with the benefit of hindsight, one (either one) will have made financial sense and the other did not. So I'm trying to separate out the two effects as I go along.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 15, 2017, 06:06:09 PM
Does opportunity cost really work this way for mining?  One can buy one BTC for x dollars or etc or bannanas or babbage coins today.  At least for BTC, difficulty keeps going up and the reward steadily goes down with each Halving. So going forward one doesn't really know what one can get from mining.  As a year or two go by its likely your miner may no longer be cutting edge/competitive. Maybe one can say that one must be willing to switch to a more profitable crypto currency?

I'm not really sure I get what you're saying. The miner I have today will absolutely become obsolete some day. That doesn't mean that it won't mine me more bitcoin than I spent on it. Unless there is some drastic change in the difficulty and massive unexpected jump in the network hash rate, then I expect to make more bitcoin with my miner than I spent on it. I paid for the miner with bitcoin, so disregarding the price of bitcoin at any point in time, then I will fully expect by the time my miner becomes obsolete that I will end up with more bitcoin than I spent. Determining success or failure in the end would ultimately depend solely on the value of the bitcoin that I mined at some point in the future.

The big question about profitibility then becomes chiefly about what happens to the price of bitcoin. The only way to analyze success or failure is with the benefit of hindsight. Since both mining and investing success in bitcoin both depend upon the appreciation of bitcoin, then the main difference between the two is the mining difficulty during the mining period.

Therefore, I'd say that the biggest difference between mining bitcoin versus investing in bitcoin is that mining bitcoin is a little more risky since if the price of bitcoin plummets to the point where mining is longer profitable, then the sunken cost of the mining equipment purchase becomes much more difficult to recoup in a market devoid of willing purchasers of obsolete mining equipment. Also, with an upfront investment purchase of bitcoin, if the price begins to plummet, once can simply sell the bitcoin and limit the downside risk.

That being said, mining bitcoin also has much more upside since in general you can mine more bitcoin than was spent (say 150% of the original investment give or take with today's difficulty and an efficient miner). That means, if holding the bitcoin long and the price appreciates even modestly, the gains will outpace those that would've been realized had one just simply invested the money instead.

At least this is based on my own mining experience. YMMV. The biggest variation in one's outcomes would likely be electricity costs. If electricity costs are expensive, then in an investment scenario one could invest the money that would've been spent on electricity for mining to continue purchasing bitcoin dollar cost averaging along the way. This could greatly diminish the benefit of mining over a pure investment strategy.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: calpolyjohn on August 17, 2017, 02:34:02 PM
For new people, coinbase has an Auto invest feature you can setup weekly/monthly in the 3 major coins. It is by far the easiest way to get started. Just sign up for their website, link a checking account, and turn on auto invest for the coin(s) you want. No need to learn all this complex mining if you don't want to. Until there is an official ETF, this is a good start.

I'm very new to this, so I apologize if this is a dumb question.  I bought 8 ETH using coinbase this week.  My plan is a long term hold just in case it goes crazy like BTC and its a small part of my portfolio I'm willing to risk big losses with.  My question - is it safe to keep in coinbase?

Thanks 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: RetroFIRE on August 17, 2017, 08:08:33 PM
Following!  Great discussion all!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 18, 2017, 06:07:25 AM
I'm very new to this, so I apologize if this is a dumb question.  I bought 8 ETH using coinbase this week.  My plan is a long term hold just in case it goes crazy like BTC and its a small part of my portfolio I'm willing to risk big losses with.  My question - is it safe to keep in coinbase?

Thanks

I'll assuming your personal cyber-security is strong here (strong passwords, two-factor authentication enabled, secure browsing habits, etc), because if you're Coinbase account is ever compromised then someone could empty your wallet and you'd lose your funds with little recourse.

So assuming that isn't a concern (truthfully it should be though), then it mostly comes down to your risk appetite. The risk being how much do you trust Coinbase to continue to operate in the foreseeable future. They are one of the most reputable and largest exchanges around, so they are certainly very trust-worthy and have received tons of funding. There's also the risk that regulations in any given state could cause them to stop serving customers in those states, but usually in those cases they'll allow customers to withdraw funds until a certain deadline...but you never know.

Also, the above was all in regards to whether or not your ethereum is "safe". But "safe" could also mean ensuring your digital currency follows the proper blockchain. There is always the risk of a fork with digital currencies where changes to the code could cause blocks mined under those differences to create separate chains. In this case, because your crypto-currencies is held by an exchange, you technically don't own the private key to those coins. Therefore, you're at the mercy to how the exchange determines what chain the coins you own will follow. If they make the wrong choice or don't give you an option, then that could cause you to lose the value of your investment unnecessarily. Things like this can all be mitigated simply by owning your own private keys in a wallet you own.

The way I see it is Coinbase can be used similar to how you would a checking account. I keep some spending bitcoin in Coinbase each month and have a bitcoin debit card (Shift) linked to my Coinbase account that I use for spending. They make spending bitcoin directly with other merchants very easy. However, just like with a checking account, any large amount of funds that you don't see yourself spending for a long period of time, is it worth the given risks above? Especially considering that there is very little effort needed to completely mitigate that risk. That effort being to simply install some wallet software on your computer to store your bitcoin instead and then secure your wallet seed physically somewhere. So any money beyond what I see myself spending short-term I move to my personal wallet for long term safe-keeping.

I know you said you purchased ethereum, but the same idea applies.


TLDR: Coinbase is not a bank account for storing large sums of money. But for small funds or for spending money, then they're sufficient as long as you take the necessary cyber-security precautions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Aggie1999 on August 18, 2017, 08:21:33 AM
Good advice by the previous poster. I'll re-enforce by saying that one should NEVER leave substantial coins in online wallets. Way to many instances in the past of the online wallet operators taking off with the money.

No clue on Ethereum but one of the safest ways to protect bitcoins is do an offline wallet on a computer never connected to the Internet. Put a strong password on that wallet and then print out the keys without a password and store the print out in a safe deposit box. That away if the off line computer gets stolen/destroyed/etc you can always recover. Also, if you kick the bucket whoever has access to your safe deposit box can recover using the print out without having to know the password.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: effigy98 on August 18, 2017, 06:48:12 PM
Get a hardware wallet like with one of these: https://www.ledgerwallet.com/products/ledger-nano-s or print your wallet private keys on paper but not near any cameras or anything and put in a safe or safety deposit box. Hardware and paper is probably the most secure right now. Do not keep too much money on exchanges, that is what you always hear about when you see news about bitcoin hacks. Nobody hacks the actually blockchain/coins, its the exchanges.

Also there is a new bitcoin documentary on Netflix that is pretty interesting.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Buckthundaz on August 18, 2017, 07:14:36 PM
Any sentiments on BTC v. BCH  re: hash rate?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 18, 2017, 08:03:33 PM
Any sentiments on BTC v. BCH  re: hash rate?

A ton of overblown chatter going on, especially on Reddit, regarding BTC and BCH hashrate. Most of it isn't really even true. All kinds of crazy talk like miners are going to move over to BCH and BTC is going to come to a halt and fail. Meanwhile BTC hashrate is at an all time high. BCH will absolutely become more profitable to mine and its hashrate will increase as well, but not to the detriment of BTC. A lot of this nervous chatter is only happening because the BCH network is speeding up as the price climbs as well (driving mining profitability up), but meanwhile SegWit has yet to activate on the BTC network which will take place next week. Once that activates then the talk about BCH overtaking BTC will die down for sure.

Plus, to add to all the drama, the 2X BTC1 hardfork in November has received a lot of attention for BTC the last couple days. People just need to chill out though. November is still a ways out and a lot is going to be happening with BTC until then. So no need to get ahead of ourselves and talk about the possibility of another hardfork. The truth is that a lot of money is on the line for all the stakeholders in play and when it comes to running a business, they likely won't want to be doing anything that will jeopardize the value of the currency that their business depends on. So while some businesses may be pushing the idea of another hardfork, at this point in time it is still to early to determine what will happen.

In the end, after all this drama shakes out we will still have a solid BTC foundation that is resistant to any type of shake-up coming from a loud minority. This will only serve to drive the value of BTC up even further just like when BTC remained stable through the BCH hardfork.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: B_M on August 19, 2017, 09:55:09 AM
What's folks opinion on cloud mining? It's pricked my interest but seems so straightforward I'm doubting it. Given the high cost of the coins at the moment it obviously seems good but just wondering what other folks think.
Been looking at this:
https://pool.bitcoin.com/index_en.html?
 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Roland of Gilead on August 19, 2017, 10:19:50 AM
It seems that some company like Amazon could kill all of the other crypto-currencies in a relatively short time by coming up with their own version which is actually backed by Amazon store credit.   Amazon is so valuable to me right now that I would take $500 of Amazon credit in lei of $400 hard cash if I were selling someone a used lawnmower or something.  I know that Amazon already has gift cards but these are not as secure as a crypto-currency?  If Amazon developed an exchange like Coinbase and established their own crypto-currency, it would just shoot to first place.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 19, 2017, 11:57:29 AM
It seems unlikely that cloud mining is ever going to be a way to turn an immediate profit because the folks building and maintaining the machine are generally only going to sell it to you if they figure you're paying more than they could make running it for themselves.* But there could always be exceptions, so that's a general analysis, not running the numbers on any particular scenario. It'd be interesting to compare the cost of one of these machines to buying hashrate on one of the 3rd party aggregators (like nicehash) where you can essentially rent out other people's miners on a minute by minute basis. Hopefully you're getting a much better deal by essentially committing to an indefinite contract.

OTOH, cloud mining (or any kind of mining) where you don't sell the coins as you mine them is one way to speculate that the cost of bitcoins will rise in the future. If that's your goal you could also take the amount of money you were going to spend on your remote mining rig and just buy the currency with it.

*And this assumes all parties are operating in good faith. There are always some stories about folks who either found they were getting much lower hashrates than promised (potentially running on shared rather than unique hardware), ran into long delays actually getting a machine deployed after paying for it and speculated that the company had been running the machine for their own use for a few months first, or companies that just completely vanish with all their servers when a big uptick in price makes mining more profitable. YMMV
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 19, 2017, 03:07:15 PM
So embarrassingly my idea build a mining income for income seems to have been a quite poor one, while holding cryptocurrency has really paid off in the last month. Had to reset my y-axis and move the legend to the other side of the graph to make room for all the capital appreciation.

(https://i.imgpile.com/nTgFYR.png) (https://imgpile.com/i/nTgFYR)

Recent flatness of the mining income line reflects my main miner going down for most of the last week while I was out of town. I'm now in the black overall for the experiment in cryptocurrencies, although as will be explained below, that is really in spite of my attempt to be a miner rather than because of it. ;-)

maizeman I was thinking about your mining experiment, what would it look like if you added a line to account for mining income minus opportunity cost of the hardware? Not sure what the fair equivalent would be, if you sunk the equivalent cost of the hardware into the same coin you mine at the beginning and let it appreciate perhaps

So I started out with approx. ~$1,130 in leftover bitcoins and spent ~$1,430 on my mining equipment in early June. Let's leave aside the existing bitcoin holdings (which are really the only thing that pulled my portfolio into the black).

Right now my mining income is worth $1,050 (so -$380 in the hole).*

If I'd spent the money for my mining gear on bitcoins, I'd have $2,950 today ($1,520 in capital gains, plus initial principal).**
If I'd spent the money for my mining gear on zcash, I'd have $1,320 (-$110 in capital capital losses, plus initial principal).
If I'd spent the money for my mining gear on an S&P index fund I'd have $1,430 (essentially my initial principal)

Now mining continues to be profitable for my machine even net of electricity costs and may well remain so for several months (or maybe even into the winter), so it is quite possible that I'll catch up to the "just buy a buy of zcash" or "be a responsible person and sweep your excess hobby money into your stash to buy index funds." It's quite unlikely I'll catch up to "put it all on bitcoins" but if I'm being honest with myself about my state of mind in early June I was much more excited about zcash than bitcoin so the second scenario was a more likely outcome than the first. Easy with the benefit of hindsight, huh?

*If I'd been selling my mining income as it came in I'd have $530 ($900 in the hole).
**Includes the value of bitcoin cash in addition to bitcoin for bitcoins held in private wallets on the day of the fork.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 20, 2017, 04:41:06 PM
What happens if you lose or break your hardware wallet?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on August 20, 2017, 05:19:25 PM
How does one justify the environmental impact of mining?  I've read that processing BTC transactions takes 1000x+ the power of processing a credit card transaction.  It seems like an anti-mustachian way to make money for this reason.

In the context of your (developed world) lifestyle, it's probably not real meaningful. Is it a waste of electricity? Yes. Is it worse than, say, mining gold (another hoardable "asset")? Certainly not!

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Roland of Gilead on August 20, 2017, 07:22:53 PM
If it drives technology and creates some new inventions or faster processors then the energy consumption might be worth it in the long run anyway.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on August 20, 2017, 08:33:57 PM
I've thought about that myself with my own mining as well. With the huge gains that Bitcoin has seen over the last several months, it is hard for mining to keep up with compared to if you had simply investing the up front costs in Bitcoin itself instead of the equipment (I think that's what your getting at).

However, it is hard to (or at least unfair to) calculate in the short term because in the long term mining will win out so long as you are able to mine back all the Bitcoin you spent on the equipment and then some. As long as you can mine back all the Bitcoin spent on your equipment plus a little more, then you'll be able to realize the gains you originally missed out on plus all future gains of the asset if you continue to hold.

@CanuckExpat, it's a good question. I'm out of town all week but would be interesting to run the numbers once I am back on my home computer. Could compare to putting the same amount of money I spent on mining equipment right into the cyptocurrency (right now I know I'd come out way behind just because bitcoin has been on a big run up in price), or into stock/bond index funds.

One important question to resolve, would you say it makes more sense to only consider the potential increase/decrease in value of the investment, or the total value of the investment? The money I spent building my miner is gone (maybe I could get a couple of hundred bucks for the parts if I wanted to mess around on ebay), which my charts show me starting off more than $1,000 in the hole. For an investment in the currencies themselves (or a stock index fund) I'd still be able to get my original investment out at any time (less any capital losses).

@lifeanon

Your analysis assumes that the mining is being uses as a method of buying bitcoins (or other currencies) which lumps together two very different financial questions: whether it makes financial sense to mine BTC/ETH/ZEC/etc and whether it makes sense to hold BTC/ETH/ZEC for appreciation. I'm currently doing some of both, but it could very easily be that once we're looking at this with the benefit of hindsight, one (either one) will have made financial sense and the other did not. So I'm trying to separate out the two effects as I go along.

I think you are both right, and this is a trickier question to answer than I thought. What is the best alternative..
It's easy-ish to answer in hindsight, but that's not a fair comparison. It might turn out to be different for each person depending on your goals.

If your goal is to accumulate as much BTC/ETH/ZEC as possible and hold onto it indefinitely, then lifeanon makes a good point, that you will presumably "break even" at some point as long as you can mine back the cost of your hardware in that currency. It means you should measure and plot your y-axis in that currency, and the time period to break even is really a shift of the x-axis (assuming mining difficulty doesn't get prohibitively harder as you wait, I don't know enough about mining to think about this).

If your ultimate goal is to maximize USD (or other fiat currency) by accumulating and then selling cryptocurrency at any arbitrary point in time, which is what I think maizeman is implicitly getting at since his y-axis is in USD, then a "fair" comparison might be buying the equivalent of your mining hardware in that cryptocurrency and tracking the appreciation in USD to that arbitrary point. If you wait long enough that you would have mined it back anyways, I suppose you still break even just with much less liquidity.

So I'm not sure what is the right answer. Opportunity cost is hard.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Bicycle_B on August 20, 2017, 08:34:17 PM
Maizeman, continued thanks for the clarity of your experiments and reporting.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Mr Mark on August 20, 2017, 10:29:33 PM
Maizeman, et al

If a company has large inhouse computing capacity that is (say) not being used to full capacity 24/7, is there any value to getting the under utilised compute capacity to mine bitcoins while otherwise idle? We also generate our own power, btw.

My company does a lot of computing, but it won't of course be those specialised mining hardware set ups...
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: effigy98 on August 21, 2017, 06:18:19 AM
What happens if you lose or break your hardware wallet?

You get a new one and put in your secret key you wrote down and put in your safe. BAM! New hardware wallet with same addresses.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: effigy98 on August 21, 2017, 06:21:38 AM
If it drives technology and creates some new inventions or faster processors then the energy consumption might be worth it in the long run anyway.

I don't think the ends will justify the means in this case.  I think many don't understand the massive scale of power going into cryptocurrencies right now.  That's why I wrote the above post.

It takes 100s of people to verify a "normal" old world money transactions. If you added up the commutes, individual consumption, compute power they use to move those bits around, etc... You are most likely coming out at least even, but probably much more ahead on crypto currencies then traditional credit cards, bank transfers, western union, etc. The point of gold is a good one as well.

Buy something at the store with your visa. There are a lot of people and computers behind the scenes that process that transaction, record it to ledgers, etc.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 21, 2017, 06:46:47 AM
Currently, bitcoin accounts for a tiny but growing piece of the worldwide currency usage.  Imagine what could happen as transaction volume grows by 10x, or 100x?  (Transaction volume is what consumes the power, not the price of a Bitcoin).  This seems entirely possible, if not likely, given the hash rate has grown by 4x in the past year alone.


No doubt the energy consumption of bitcoin is massive at the moment. The problem however is that the energy consumption of bitcoin is always measured in energy spent per transaction. That type of calculation isn't exactly the most fair to bitcoin. However, it is one of the only common metrics we have between bitcoin and the VISA network, for example. So that is what generally gets used as a comparison.

The reason why it is unfair to measure energy consumption on a per transaction basis with bitcoin is because of the fact that the amount of energy consumed is the same whether there are 4,000 transactions in a block or there are 20,000. It is the work put into hashing the transaction block that consumes energy, not the input to the block that matters. That means that as the network scales, it will inevitably become more energy efficient as time goes on. Contrast that with your typical backend database solution (any non-blockchain system) and you get the opposite effect; the more the network grows the more energy it consumes.

Furthermore, with SegWit being enabled, the possibility for the Lightning Network to play a role in payment transactions will allow the bitcoin network to scale dramatically while being able to do so with the equivalent compute power of a home desktop PC. That will allow way more transactions to be processed with a much lower energy footprint than today. That being said, the bitcoin blockchain would still be confirming payment channel transactions and so the network would still need to scale more from a transaction and energy perspective.

I do feel in the case the ends justifies the means. Bitcoin has the opportunity to create a ton of social good in the world where power over money corrupts. Furthermore, because of bitcoin's inherent need for efficiency when it comes to mining profitability, that means that bitcoin will be a main driver toward lower cost renewable electricity (we're already seeing that). The fact that bitcoin consumes electricity means that its transition toward clean energy is destined to be, unlike say the transportation industry that will require dramatic infrastructure changes. So as we solve our world's energy problems, bitcoin will be right there adopting energy solutions that will allow the network as a whole to become more and more sustainable. Planning for power is something that is done at the earliest stages of bringing a mining operation online which isn't something you see in many industries today where power consumption is an afterthought.

The biggest problem I see with bitcoin (with regards to energy consumption) is the fact that bitcoin's greatest energy demands come at a time when its energy sources will be the dirtiest in bitcoin's lifetime.

TLDR: Bitcoin's inherent need for lower power consumption above all else to achieve mining profitability means that the power problem for bitcoin will ultimately solve itself in the long run. Not using a system that has potential for so much social good is short-sighted given this fact. As the world adopts electronic payment systems, a blockchain based approach is much more energy efficient than traditional systems at scaling over the long term.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on August 21, 2017, 08:51:59 AM
I would agree with all of that with the caveat that Bitcoin isn't (and probably never will be) "money" in the sense that it's widely used for transactions. The inherently deflationary design IMO ensures that it will instead be a gold-like store of value (assuming it's anything at all in the long run, it could of course be abandoned for some other crypto system).

So the proper comparison, environmentally, is probably to physical gold.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 21, 2017, 10:01:53 AM
I would agree with all of that with the caveat that Bitcoin isn't (and probably never will be) "money" in the sense that it's widely used for transactions. The inherently deflationary design IMO ensures that it will instead be a gold-like store of value (assuming it's anything at all in the long run, it could of course be abandoned for some other crypto system).

So the proper comparison, environmentally, is probably to physical gold.

-W

For what its worth, gold was used as a universal currency for centuries. The reason why we moved toward paper money was due to convenience. It's not as easy to carry around a sack of gold coins as it is a wallet with folded money.

Bitcoin combines the value of gold with the convenience of electronic transactions.

Whether or not you believe any deflationary currency is good for the economy is another topic of economics altogether. I believe the world is in desperate need for a non-manipulative deflationary currency. The fact that it is extremely convenient to use will help ensure its mainstream adoption.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 21, 2017, 03:09:03 PM
@bender

As lifeanon has also talked about, while you can certainly calculate an average energy cost per transaction for bitcoin by dividing the number of transactions by the amount of power consumed, the marginal energy cost of each bitcoin transaction is essentially zero.

Energy use scales with the total network hashrate, not with the number of transactions. Consider the case of bitcoin cash. Up to 8x as many transactions per block, and only 1/10th as high a hashrate. So right now the energy cost per transaction of bitcoin cash is 1/80th that of bitcoin itself or ~12.5x the cost of a visa transaction.* Continued increases in transaction scale per block have the potential to reduce average energy use per transaction further, and if something like proof of stake ends up in a widely adopted cryptocurrency, that would reduce power useage even more.

@Mr Mark

For bitcoin proper, it is likely that even with essentially "free" computer hardware, if you're using CPUs the amount of income you get from mining wouldn't be worth the extra wear and tear on your servers. If the company had a GPU heavy server farm and/or was interested in mining various altcoins where mining isn't dominated by custom fabricated ASICs built specifically for mining as has happened to bitcoin, it might prove to be a profitable way to use up idle compute cycles.

@Bicycle_B

Thank you, it makes me happy to hear the ongoing reports from my little experiment are of interest.

*Based on the statement about bitcoin using 1000x as much energy per transaction as visa.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on August 21, 2017, 03:13:26 PM
We will have to agree to disagree on the deflationary part. If I were designing my libertarian fantasy currency, it would probably have some very slight inflation built in, just for the sake of keeping money moving through the system (not to mention preventing deflationary spiral sort of problems).

Regardless, Bitcoin is a LONG way from being used as a currency in any meaningful sense. The recent rise in popularity/price has certainly caused a lot of folks to buy fancy mining rigs and hoard their bitcoins, but that's not the same as walking to the store and getting a bag of apples. I know a few folks (normal folks who aren't interested in buying illegal Chinese drugs or whatever) who have bitcoin holdings and they look at me like I'm crazy if I suggest they could *purchase* something - there is no chance in hell they'll spend them, ever (though if the price drops enough, they'll panic-sell them!)

That's not a great setup for widespread adoption as currency. But I've been wrong before.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 22, 2017, 06:41:42 AM
Regardless, Bitcoin is a LONG way from being used as a currency in any meaningful sense. The recent rise in popularity/price has certainly caused a lot of folks to buy fancy mining rigs and hoard their bitcoins, but that's not the same as walking to the store and getting a bag of apples. I know a few folks (normal folks who aren't interested in buying illegal Chinese drugs or whatever) who have bitcoin holdings and they look at me like I'm crazy if I suggest they could *purchase* something - there is no chance in hell they'll spend them, ever (though if the price drops enough, they'll panic-sell them!)

That's not a great setup for widespread adoption as currency. But I've been wrong before.

-W

What do you mean by "not a great setup"? The hurdle to POS usage is merchant adoption, not the userbase.

A large portion of people putting money into bitcoin are simply doing so with their expendable or investable income. This is money that, if it weren't in bitcoin, would likely be in some other investment where it wouldn't be getting used for POS transactions there either. So the reason for that money not being spent isn't because the money is in bitcoin, but rather simply because the money that is being put into bitcoin is non-spending money to begin with.

That being said, once merchant adoption takes place (its only a matter of time), then given the fact that bitcoin is extremely liquid, the money will be right there available from the user base ready to be spent.

In the meantime, we have ample amount of bridge technologies using existing networks to help people spend their bitcoins if they need to. For example, for myself, I have a bitcoin debit card that allows me to keep my spending money in bitcoin up until the point in time when I spend it at a store. I simply move my paycheck into bitcoin and then use my debit card to spend it where ever I want. This allows me to dollar cost average bitcoin with my after-tax income. Considering bitcoin doubled over the last couple of months, this has allowed me to effectively double my take home pay. When taking this approach, using bitcoin doesn't cause someone to avoid spending, but simply be able to save more than they'd otherwise be able to. All it takes is a merchant to accept bitcoin and I can then simply cut out the middle-man (VISA) and pay directly with bitcoin to the benefit of both the merchant and I.

This leads me to my final point about deflation. The fear of a deflationary spiral with bitcoin is unfounded. Deflationary spirals can occur with traditional centrally manipulated fiat currencies because they are unpredictable. With bitcoin, at the point where deflation actually kicks in (a long time from now), deflation will be consistent and expected. That means that people won't forgo spending in favor of hoarding because of the knowledge that the bitcoin that they'd earn tomorrow will have the same deflationary properties as the bitcoin that they'd be spending today. We see this every day. If someone wants a new iPhone, then history shows that they'll purchase that iPhone when they want it even if it means that they'll save more money by simply delaying their purchase of it. While this isn't deflationary economics at play, it is consumer behavior economics. This consumerism will still be alive in a deflationary economic model. That means that regardless of whether or not the currency being used is inflationary or deflationary, consumers will still choose to purchase the goods they want over delaying that purchase even if it means they'll save more money in the long run.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 22, 2017, 07:38:57 AM
Lifeanon, would you mind pointing me towards the service that provides your bitcoin denominated debt card? I remember hearing some folks talk about those as a possibility years ago, but hadn't realized they were actually out in the wild already. Does the company providing the service take a significant chunk out of either your deposits or spending as fees? Recently found out the city where I live already has a "bitcoin atm" where folks can either deposit cash to purchase bitcoins or convert their bitcoins to dollars and instantaneously withdraw as cash. Fees are ... unfavorable to say the least though.

WRT deflation/inflation, the change in the absolute money supply of bitcoin is going to be very predictable over time. That doesn't necessarily mean that rates of inflation/deflation will also remain fixed, because changes in the velocity of money (how often the average bitcoin/euro/RMB/dollar is spent) can produce significant increases or decreases in the effective money supply. In good times people tend to spend more of the money they make and spend it quickly, so the effective money supply increases, creating inflation. In bad times, people tend to hold on to their money for much longer and build up emergency funds because they're worried about their next paycheck, decreasing the money supply and either reducing inflation or causing deflation.

Now to be fair, I should add that hyperinflation, which generally occurs when a government starts printing new money to service its debt, driving up inflation and hence interest rates which requires more money be printed to service the debt, is basically impossible with a cryptocurrency, but I did want to make the point that deflationary spirals are still quite possible with bitcoin or bitcoin like currencies (and remember the initial deflationary spiral of the great depression occurred with a gold-backed currency where the government really had very little power to increase or decrease the money supply).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on August 22, 2017, 07:46:35 AM
I was not going to bring the great depression into this, but yes, Maizeman makes my point quite well. There are advantages to not having a central authority control the money supply (no hyperinflation) but we need to recognize that there are also HUGE disadvantages WRT the business cycle and the ability of a central authority to mitigate downside risks through currency manipulation.

Now, you might think the gov't does a shitty job of that. I'm not sure I'd disagree. But doing a shitty job of it might still very well be better than nobody doing the job at all.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 22, 2017, 09:48:16 AM
Lifeanon, would you mind pointing me towards the service that provides your bitcoin denominated debit card?

The card I use is the Shift card. They have a partnership with Coinbase that allows you to spend your bitcoin residing in Coinbase using this card. So I just keep my small amount of spending money each month in Coinbase (the rest in a private wallet) so that I can spend my bitcoin just like I would with a checking account. The awesome part is that there are no transaction fees involved. There is a one time $10 fee to purchase the card and then there are $2.50 ATM withdrawal fees (just like about every VISA card out there), but I don't really use it at any ATMs so that is not a big deal. That's it. No annual fee either. The cool thing as well though is that it functions just like any other debit card. So in cases where I'm at the store and pay with the card as "debit", then if the store allows it, I can ask for cash back if I need it. That allows me to instantly turn my bitcoin back into USD cash without paying any conversion/transaction fees at all.

https://www.shiftpayments.com/card/ (https://www.shiftpayments.com/card/)

There are a few other bitcoin debit cards out there, but most of them are prepaid cards that store the value on the card in USD as opposed to bitcoin. So you only receive the value of your bitcoin at the time you load the card. I didn't like that approach and most of those have many additional fees to them as well.

I was not going to bring the great depression into this, but yes, Maizeman makes my point quite well. There are advantages to not having a central authority control the money supply (no hyperinflation) but we need to recognize that there are also HUGE disadvantages WRT the business cycle and the ability of a central authority to mitigate downside risks through currency manipulation.

WRT to inflation/deflation, don't get me wrong, I didn't mean to oversimplify the economy down to just the money supply policy alone. There are other factors for sure that come into play when it comes to what contributes to market ups and downs. But the argument that there are outside forces that contribute to the effective money supply (such as fractional-reserve banking) is hardly an argument against having a decentralized non-manipulated deflationary currency. Any given type of currency isn't going to solve all the woes of a very complex economy.

The thing about bitcoin however isn't that it is necessarily forever static and can't be changed. It is the fact that it is decentralized and gives the power to a majority of its users instead of a powerful minority. In other words, if we got into a situation where the currency itself was what was holding our economy back (again, highly unlikely), then the currency (bitcoin) could only be changed if the benefit of that change received support from the community as a whole. This is where the idea of social good comes from with regards to bitcoin. But as was stated, it is highly unlikely that bitcoin's inherent nature will be the root culprit of any future economic perils and it will be more than likely that other destructive economic forces will be at play. Those other forces could be everything from fractional-reserve banking (that inherently leads to recessions at regular intervals), horrible lending practices, large-scale speculative bubbles, etc.

Finally, for what it is worth (since the depression was thrown out there), economists looked throughout American history and found that, outside of the Great Depression, there is no correlation between depression/recession and deflation (Atkeson, Andrew and Kehoe, Patrick. Federal Reserve Bank of Minneapolis. Deflation and Depression: Is There an Empirical Link? January 2004). Yes, deflation made what took place with the Great Depression worse, but it wasn't and can't be the cause of it. For example, defaulting loans during an economic hardship can have the same effect as a contracting money supply that presents itself in a recession, but that doesn't mean that the resulting deflationary pattern was a root cause that gave way to that recession. The idea that deflation hinders economic growth is completely baseless.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on August 22, 2017, 10:34:15 AM
Yeah, agree to disagree. IMO anything used as "money" (for exchange) needs to grow in supply sufficiently that hoarding it is never a good strategy (encourages investing, which is good, and consumption, which has positives and negatives). If you use your extra money to invest in... itself, that's not especially useful economically.

Bitcoin as constituted is mostly being hoarded, and the design of the system encourages this behavior. I don't see the current population of bitcoin owners (who as far as I can tell are speculators) agreeing to any major change that would increase the supply. Maybe that will change, but I'd bet on another crypto currency that is better designed winning out if we're talking about something used to facilitate exchange. I think bitcoin can survive long term as a substitute for gold - which of course you can also spend. Like gold, though, people generally won't spend it in everyday transactions.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 22, 2017, 11:06:05 AM
Yeah, agree to disagree. IMO anything used as "money" (for exchange) needs to grow in supply sufficiently that hoarding it is never a good strategy (encourages investing, which is good, and consumption, which has positives and negatives). If you use your extra money to invest in... itself, that's not especially useful economically.

Bitcoin as constituted is mostly being hoarded, and the design of the system encourages this behavior.

Bitcoin is only being invested in itself because of the fact that it has the potential to become the groundwork for a new global economy. Therefore, those investing in it now will be paid dividends for being early adopters. If, however, bitcoin does become a fabric of our global economy, then it will reach a point where its volatility and rapid rise in price will be greatly diminished. The idea that bitcoin could be mainstream while at the same time producing the returns we see today is false. At that point, individuals using it as a long term investment seeking gains will be a disappointed when compared with traditional investments in businesses that produce a profit.

Gold is not a good investment, it is a hedge against riskier but more profitable investments. The only reason why people don't spend their gold is because of the fact that it isn't convenient or liquid enough to spend. Therefore we resort to spending our dollars instead, but those dollars lose value over time. This loss of value impacts lower/middle class citizens more than it does the rich since a larger percentage of their income and net worth exists in USD. Having a currency that protects against this will help preserve the wealth of a larger portion of our population. This will have a huge impact on the distribution of wealth and the end result will be a much more stable economy. If however the economy were to go belly up do to poor economic policies or corporate greed (resulting in those riskier investments declining), then having a decentralized currency that citizens could flock to as a safe haven would be just what the world would need to help preserve the wealth of our most at risk populations. On the other side of that catastrophe would be citizens ready and willing to reinvest their preserved wealth into companies resilient enough to turn a profit. In fact, our next economic recession is when we'll see bitcoin's most important role become immediately apparent.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on August 22, 2017, 12:44:25 PM
I disagree with basically all of that, but I don't think there's much point arguing about it further. Regardless, it will be interesting to see what develops over the next few decades.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on August 22, 2017, 01:27:41 PM
Hey all, glad the discussion is going well.

I want to let everyone know that IOTA is something you want to do some research on while the market cap is still under-valued.

Cheers!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 23, 2017, 08:09:29 PM
Lifeanon, would you mind pointing me towards the service that provides your bitcoin denominated debit card?

The card I use is the Shift card. They have a partnership with Coinbase that allows you to spend your bitcoin residing in Coinbase using this card. So I just keep my small amount of spending money each month in Coinbase (the rest in a private wallet) so that I can spend my bitcoin just like I would with a checking account. The awesome part is that there are no transaction fees involved. There is a one time $10 fee to purchase the card and then there are $2.50 ATM withdrawal fees (just like about every VISA card out there), but I don't really use it at any ATMs so that is not a big deal. That's it. No annual fee either. The cool thing as well though is that it functions just like any other debit card. So in cases where I'm at the store and pay with the card as "debit", then if the store allows it, I can ask for cash back if I need it. That allows me to instantly turn my bitcoin back into USD cash without paying any conversion/transaction fees at all.

https://www.shiftpayments.com/card/ (https://www.shiftpayments.com/card/)

There are a few other bitcoin debit cards out there, but most of them are prepaid cards that store the value on the card in USD as opposed to bitcoin. So you only receive the value of your bitcoin at the time you load the card. I didn't like that approach and most of those have many additional fees to them as well.

I was not going to bring the great depression into this, but yes, Maizeman makes my point quite well. There are advantages to not having a central authority control the money supply (no hyperinflation) but we need to recognize that there are also HUGE disadvantages WRT the business cycle and the ability of a central authority to mitigate downside risks through currency manipulation.

WRT to inflation/deflation, don't get me wrong, I didn't mean to oversimplify the economy down to just the money supply policy alone. There are other factors for sure that come into play when it comes to what contributes to market ups and downs. But the argument that there are outside forces that contribute to the effective money supply (such as fractional-reserve banking) is hardly an argument against having a decentralized non-manipulated deflationary currency. Any given type of currency isn't going to solve all the woes of a very complex economy.

The thing about bitcoin however isn't that it is necessarily forever static and can't be changed. It is the fact that it is decentralized and gives the power to a majority of its users instead of a powerful minority. In other words, if we got into a situation where the currency itself was what was holding our economy back (again, highly unlikely), then the currency (bitcoin) could only be changed if the benefit of that change received support from the community as a whole. This is where the idea of social good comes from with regards to bitcoin. But as was stated, it is highly unlikely that bitcoin's inherent nature will be the root culprit of any future economic perils and it will be more than likely that other destructive economic forces will be at play. Those other forces could be everything from fractional-reserve banking (that inherently leads to recessions at regular intervals), horrible lending practices, large-scale speculative bubbles, etc.

Finally, for what it is worth (since the depression was thrown out there), economists looked throughout American history and found that, outside of the Great Depression, there is no correlation between depression/recession and deflation (Atkeson, Andrew and Kehoe, Patrick. Federal Reserve Bank of Minneapolis. Deflation and Depression: Is There an Empirical Link? January 2004). Yes, deflation made what took place with the Great Depression worse, but it wasn't and can't be the cause of it. For example, defaulting loans during an economic hardship can have the same effect as a contracting money supply that presents itself in a recession, but that doesn't mean that the resulting deflationary pattern was a root cause that gave way to that recession. The idea that deflation hinders economic growth is completely baseless.

Why would you spend your BTC?!?!? 

LOL JK.

Personally I hodl though.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 23, 2017, 08:10:43 PM
Hey all, glad the discussion is going well.

I want to let everyone know that IOTA is something you want to do some research on while the market cap is still under-valued.

Cheers!

The problem with IOTA is that noone actually knows how it works.  WTF is tangle?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: bacchi on August 23, 2017, 11:22:34 PM
Hey all, glad the discussion is going well.

I want to let everyone know that IOTA is something you want to do some research on while the market cap is still under-valued.

Cheers!

The problem with IOTA is that noone actually knows how it works.  WTF is tangle?

A graph with a start and an end (but not necessarily followed in sequence).

https://en.wikipedia.org/wiki/Directed_acyclic_graph

My first thought about IOTA is that, holy shit, it would gobble up RAM like nothing else.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on August 24, 2017, 01:09:16 PM
Hey all, glad the discussion is going well.

I want to let everyone know that IOTA is something you want to do some research on while the market cap is still under-valued.

Cheers!

The problem with IOTA is that noone actually knows how it works.  WTF is tangle?

A graph with a start and an end (but not necessarily followed in sequence).

https://en.wikipedia.org/wiki/Directed_acyclic_graph

My first thought about IOTA is that, holy shit, it would gobble up RAM like nothing else.

It is already optimized to be able to be ran on a regular smart phone, long term they want it to require as minimal processing for the "work" as possible.

Long term, I expect to see commercial Drones flying around us and landing on wireless charging stations (sharing economy) and payment will be done in IOTA :]
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 24, 2017, 03:57:24 PM
So on here IOTA has a volume to market cap ratio of <1%, while a lot of other currencies in the top 10 seem to be more in the 2-4% range. Does anyone know of structural reasons for this to be the case or is it just a random piece of statistical noise?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on August 25, 2017, 05:57:04 AM
So on here IOTA has a volume to market cap ratio of <1%, while a lot of other currencies in the top 10 seem to be more in the 2-4% range. Does anyone know of structural reasons for this to be the case or is it just a random piece of statistical noise?

Ya, that's one of my biggest concerns with IOTA. It isn't very liquid at the moment and almost all trading for it (> 90%) takes place on just one exchange. I would never feel comfortable putting more than just a few bucks in it. That being said, a few bucks in it might totally be worth it.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on August 25, 2017, 11:15:48 AM
So on here IOTA has a volume to market cap ratio of <1%, while a lot of other currencies in the top 10 seem to be more in the 2-4% range. Does anyone know of structural reasons for this to be the case or is it just a random piece of statistical noise?

Ya, that's one of my biggest concerns with IOTA. It isn't very liquid at the moment and almost all trading for it (> 90%) takes place on just one exchange. I would never feel comfortable putting more than just a few bucks in it. That being said, a few bucks in it might totally be worth it.

New exchanges will be added soon, I see it settling around $1 when that happens

That exchange does not let me register. I have no way to trade for it even if I wanted to.

Bitfinex no longer allows US Customers
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Padonak on August 27, 2017, 01:08:47 PM
Following
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: daverobev on August 27, 2017, 05:06:44 PM
I have... 0.02 Bitcoin from a free signup thing a couple of years ago, that I'd not thought about until I read this thread.

Apparently that's about $86 USD.

As a Canadian resident - what's the easiest way of getting this 'out' somehow? It's currently on Circle.

Can I transfer it to Paypal (I have both a US and Canadian account)? Google Play Credit?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: zazpowered on August 27, 2017, 05:07:23 PM
I built an iOS app recently to help ppl track their cryptocurrency portfolios easily. Would appreciate any feedback on it. Thanks!

https://itunes.apple.com/us/app/coinbuddy-track-your-cryptocurrency-portfolio/id1271644974?mt=8
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on August 28, 2017, 09:07:43 AM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on August 28, 2017, 09:40:24 AM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

No idea, but got lucky and bought 2 right before the recent surge in price
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: BrandNewPapa on August 28, 2017, 10:53:11 AM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

Not sure how much can be attributed...
https://www.cryptocoinsnews.com/litecoin-surges-to-new-record-high/
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on August 28, 2017, 11:38:15 AM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: neonlight on August 28, 2017, 12:19:04 PM
I built an iOS app recently to help ppl track their cryptocurrency portfolios easily. Would appreciate any feedback on it. Thanks!

https://itunes.apple.com/us/app/coinbuddy-track-your-cryptocurrency-portfolio/id1271644974?mt=8

Nice! I see you showing Neo in your screenshots. Cheeky way to tell everyone the app is up to date :))
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on August 29, 2017, 05:06:38 PM
I built an iOS app recently to help ppl track their cryptocurrency portfolios easily. Would appreciate any feedback on it. Thanks!

https://itunes.apple.com/us/app/coinbuddy-track-your-cryptocurrency-portfolio/id1271644974?mt=8

Nice! I see you showing Neo in your screenshots. Cheeky way to tell everyone the app is up to date :))

Quality post to username ratio, friend
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on August 31, 2017, 11:44:45 AM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.

Still pushing higher toward $75.  It appears that its presence on Coinbase is the main reason why the price keeps pushing.  No doubt a bunch of people, just like I did, said I'll buy a few just to diversify.  These same casual users aren't going to the great lengths necessary to diversify into the rest of the top-10 coins since they're a hassle to buy. 

For that reason, Coinbase and similar exchanges hold a lot of power.  They are the kingmakers.  No doubt a lot of money is changing hands to both get specific coins on those exchanged AND off of them. 

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 31, 2017, 01:27:03 PM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.

The same could be said about just about every other cryptocurrency. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on August 31, 2017, 05:48:05 PM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.

The same could be said about just about every other cryptocurrency.

Hey man, you must be new to the whole sphere. There are few coins that are as fast as Litecoin right now. The only one that would edge it out is a private coin like XRP, possibly Dash and the GOAT (Ethereum).

Do a transaction with UBIQ (still love the platform) and let me know how long it takes to get 25 transactions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 31, 2017, 06:16:30 PM
Well to clarify there are "faster transactions" and "faster block times"

Litecoin's blocktime is 2.5 minutes, which is much faster than bitcoin but not exceptional among altcoins*, but my understanding is that the lightening network is already up and running on litecoin, so individual transactions can settle much faster than waiting for the next block.

*DASH and ZEC are also 2.5 minutes, Ethereum is 15-17 seconds
Title: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: robdwny on August 31, 2017, 08:14:36 PM
I'm using coinbase for ETH
I'm in the U.S.
Is there a good place that buys and sells all of the cryptocurrency with usd ?


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on August 31, 2017, 08:18:18 PM
What I do is go here (https://coinmarketcap.com/currencies/neo/), click on the currency I am interested in, then on "markets" to find the places where that currency is being traded. In many cases it may be easier to buy bitcoins with USD with whichever exchange works best for you, then move the bitcoins to whatever site has active trading in the actual currency you want to buy.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on August 31, 2017, 09:46:20 PM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.

The same could be said about just about every other cryptocurrency.

Hey man, you must be new to the whole sphere. There are few coins that are as fast as Litecoin right now. The only one that would edge it out is a private coin like XRP, possibly Dash and the GOAT (Ethereum).

Do a transaction with UBIQ (still love the platform) and let me know how long it takes to get 25 transactions.

You misunderstand.  I replied just about every other crypto has faster block times, bigger blocks, cheaper transaction fees than BTC.

I am new.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Hvillian on September 01, 2017, 07:20:35 AM
I'm using coinbase for ETH
I'm in the U.S.
Is there a good place that buys and sells all of the cryptocurrency with usd ?


I also use coinbase to deposit/convert $USD into BTC, ETH, or LTC, then send some of those to Bittrex to buy some of the other coins.  I have been able to find most coins that I am interested on there, and have had no major problems.  Just be careful to transfer the correct currency into the correct wallet.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: robdwny on September 01, 2017, 09:40:03 AM
I'm using coinbase for ETH
I'm in the U.S.
Is there a good place that buys and sells all of the cryptocurrency with usd ?


I also use coinbase to deposit/convert $USD into BTC, ETH, or LTC, then send some of those to Bittrex to buy some of the other coins.  I have been able to find most coins that I am interested on there, and have had no major problems.  Just be careful to transfer the correct currency into the correct wallet.

I have not done this yet, if I buy BTC
And it goes up in price. I take it and and buy another Côin from bittrex.
Will coinbase send me paperwork on profits ?
I'm just confused on how you keep track of all this if I was buying 3-4 different coins. 


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 01, 2017, 03:24:10 PM
Any ideas as to why Litecoin is pushing higher?  I bought exactly one Litecoin for about $25 back in May and it's now at $65.  Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.

Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.

The same could be said about just about every other cryptocurrency.

Hey man, you must be new to the whole sphere. There are few coins that are as fast as Litecoin right now. The only one that would edge it out is a private coin like XRP, possibly Dash and the GOAT (Ethereum).

Do a transaction with UBIQ (still love the platform) and let me know how long it takes to get 25 transactions.

You misunderstand.  I replied just about every other crypto has faster block times, bigger blocks, cheaper transaction fees than BTC.

I am new.


ahhh I did misunderstand but I would still disagree in part. Either way, all good!

Glad you are on board, these % gains are once in a lifetime. I see this market slowing down volatility wise by 2018/2019 so now is the time to cash in...
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 01, 2017, 05:56:56 PM
just speculation, but a lawyer employed by the firm representing the Winklevoss bitcoin ETF will now be in charge of ETF approvals at the SEC.  this could explain the recent bitcoin price surge (just about to reach $5k).

https://www.bloomberg.com/news/articles/2017-08-04/getting-that-etf-approved-may-grow-easier-as-sec-shakes-up-team

http://www.investmentnews.com/article/20170831/FREE/170839978/sec-names-dalia-blass-director-of-investment-management

ETFs are another step in the right direction for legitimizing cryptocurrencies and giving everyday investors access to them.  i expect a huge bubble to form when this happens, whether it's sooner or later.  long-term crypto holders will be fine but i think a lot of folks new to cryptos will get burned.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: OneCoolCat on September 01, 2017, 08:17:09 PM
I'm using coinbase for ETH
I'm in the U.S.
Is there a good place that buys and sells all of the cryptocurrency with usd ?


I also use coinbase to deposit/convert $USD into BTC, ETH, or LTC, then send some of those to Bittrex to buy some of the other coins.  I have been able to find most coins that I am interested on there, and have had no major problems.  Just be careful to transfer the correct currency into the correct wallet.

I have not done this yet, if I buy BTC
And it goes up in price. I take it and and buy another Côin from bittrex.
Will coinbase send me paperwork on profits ?
I'm just confused on how you keep track of all this if I was buying 3-4 different coins. 


Sent from my iPhone using Tapatalk

There is a way to convert fiat to crypto for 0% fees on gdax but you have to wait 4-7 days for your bank deposit to clear.  You deposit cash from your bank account and place a limit order on BTC, LTC or ETH.  Transfer the crypto to an exchange and trade it for whatever coin you want.  I generally do LTC because it has less transaction fees.  Pretty much regret exchanging my LTC now though...
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on September 02, 2017, 02:01:05 AM
just speculation, but a lawyer employed by the firm representing the Winklevoss bitcoin ETF will now be in charge of ETF approvals at the SEC.  this could explain the recent bitcoin price surge (just about to reach $5k).

https://www.bloomberg.com/news/articles/2017-08-04/getting-that-etf-approved-may-grow-easier-as-sec-shakes-up-team

http://www.investmentnews.com/article/20170831/FREE/170839978/sec-names-dalia-blass-director-of-investment-management

ETFs are another step in the right direction for legitimizing cryptocurrencies and giving everyday investors access to them.  i expect a huge bubble to form when this happens, whether it's sooner or later.  long-term crypto holders will be fine but i think a lot of folks new to cryptos will get burned.

I think this is a really bad idea.  A huge bubble will form and then burst.  All of the Wall Street guys can smell that bubble and want a piece of the action, so pressure to legitimize cyrpto as an asset class is very real.  But there is absolutely zero SEC or other regulation of crypto so I don't see how they could ever permit it. 

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: robdwny on September 02, 2017, 06:43:49 AM
I decided to to buy some cryptocurrency I started through Coinbase and bought ETH
Now I'm trying to buy some other coins through bittrex. 
The biggest thing I'm trying to do is not leave the coins in either exchange. I am not the best with computers.
I'm just trying to find the easiest way to move it and what is the cost to take it out of these exchanges and into a wallet
Thanks for the  help


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 03, 2017, 03:13:46 PM
I didn't feel like updating my mining experiment this weekend since at this point the currency fluctuations of bitcoin are overpowering any income from mining. I idled my more energy intensive mining rig, but am still currently bringing in ~$100/month and paying $~20/month in extra electricity.

So instead here are a couple of updates to the cryptocurrency market capitalization and market capitalization graphs. Currencies selected based on a mixture of overall marketshare and how much I see them discussed in this and other forums.

(https://i.imgpile.com/ndbHLr.png) (https://imgpile.com/i/ndbHLr)

(https://i.imgpile.com/ndboyR.png) (https://imgpile.com/i/ndboyR)

You can find versions of the first graph lots of places, but to me the second one is more interesting in a lot of ways. Since early August when the bitcoin cash fork occurred, the overall market cap of this basket of cyptocurrencies is up something like 85%, but if you look at the market composition over that same period, it's actually been quite stable, which suggests that people are dumping money into all the currencies roughly proportionately to their market caps (a lot like how index funds invest), or alternatively maybe for a lot of these cyptos, the currency:BTC exchanges rates are more "sticky" than currency:USD exchange rates, so their dollar prices are increasing to at least maintain bitcoin exchange rate parity.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: flyersman on September 03, 2017, 11:35:48 PM
I decided to to buy some cryptocurrency I started through Coinbase and bought ETH
Now I'm trying to buy some other coins through bittrex. 
The biggest thing I'm trying to do is not leave the coins in either exchange. I am not the best with computers.
I'm just trying to find the easiest way to move it and what is the cost to take it out of these exchanges and into a wallet
Thanks for the  help


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Same question.

How easy is it to buy and sell a Bitcoin or Ethereum?

For instance, let's say BTC is $4k each and ETH is $500.

Can I just go on coinbase with $10k and purchase 2 Bitcoins and 4 units of Ether?

Then transfer them to an external hardrive wallet and disconnect it from my PC.

Then 1 year from now the prices double (BTC - $4k each / ETH - $1000). How easy it to sell and walk about with $20k (10k profit)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 04, 2017, 09:42:50 AM
I decided to to buy some cryptocurrency I started through Coinbase and bought ETH
...
I'm just trying to find the easiest way to move it and what is the cost to take it out of these exchanges and into a wallet

there are fees involved when buying/selling on coinbase, but it's not a big deal if you're only buying occasionally.  the ETH fee for transferring your ETH to an offline wallet for storage is minimal.

Same question.

How easy is it to buy and sell a Bitcoin or Ethereum?

For instance, let's say BTC is $4k each and ETH is $500.

Can I just go on coinbase with $10k and purchase 2 Bitcoins and 4 units of Ether?

Then transfer them to an external hardrive wallet and disconnect it from my PC.

Then 1 year from now the prices double (BTC - $4k each / ETH - $1000). How easy it to sell and walk about with $20k (10k profit)

yes you've got the basics down.  you will need to prove your identity to coinbase first though, but you can do simple identity verification for the amount you're looking to buy.  withdrawing to a wallet on an external hard drive is probably fine for keeping the coins safe for a year.  for storing coins longer than that there are a bunch of options out there depending on your needs and risk tolerance.

to sell on coinbase you'd simply have to send the coins back to your coinbase wallet, wait for the transaction to confirm, and then click 'sell' and withdraw the USD to your bank account.

you'd then need to report the USD gains as capital gains for your taxes.  keep your own records for dates/prices/quantities bought and sold and then make sure the tax documentation coinbase provides matches your records.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: robdwny on September 04, 2017, 11:39:00 AM
I decided to to buy some cryptocurrency I started through Coinbase and bought ETH
...
I'm just trying to find the easiest way to move it and what is the cost to take it out of these exchanges and into a wallet

there are fees involved when buying/selling on coinbase, but it's not a big deal if you're only buying occasionally.  the ETH fee for transferring your ETH to an offline wallet for storage is minimal.

Same question.

How easy is it to buy and sell a Bitcoin or Ethereum?

For instance, let's say BTC is $4k each and ETH is $500.

Can I just go on coinbase with $10k and purchase 2 Bitcoins and 4 units of Ether?

Then transfer them to an external hardrive wallet and disconnect it from my PC.

Then 1 year from now the prices double (BTC - $4k each / ETH - $1000). How easy it to sell and walk about with $20k (10k profit)

yes you've got the basics down.  you will need to prove your identity to coinbase first though, but you can do simple identity verification for the amount you're looking to buy.  withdrawing to a wallet on an external hard drive is probably fine for keeping the coins safe for a year.  for storing coins longer than that there are a bunch of options out there depending on your needs and risk tolerance.

to sell on coinbase you'd simply have to send the coins back to your coinbase wallet, wait for the transaction to confirm, and then click 'sell' and withdraw the USD to your bank account.

you'd then need to report the USD gains as capital gains for your taxes.  keep your own records for dates/prices/quantities bought and sold and then make sure the tax documentation coinbase provides matches your records.

Perfect explanation
The one that is getting me the biggest problems understanding because I'm not the best with computers. It's how to protect the different altcoins in a wallet or cold storage.  It just seems to be going over my head because you can't put them all in one place. I believe every coin has its own wallet I'm just not sure if they are safe to leave there also. 


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Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 04, 2017, 12:46:12 PM
So it sounds like China has decided to also ban ICOs (https://www.cnbc.com/2017/09/04/chinese-icos-china-bans-fundraising-through-initial-coin-offerings-report-says.html). Given that these are already generally illegal in the USA if you actually are getting a share of profits/decision making power (essentially anything that behaves like stock) that's probably going to limit the market for new companies trying to get their initial funding by launching a cryptocurrency. Although I guess they are still legal in the EU?*

*No an expert, please consult your local laws.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 04, 2017, 12:50:39 PM
The one that is getting me the biggest problems understanding because I'm not the best with computers. It's how to protect the different altcoins in a wallet or cold storage.  It just seems to be going over my head because you can't put them all in one place. I believe every coin has its own wallet I'm just not sure if they are safe to leave there also. 

i haven't used one, but for a non-technical person i think the Ledger Nano S (https://www.ledgerwallet.com/products/ledger-nano-s) is maybe the best option.  looks like it works as secure storage for several altcoins (and also allows you to make transactions).  keep the included recovery sheet secure in a separate location from the Ledger itself.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on September 05, 2017, 09:51:31 AM
Bitcoin Investment Trust (GBTC) ... Bitcoin Investment Trust (GBTC) is trading at a greater than 100% premium to its net asset value and charges a whopping 2% fee, 

I think I would just buy post tax


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Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 05, 2017, 10:18:32 AM
At that point couldn't they be issuing additional shares, use the money from the new issue to buy more bitcoins and essentially be printing free money for themselves? I agree with mcampbell, pass on this.

From what I could find the weekly limit at coinbase is $10k/week (so you could invest more than half a million over the course of a year).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 05, 2017, 12:33:34 PM
I did all the verification on coinbase and still only at 5k

My weekly limit when using a US checking account is currently $15k ($6k for credit card purchases). It has been that amount for quite some time, so I think that might be the max. The more I purchased with them, the more they increased it over time. So long as you did all the verification, just keep making purchases and it will gradually keep going up.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 05, 2017, 02:01:07 PM
So I am hitting my limits on CoinBase and I want more. I heard GDAX was a good place to buy with lower fees once you get comfortable with wallets but I think I want to diversify into my 401k.

Now I am not sure this is a good approach to buying bitcoin, but for me I am willing to take the risk. I have most investments in tax sheltered accounts which would be great for trading bitcoin in. Unfortuntaly the only game in town right now seems like GBTC you can buy with fidelity. It seems to have a .0928 backing for every share kind of like IAU or GLD for gold, so at right nows price the value of BTC they hold is worth $405.88 a share and it costs about $750 a share. Huge premium.

I am going to take the plunge anyway and here is why.
  • I am trading with pretax money, and no taxes on the trades
  • No other options in my tax advatage accounts that I know of to hold btc
  • It is uncorrelated to all my other assets which makes my golden butterfly portofolio overall potentially better
  • The price could look inexpensive 5 years from now, good chance of amazon like growth

If another better priced fund comes a long that is a risk for the premium I am paying and could take some losses, but I will just switch to the other fund. I rather have an ETF that tracks the top coins, but this is what we have right now.

Check out Gemini.com, buy and hold the coins yourself, off the exchanges. Buying through a Trust or ETF defeats the entire purpose of this, not even considering the premium.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: CanuckExpat on September 05, 2017, 03:54:06 PM
If you really want to do this, have you looked into using a self directed IRA to buy cryptocurrency?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 05, 2017, 06:16:50 PM
i agree with everyone else.  avoid GBTC.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Jeferson on September 06, 2017, 07:00:39 AM
Most of my money is currently in Bitcoin and Ethereum. But lately, it's has been really tough (especially yesterday) to stay calm with my positions. I have almost all the time the urge to check it, how both BTC and Ethereum are doing, it's almost like some sort of addiction :D Even though I have invested them because I believe in the long term rise.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 06, 2017, 04:12:38 PM
Most of my money is currently in Bitcoin and Ethereum. But lately, it's has been really tough (especially yesterday) to stay calm with my positions. I have almost all the time the urge to check it, how both BTC and Ethereum are doing, it's almost like some sort of addiction :D Even though I have invested them because I believe in the long term rise.

Yeah, it can be addictive. I can feel that way at times, 80-90% of my net worth is tied up in Crypto-Currencies and I have a portfolio consisting of 20+ companies / coins which I keep up to date with. I am effectively a part-time analyst.

It's worth it, but I wonder if this is how stock pickers felt during the the early 1900s on Wall Street
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 06, 2017, 04:55:43 PM
I can feel that way at times, 80-90% of my net worth is tied up in Crypto-Currencies and I have a portfolio consisting of 20+ companies / coins which I keep up to date with. I am effectively a part-time analyst.

It's worth it, but I wonder if this is how stock pickers felt during the the early 1900s on Wall Street

Hi Tonyahu, if you don't mind sharing I'm curious is the 80-90% of your net worth in crypto reflects you making a huge bet with most of your liquid savings, or a small bet a couple of years ago (or more) which has just grown to the point where it dwarfs all your other assets.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on September 06, 2017, 05:26:05 PM
Robert Shiller calls bitcoin a classic bubble:
https://qz.com/1067557/robert-shiller-wrote-the-book-on-bubbles-he-says-the-best-example-right-now-is-bitcoin/

From some of the comments here we see the sort of emotion that drives bubbles.  I have a hard time believing that we're still going to be talking about bitcoin specifically (blockchains yes and perhaps one or more cryptocurriencies) in 20 years, which makes the business of putting it in an IRA a bit ridiculous. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 07, 2017, 06:27:33 AM
Robert Shiller calls bitcoin a classic bubble:
https://qz.com/1067557/robert-shiller-wrote-the-book-on-bubbles-he-says-the-best-example-right-now-is-bitcoin/

From some of the comments here we see the sort of emotion that drives bubbles.  I have a hard time believing that we're still going to be talking about bitcoin specifically (blockchains yes and perhaps one or more cryptocurriencies) in 20 years, which makes the business of putting it in an IRA a bit ridiculous.

I don't think you can go into a thread talking about crypto-currencies and use the exuberance there as evidence that there is a bubble. Nor do I think Shiller's evidence of the same when he talks with students regarding bitcoin as evidence of a bubble. Bubbles can pop for quite a number of reasons. The irrational exuberance idea relates to when there are no more possible buyers after a speculative frenzy to feed the market further into the up trend. The dotcom bubble popped because everyone was invested in dotcom stocks that had no true value. Everyone was investing and purchasing real-estate up to 2007-2008. At some point if those investments fail (bad businesses) or there is some mechanism at play that causes a market forcing (defaulted debt), then you end up having the value of those investments plummet or people pull their money out in droves. We couldn't be any further from that with bitcoin. Stepping back from this thread and the media, take a look around yourself in the real world and you'll see that there are actually so few people that are putting their money into Bitcoin at the moment.

I did see a bubble qualities in a lot of the bogus ICOs that were created that really we not going to provide any real long term value and there are a lot of tokens out there that don't really have a purpose. So in the greater crypto-currency realm I could see some potential for a bubble, but it is so small that if it were to pop, it would hardly be felt. Also, China's recent ruling on ICOs will go a long way toward preventing that bubble from truly forming. The recent pull back in bitcoin due to that decision was good since it helped the market correct now to prevent a much larger correction later down the road.

Whenever I see opponents of bitcoin make claims of bubbles, they rarely ever do it with any sort of deep insight into the market. The article you linked to showed how Robert Shiller really has very little understanding of bitcoin or the crypto-currency world and he provides about zero evidence as to why he thinks it might be a bubble. Even more telling is the fact that he doesn't even know what an ICO is and has never heard of the term before. Then he immediately goes on to give his "wisdom" by claiming that it is a bubble when he literally just heard of the term two seconds prior. Laughable at best.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on September 07, 2017, 12:08:47 PM
I agree that we are not in the sort of bubble territory that tech stocks were in the 90s because many people have still barely heard about bitcoin and don't know where to buy it.  So there is definitely room for cryptocurrency and token speculation to build.  But no one has been able to prove that Bitcoin is actually filling a need or will be of real use at some point.  I think the token prices are so easily manipulated that we're essentially back in the 1800s with salesman selling railroad stock certificates to farmers, then absconding with the money.   



Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 07, 2017, 01:20:48 PM
If you are in a bubble, what percent of people know about/are investing is a good metric to judge how close you are to having the bubble pop.

But it isn't a particularly good metric to distinguish between what is and isn't a bubble. For example many people know about and invest in the stock market, yet it is not a bubble. OTOH the Rhodium bubble of 2008 certainly WAS a bubble even though the vast majority of people didn't participate and probably couldn't even point to the element on a periodic table.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on September 07, 2017, 02:53:23 PM
If you are in a bubble, what percent of people know about/are investing is a good metric to judge how close you are to having the bubble pop.

But it isn't a particularly good metric to distinguish between what is and isn't a bubble. For example many people know about and invest in the stock market, yet it is not a bubble. OTOH the Rhodium bubble of 2008 certainly WAS a bubble even though the vast majority of people didn't participate and probably couldn't even point to the element on a periodic table.

I agree. So, I'm curious of your opinion Maizeman... where are we at?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: surfhb on September 07, 2017, 04:44:41 PM
You guys realize this is an early retirement forum right?    What's the point of FIRE if you loose your ass speculating on Crypto currency?

Don't speculate....invest!    Learn from the past.

Then again, I doubt most on this thread know anything about what a bear market is....too young, most of you.   ;)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on September 07, 2017, 05:07:43 PM

It is risky for sure, but 9 years is a long time in the technology world, it has endured longer then most tech companies. Do people hold Google, Facebook, etc in thier IRA?

Some do, but those are stocks, not tokens.  Stocks are regulated.  Tokens are not.  Real currencies are regulated.  Cryptos are not. 

The success or failure of these currencies and tokens will be totally random.  Basically nothing remains of the massively-hyped 1999 internet companies.  The people who got wealthy during the 90s tech boom like Mark Cuban sold at the right time without realizing it.  Those who bought high never recovered (Yahoo laid out close to $10 billion for Cuban's company and for Geocities...those acquisitions made zero money...nascent Google filled the void and left Yahoo in its dust). 

Few things from the 90s have survived.  So that first-mover advantage wasn't much of one.  Bitcoin has first-mover advantage and Ethereum is the first major token.  Google was about the 7th or 8th search engine, all of the rest are gone.  Facebook came after Myspace which came after Friendster. 
 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 07, 2017, 06:52:26 PM
Some do, but those are stocks, not tokens.  Stocks are regulated.  Tokens are not.  Real currencies are regulated.  Cryptos are not. 

regulation has nothing to do with how well or poorly an asset performs.  national currencies and stocks have plenty of problems.

Quote
The success or failure of these currencies and tokens will be totally random.

it won't be random.  as you say, it's an unregulated free market and the best cryptocurrencies will win.

Quote
Few things from the 90s have survived.

many foundational technologies from the 90s, 80s, and 70s have survived, including the internet and public key cryptography which cryptocurrencies are based on.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on September 07, 2017, 08:08:48 PM
regulation has nothing to do with how well or poorly an asset performs.  national currencies and stocks have plenty of problems.

Of course it does.  All of the things the SEC does (or your county auditor for real estate transactions) is a response to the abuses that existed before those regulations were enacted.  Any call you hear for an "elimination of regulations" is usually a shyster who recognizes how he can swindle someone when that seemingly onerous regulation is lifted. 

We've already seen various short-term surges and falls in prices thanks to hoaxes, but that's really just the beginning.     

Quote
The success or failure of these currencies and tokens will be totally random.

it won't be random.  as you say, it's an unregulated free market and the best cryptocurrencies will win.
[/quote]

Well Litecoin, et al., are all "better" than bitcoin, yet bitcoin reigns supreme, several years after these better competitors appeared.  There are endless examples throughout history of a lesser product winning over a better one.  Better salesmen and better luck.  Bitcoin has the Winklevoss Twins and other high-profile champions.  Litecoin does not. 


Quote
many foundational technologies from the 90s, 80s, and 70s have survived, including the internet and public key cryptography which cryptocurrencies are based on.

Blockchain will be around for a long time. We're obviously going to see some changes in how digital banking transactions are carried out. The specific stew of cryptocurrencies that are attracting speculation at the moment probably won't survive for more than 10 years. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 07, 2017, 08:32:44 PM
If you are in a bubble, what percent of people know about/are investing is a good metric to judge how close you are to having the bubble pop.

But it isn't a particularly good metric to distinguish between what is and isn't a bubble. For example many people know about and invest in the stock market, yet it is not a bubble. OTOH the Rhodium bubble of 2008 certainly WAS a bubble even though the vast majority of people didn't participate and probably couldn't even point to the element on a periodic table.

I agree. So, I'm curious of your opinion Maizeman... where are we at?

I'm honestly not sure at all. I've been following bitcoin off and on since stories about it started showing up on slashdot 6-7 years ago as a curiosity, and had an actual bitcoin wallet since before the mid-2013 price bubble burst. And I'm pretty sure I'm not better at predicting what the price is going to do than you'd get from flipping a coin. But it's awfully fun to watch.

Helps that the only money I've put into mining/crypto was drawn from my entertainment spending, not investment.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on September 08, 2017, 03:26:30 AM
So filecoin just raised $250M USD and kept another $250M USD in premined coins for themselves, for a premarket, precustomer product. If this doesn't scream bubble I'm not sure what would. Read the analysis below


https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on September 08, 2017, 06:30:22 AM
If you are in a bubble, what percent of people know about/are investing is a good metric to judge how close you are to having the bubble pop.

But it isn't a particularly good metric to distinguish between what is and isn't a bubble. For example many people know about and invest in the stock market, yet it is not a bubble. OTOH the Rhodium bubble of 2008 certainly WAS a bubble even though the vast majority of people didn't participate and probably couldn't even point to the element on a periodic table.

I agree. So, I'm curious of your opinion Maizeman... where are we at?

I'm honestly not sure at all. I've been following bitcoin off and on since stories about it started showing up on slashdot 6-7 years ago as a curiosity, and had an actual bitcoin wallet since before the mid-2013 price bubble burst. And I'm pretty sure I'm not better at predicting what the price is going to do than you'd get from flipping a coin. But it's awfully fun to watch.

Helps that the only money I've put into mining/crypto was drawn from my entertainment spending, not investment.

I too have owned Bitcoin since before the 2013 "bubble."  There's really no telling what Bitcoin can do, BUT that doesn't mean I can't have an opinion :) .... I'm leaning towards Bitcoin itself failing* at some point. (When? Much harder to tell.)  I believe it has flaws that will make it be pushed aside for an improved "digital currency."   What I'm really interested in, are blockchains that solve real world problems like, for example, data authentication without having to trust a central organization.

It's wading through all of the hype, scams, and bubbles that's going to be the challenge.

As far as the entire crypto-currency space, while we will go through hype cycles and "bubbles" bursting and corrections, (as seen when Bitcoin skyrocketed to $22 and then a bubble burst and when Bitcoin skyrocketed to $1200 and a bubble burst and when Bitcoin skyrocketed to $4900 and then....) the total market cap of cryptocurrencies WILL continue to go up in time.

*By failing I do not mean the protocol itself.  I mean it has problems with scaling and it will become obsolete to an improved blockchain coin designed to be a digital currency.  It would probably still remain more as a souvenir type thing.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 08, 2017, 07:11:50 AM

I too have owned Bitcoin since before the 2013 "bubble."  There's really no telling what Bitcoin can do, BUT that doesn't mean I can't have an opinion :) .... I'm leaning towards Bitcoin itself failing* at some point. (When? Much harder to tell.)  I believe it has flaws that will make it be pushed aside for an improved "digital currency."   What I'm really interested in, are blockchains that solve real world problems like, for example, data authentication without having to trust a central organization.

It's wading through all of the hype, scams, and bubbles that's going to be the challenge.

As far as the entire crypto-currency space, while we will go through hype cycles and "bubbles" bursting and corrections, (as seen when Bitcoin skyrocketed to $22 and then a bubble burst and when Bitcoin skyrocketed to $1200 and a bubble burst and when Bitcoin skyrocketed to $4900 and then....) the total market cap of cryptocurrencies WILL continue to go up in time.

*By failing I do not mean the protocol itself.  I mean it has problems with scaling and it will become obsolete to an improved blockchain coin designed to be a digital currency.  It would probably still remain more as a souvenir type thing.

I agree with you that there will likely be some sort of cryptocurrency widely used to facilitate payments in the future. Bitcoin definitely has scaling problems* but also the advantage of significant network effects from its first mover position. A lot of other currencies have significant advantages at a protocol level, and its likely even further improved currencies will emerge over time. That could be enough to let them overtake and replace (like facebook supplanted myspace), or they could fail despite being technically superior (like betamax failed to supplant VHS).

Speaking of hype and scams and bubbles, the whole ICO mess is getting a bit embarrassing though. In principle I liked the idea of tracking ownership of shares or things that behave like shares using a blockchain but because the way SEC regulations are set up, most ICO tokens don't represent a share of profits or rights to vote in company decisions, but essentially just pre-sales of hypothetical products. More like kickstarter if you could trade your rights to the hypothetical future delivery of a laser razor on the secondary market and most people were buying the hypothetical right to a laser razor** only in the hope that someone else would pay more for it in the future.

*Theoretically bitcoin also the potential to update the protocol over time to address them, although as we have seen in the last few months this tends to be rather messy in practice.

**An actual kickstarter campaign. No, nobody received any laser razors. Yes, it's really fun to say laser razor.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on September 08, 2017, 09:03:22 AM
The sort of standard mushy definition of a bubble is when people are buying something because they heard it's something everyone is buying, when they don't actually have any use for it or really know what it is.

There are all sorts of secondary symptoms - companies popping up to sell various similar products (or the concept of a similar product), financial companies and "analysts" marketing only vaguely related services, and these days, lots of uncritically positive chatter (this time it's different!) about the product on social media.

Tulips, Beanie babies, crappy condos in Sacramento in 2005, etc. Same symptoms every time.

Schiller is right - it's got all the classic bubble signs. That's not to say it won't hit $100,000 or something, or that the underlying math/tech isn't a good idea that will be with us for a long time, but the crypto currency world certainly looks like a bubble right now.

I'd personally bet on either a government or big international company (or group of companies) entering with a currency (actually designed well for the purpose of exchanging goods and services), backed by a big publicly known entity, and marketed as such, and that currency displacing everything already out there.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 08, 2017, 11:16:44 AM
The beautiful thing about this chat is it will be a good historical placeholder. In a few years when these technologies are thriving and taking over those who took the risk will be rewarded heavily and those who nay-sayed without doing their due diligence will see what they missed.

So filecoin just raised $250M USD and kept another $250M USD in premined coins for themselves, for a premarket, precustomer product. If this doesn't scream bubble I'm not sure what would. Read the analysis below


https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c

There is definitely a bubble in terms of start up ICO's, but something like Ethereum or IOTA is very undervalued.


I'd personally bet on either a government or big international company (or group of companies) entering with a currency (actually designed well for the purpose of exchanging goods and services), backed by a big publicly known entity, and marketed as such, and that currency displacing everything already out there.

-W

Looks like you have yet to do much research on Ethereum :]
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on September 08, 2017, 12:06:23 PM
The beautiful thing about this chat is it will be a good historical placeholder. In a few years when these technologies are thriving and taking over those who took the risk will be rewarded heavily and those who nay-sayed without doing their due diligence will see what they missed.

So filecoin just raised $250M USD and kept another $250M USD in premined coins for themselves, for a premarket, precustomer product. If this doesn't scream bubble I'm not sure what would. Read the analysis below


https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c

Reward? $250M for zero equity. The ICOs seem like no reward. There may be reward in Bitcoin or Ethereum.


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on September 08, 2017, 12:12:48 PM
Quote
The success or failure of these currencies and tokens will be totally random.

it won't be random.  as you say, it's an unregulated free market and the best cryptocurrencies will win.

Yeah.  The unregulated free market always picks the best technology to win.  That's why betamax destoyed VHS.  Wait . . .
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 08, 2017, 12:46:29 PM
To clarify, I do believe that 70%+ of these currencies will fail but we still have much larger valuations to hit before any "bubble talk" can be had. Eventually, yes, the bubble (2019-2020ish) will deflate and only those with unique value propositions will remain.

https://hackernoon.com/why-everyone-missed-the-most-mind-blowing-feature-of-cryptocurrency-860c3f25f1fb
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on September 08, 2017, 01:20:06 PM
To clarify, I do believe that 70%+ of these currencies will fail but we still have much larger valuations to hit before any "bubble talk" can be had. Eventually, yes, the bubble (2019-2020ish) will deflate and only those with unique value propositions will remain.

https://hackernoon.com/why-everyone-missed-the-most-mind-blowing-feature-of-cryptocurrency-860c3f25f1fb

You are making some absolutely wild assumptions that no one on this Earth could humanly know, to the point that it's starting to make the opposing view's case even stronger.

And I'm for Blockchain technology.   
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 08, 2017, 05:12:54 PM
regulation has nothing to do with how well or poorly an asset performs.  national currencies and stocks have plenty of problems.
Of course it does.  All of the things the SEC does (or your county auditor for real estate transactions) is a response to the abuses that existed before those regulations were enacted.  Any call you hear for an "elimination of regulations" is usually a shyster who recognizes how he can swindle someone when that seemingly onerous regulation is lifted. 

do you not believe in free markets?  there are many examples of inferior products that only exist because they are protected by regulation and lobbying.  one example is the crumbly old slow internet-averse global financial system.  another example is the fossil fuel automotive industry.

Quote
Quote
The success or failure of these currencies and tokens will be totally random.
it won't be random.  as you say, it's an unregulated free market and the best cryptocurrencies will win.
Well Litecoin, et al., are all "better" than bitcoin, yet bitcoin reigns supreme, several years after these better competitors appeared.  There are endless examples throughout history of a lesser product winning over a better one.  Better salesmen and better luck.  Bitcoin has the Winklevoss Twins and other high-profile champions.  Litecoin does not. 

bitcoin was invented first, luck has nothing to do with it.  litecoin (and other coins forked from bitcoin's source code) are cheap clones backed by way weaker mining networks.  that's why bitcoin reigns supreme.  litecoin was a failed attempt to make an ASIC-proof coin.

Blockchain will be around for a long time. We're obviously going to see some changes in how digital banking transactions are carried out. The specific stew of cryptocurrencies that are attracting speculation at the moment probably won't survive for more than 10 years. 

bitcoin's been running for almost nine years now.  you mean one more year or ten more?

Quote
The success or failure of these currencies and tokens will be totally random.

it won't be random.  as you say, it's an unregulated free market and the best cryptocurrencies will win.

Yeah.  The unregulated free market always picks the best technology to win.  That's why betamax destoyed VHS.  Wait . . .

and VHS, DVD, and BluRay have all been abandoned in favor of streaming and DVRs.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on September 08, 2017, 05:58:00 PM
Quote
The success or failure of these currencies and tokens will be totally random.

it won't be random.  as you say, it's an unregulated free market and the best cryptocurrencies will win.

Yeah.  The unregulated free market always picks the best technology to win.  That's why betamax destoyed VHS.  Wait . . .

and VHS, DVD, and BluRay have all been abandoned in favor of streaming and DVRs.

My point was that there exist many examples in the past where the best stuff available was passed over for more inferior competitors by the unregulated free market.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 08, 2017, 09:18:39 PM
right, but only temporarily until superior competitors came along.  it appears random in the short term, but it's not random.  if you zoom out you can clearly see that VHS, the temporary "winner," is long gone and deservedly so.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on September 11, 2017, 07:31:21 AM
right, but only temporarily until superior competitors came along.  it appears random in the short term, but it's not random.  if you zoom out you can clearly see that VHS, the temporary "winner," is long gone and deservedly so.

Right.  But figuring out which technology will be the winner is not possible at the time that it matters for investing . . . because sometimes the market chooses the worst option.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 13, 2017, 12:33:06 PM
regulation has nothing to do with how well or poorly an asset performs.  national currencies and stocks have plenty of problems.
Of course it does.  All of the things the SEC does (or your county auditor for real estate transactions) is a response to the abuses that existed before those regulations were enacted.  Any call you hear for an "elimination of regulations" is usually a shyster who recognizes how he can swindle someone when that seemingly onerous regulation is lifted. 

do you not believe in free markets?  there are many examples of inferior products that only exist because they are protected by regulation and lobbying.  one example is the crumbly old slow internet-averse global financial system.  another example is the fossil fuel automotive industry.

Quote
Quote
The success or failure of these currencies and tokens will be totally random.
it won't be random.  as you say, it's an unregulated free market and the best cryptocurrencies will win.
Well Litecoin, et al., are all "better" than bitcoin, yet bitcoin reigns supreme, several years after these better competitors appeared.  There are endless examples throughout history of a lesser product winning over a better one.  Better salesmen and better luck.  Bitcoin has the Winklevoss Twins and other high-profile champions.  Litecoin does not. 

bitcoin was invented first, luck has nothing to do with it.  litecoin (and other coins forked from bitcoin's source code) are cheap clones backed by way weaker mining networks.  that's why bitcoin reigns supreme.  litecoin was a failed attempt to make an ASIC-proof coin.


Furthermore, those who claim "Litecoin is faster" are short sighted.

Sure it's faster when experiencing 10% of the network stress, but if LTC experienced the same transaction volume of BTC it would be much slower, have higher fees...etc.


To clarify, I do believe that 70%+ of these currencies will fail but we still have much larger valuations to hit before any "bubble talk" can be had. Eventually, yes, the bubble (2019-2020ish) will deflate and only those with unique value propositions will remain.

https://hackernoon.com/why-everyone-missed-the-most-mind-blowing-feature-of-cryptocurrency-860c3f25f1fb

You are making some absolutely wild assumptions that no one on this Earth could humanly know, to the point that it's starting to make the opposing view's case even stronger.

And I'm for Blockchain technology.   

Which assumptions in particular?

Let's get them clarified so we can revisit them in the future to see if what I said panned out.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on September 13, 2017, 02:40:41 PM
I thought this was an interesting article in the NYT. I knew bitcoin was primarily a Chinese thing, but I didn't realize just how much of it is being done in China.

https://www.nytimes.com/2017/09/13/business/bitcoin-mine-china.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business&region=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront&_r=0

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: surfhb on September 13, 2017, 03:29:13 PM
right, but only temporarily until superior competitors came along.  it appears random in the short term, but it's not random.  if you zoom out you can clearly see that VHS, the temporary "winner," is long gone and deservedly so.

Right.  But figuring out which technology will be the winner is not possible at the time that it matters for investing . . . because sometimes the market chooses the worst option.

Exactly.    I once invested thousands of dollars in a HD-DVD authoring system only to see Blu-Ray win the battle.   The only reason BD won was because Sony paid the studios to release their content on BD ONLY.    Leaving small time producers like myself priced out of the market.   
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Saskatchewstachian on September 13, 2017, 04:55:44 PM
Apologies if I missed this earlier in the thread but looking to gather thoughts on investing in GBTC (Bitcoin Investment Trust).

It seems like it would be a good vehicle to gain exposure to bitcoin without having to complete things like setting up a wallet, getting registered on an exchange,etc. Instead it can trade OTC directly in your brokerage account.

Am I missing a main downfall of using GBTC instead of directly buying BTC?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 13, 2017, 05:25:35 PM
i'll add that with GBTC you never see the private keys of the underlying bitcoin, so you don't know that it actually exists, and this defeats the purpose of bitcoin.  the rule of thumb is that if you don't have exclusive ownership of the private keys you don't own the bitcoin.  you might not care about this if you just want to make a quick buck.

if a different bitcoin blockchain fork takes the lead a month from now, or a year from now, or whatever, will you still own what is considered to be "bitcoin" or will you own worthless coins on the dead blockchain?  you don't have to worry about this if you own the private keys before the fork.

it may be a worthwhile gamble if your goal is to make a quick buck, not if you actually want to own bitcoin long term.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: powskier on September 14, 2017, 11:21:26 PM
I keep my BTC and LTC on a Trezor wallet and ETH on a web based wallet via Trezor. But I just picked up a few Monero through Kraken and am not sure what to do with them. Any ideas?

A lot of the crypto trading scene reminds me of aspects of the penny stock scene 15-20 years ago, except more liquidity, more volatility and 24hr trading. Can be a bit wild out there as proven by the past 6 months.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: talltexan on September 15, 2017, 07:47:37 AM
We watch the trading of GBTC around the office here. It's pretty entertaining when you can get a year's worth of appreciation (or decline) in a single trading day.

Truly no one seems to have any idea what this stuff is actually worth! That's a source of excitement as well as stress. But if investment is about accepting volatility in exchange for a return, I cannot see how the return would be worth the volatility here. I suppose investing 1% of your stach would be defensible. If it triples next year, you got 2% more than you'd have with gold. But that other 99% of your portfolio is giving you 9.9%/year, amiright?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 15, 2017, 09:15:32 AM
Truly no one seems to have any idea what this stuff is actually worth! That's a source of excitement as well as stress. But if investment is about accepting volatility in exchange for a return, I cannot see how the return would be worth the volatility here. I suppose investing 1% of your stach would be defensible. If it triples next year, you got 2% more than you'd have with gold. But that other 99% of your portfolio is giving you 9.9%/year, amiright?

I don't think investing is about accepting volatility in exchange for a return. I think it is about accepting risk in exchange for a return. You can have a non-volatile investment that is extremely risky and vice versa you can have an extremely volatile investment that doesn't have much relative risk.

So rather than categorizing bitcoin in your investment portfolio based on its volatility, it should be categorized based on its risk/reward and how you see that fitting into your overall investment strategy. If you feel bitcoin has a lot of risk to it, then you can include that in with your other high risk/high reward investments. The portion of your overall investment profile that consists of high risk investments should be determined based on your risk tolerance.

I don't view bitcoin as risky as others might view bitcoin and I am also long on bitcoin. Therefore its short-term volatility doesn't matter much to me. I also include it as a slightly larger portion of my portfolio than others might be willing to tolerate because of my high risk tolerance. So to me, the risk is worth the reward and it has become one of my primary after-tax investment options.

I also don't think it is fair to say that nobody has any idea how much bitcoin is worth. I just think that everyone has their own different idea on how much it is worth and everyone is willing to sell their bitcoin at differing values. The same goes for just about every asset out there. Someone with a holding of gold will part with it at a certain market price while someone with the same amount of gold holdings might part with theirs at a completely different price. They value their gold differently just like everyone is valuing their bitcoin differently. It's just that there are far fewer people who own bitcoin and so these differences in valuations are felt more in the market which is why we see so much volatility.

Finally, to me, its value also comes from beyond just its price point in the market. I feel that bitcoin and the technology behind it represents a huge shift in how currency is handled by humans. I see bitcoin as revolutionary as the internet itself. Therefore I am willing to put some of my money into bitcoin based on this idea without taking into consideration any risk or reward by doing so.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: talltexan on September 18, 2017, 08:57:42 AM
Thanks for this well-thought-out response.

The difficulty I have with valuing bitcoin is the same difficulty I would have with any commodity: there is no apparent income stream/earnings equivalent. I'm a lot more comfortable valuing a business based on its earnings than I am valuing currency.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on September 18, 2017, 10:16:58 AM
I feel that bitcoin and the technology behind it represents a huge shift in how currency is handled by humans. I see bitcoin as revolutionary as the internet itself. Therefore I am willing to put some of my money into bitcoin based on this idea without taking into consideration any risk or reward by doing so.

Bitcoin is almost 10 years old.  Nobody was really talking about it being "the future" until its value started getting ridiculous in the last year.  Yeah, there was that push back in 2012 or 2013, but after the crash, it returned to being the butt of jokes.   
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: thenextguy on September 18, 2017, 10:34:37 AM
I feel that bitcoin and the technology behind it represents a huge shift in how currency is handled by humans. I see bitcoin as revolutionary as the internet itself. Therefore I am willing to put some of my money into bitcoin based on this idea without taking into consideration any risk or reward by doing so.

Nobody was really talking about it being "the future" until its value started getting ridiculous in the last year.

I think you may have the cause and effect backwards.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 18, 2017, 10:47:58 AM
Bitcoin is almost 10 years old.  Nobody was really talking about it being "the future" until its value started getting ridiculous in the last year.  Yeah, there was that push back in 2012 or 2013, but after the crash, it returned to being the butt of jokes.   

What does its age have to do with anything?

Not sure what you mean by nobody, unless you're only following bitcoin based on what the media is saying at any given moment. Why did you put "the future" in quotes? What jokes are you referring to when you say that bitcoin is the butt of them?

Bitcoin doesn't have to be used in every coffee transaction for it to be an astronomical success or for it to drastically change how currency is treated by humans across the world. At the moment, if a government enacts poor monetary policies or strict tyrannical controls of currency in any given country, there isn't much that the citizen population can do against that at the moment. Their wealth is at the complete mercy of their government. All money today must typically adhere to institutional practices which are enforced from the government down. Gold is too cumbersome to move and not freely liquid enough for the common citizen. Some of the only other options are obscure legal arrangements/loopholes to skirt around laws that usually require immense assets to take advantage and are therefore out of reach of the common citizen.

The threat of bitcoin completely changes all of this. You may think that this isn't important, but going forward, the capability of bitcoin to allow any citizen anywhere in the world to exit any economy at any time is a huge financial freedom. It is a freedom that hasn't really existed in the modern era. In this sense, bitcoin has already succeeded and it will only become more apparent as time goes on. This freedom is not dependent upon the price of bitcoin in any given market.

And that's just one of its many benefits.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 18, 2017, 11:23:57 AM
Cheers to anyone who bought the dip last week! I didn't have any liquid fiat I was willing to use.

I keep my BTC and LTC on a Trezor wallet and ETH on a web based wallet via Trezor. But I just picked up a few Monero through Kraken and am not sure what to do with them. Any ideas?

A lot of the crypto trading scene reminds me of aspects of the penny stock scene 15-20 years ago, except more liquidity, more volatility and 24hr trading. Can be a bit wild out there as proven by the past 6 months.

www.MyMonero.Com always make sure you double check the website, there are phishing sites around.

Monero is in final testing with Ledger soon, which will open up Hardware wallet support. I expect Trezor to follow suit.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on September 18, 2017, 11:41:10 AM


What does its age have to do with anything?

Not sure what you mean by nobody, unless you're only following bitcoin based on what the media is saying at any given moment. Why did you put "the future" in quotes? What jokes are you referring to when you say that bitcoin is the butt of them?


Back when Bitcoin was invented, nobody was talking about the actual coins being a buy-and-hold investment.  The coins were used as currency for a time, although most of it was either tax evasion (paying bonuses in bitcoin, for example) or to buy illegal drugs.  People who heard about bitcoin but had no reason to do that stuff had no reason to figure out how to buy bitcoins, so they didn't. 

Also, the "dream" held out there that bitcoin will be a tool for the little guy is very much a be careful what you wish for situation.  There has been a dark side to all of the so-called disruptive innovations of the last decade -- downsides that blind proponents refuse to acknowledge.  Uber, airbnb, etc., have all caused as many problems as they have solved, and cryptocurrency and tokens are no different. 



Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 18, 2017, 12:26:18 PM
Back when Bitcoin was invented, nobody was talking about the actual coins being a buy-and-hold investment.  The coins were used as currency for a time, although most of it was either tax evasion (paying bonuses in bitcoin, for example) or to buy illegal drugs.  People who heard about bitcoin but had no reason to do that stuff had no reason to figure out how to buy bitcoins, so they didn't. 

Also, the "dream" held out there that bitcoin will be a tool for the little guy is very much a be careful what you wish for situation.  There has been a dark side to all of the so-called disruptive innovations of the last decade -- downsides that blind proponents refuse to acknowledge.  Uber, airbnb, etc., have all caused as many problems as they have solved, and cryptocurrency and tokens are no different.

I am really having a hard time trying to follow the point you're trying to make. Maybe it is me, but I've reread your original post where you quoted me as well as this quote about and I don't understand what you're saying.

I agree that most of the original bitcoin owners were not looking at bitcoin as a long term investment. In fact, most early-adopters treated it as an experiment and proof of concept. I'd argue that most people who were using bitcoin in the very early days when its value was negligible were the very people who believed in the social good or technological aspect of it more than any investment property of it. If you read Satoshi's whitepaper on bitcoin, this is bitcoin's very aim.

There were certainly some inflows of nefarious activity with bitcoin that developed thereafter as usually those groups of individuals have a greater pressing need for advancements that further their capabilities than the general population. However, Homeland Security has even stated that they've found the amount of nefarious activity within bitcoin stagnate lately and that their tracking capabilities have increased.

So if the point is to state that the social bad outweighs the social good, time will tell. In my opinion though freedom will always come at cost, but I believe that there is always more good that outweighs bad in the world and therefore any freedom applied to the human population as a whole will always benefit the greater good more proportionally than it will the bad in the world.

No doubt there are always downsides to additional freedoms, I fully acknowledge that and am not blind to them. In your example, I fully realize that AirBnB has led to price increases in numerous neighborhoods that has been caused by renting specifically for the AirBnB business model.

If the point is that the bad outweighs the good, then I would certainly argue against that. Was that the point you're making? I hope I addressed the point you were talking about. If I went on a tangent completely irrelevant to your point, then I apologize.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on September 19, 2017, 08:52:33 PM
Quote
China is moving forward with plans to shut down Bitcoin exchanges in the country, starting with trading platforms in key cities. All Bitcoin exchanges in Beijing and Shanghai have been ordered to submit plans for winding down their operations by 20 September. ... All exchanges are required to send regulators a detailed "risk-free" plan of how they intend to exit the market before 18:30 local time on Wednesday 20 September.

http://www.bbc.com/news/business-41320568

Now at the same time, it seems like the price of bitcoin is moving up rather than down. On September 15th it hit a recent minimum of just under $3000, and is now back up close to $4000. As I write this it's about 11 in the morning in Beijing, so in seven and a half hours their exchanges should start going dark. .... Going to be fascinating to see how this plays out!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on September 20, 2017, 05:32:39 PM
If anyone is looking to get into a new position I would check out VTC. It should get atomic swaps with LTC by year end and then with BTC within 1-2 years. It's currently not even in the top 100 market cap but is one of the older alts. Currently trading at about 90 cents.

Fundamentals are good and team is good, HYPE hasn't hit it yet.

Cheers
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on September 20, 2017, 05:39:49 PM
Fundamentals are good and team is good, HYPE hasn't hit it yet.

Cheers

I'm honestly curious - what "fundamentals" do cryptocurrencies/exchanges/companies have?

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: zuht on September 21, 2017, 05:49:26 PM
I hold BTC, ETH, and XMR (Monero) in roughly equal portions -- not a lot, maybe $1,000-$1,500 in all. All of that has come from mining ETH and XMR with a combination of CPU (i7 and E5 Xeons) and GPU (1070, 480, 570s). I mined Litecoin a few years ago, but liquidated the coin and hardware quickly (made a few hundred bucks in the process). At this point, I view the mining as "buying" coin at a discount (the cost of electricity and hardware versus market price) to hold, rather than trying to make regular income by selling whatever comes in.

Of the coins I hold, they all feel a little different. Bitcoin is about as close to "fiat" as cryptocurrency gets, though it's starting to show its age. With Monero, it's all about anonymity. Ethereum is really neat in concept with the smart contracts, and that's why you see so many offshoots and so much corporate interest. As a software developer and security buff though, I feel like those smart contracts are going to end up being its biggest liability. Just like it's easy to build flashy software riddled with vulnerabilities, it's easy to create a contract riddle with vulnerabilities -- there's a heck of a lot of money one the line with the contracts though!

Blockchain tech is definitely intriguing though, and I'll keep at it until the wasted electricity costs too much to make sense. I do feel a little guilty about how much power I'm using on this hobby.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on September 21, 2017, 06:07:08 PM
Fundamentals are good and team is good, HYPE hasn't hit it yet.

Cheers

I'm honestly curious - what "fundamentals" do cryptocurrencies/exchanges/companies have?

-W

lol
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 22, 2017, 03:59:02 PM
I'm honestly curious - what "fundamentals" do cryptocurrencies/exchanges/companies have?
lol


Fundamentals are good and team is good, HYPE hasn't hit it yet.
This kind of comment is what I'd expect from a PUMP & DUMP kind of investor.  The statements made about future value have no basis.  It would be more productive if you give some review of this new coin you just bought and how it's better than others rather than a shameless pump.

agreed.  we shouldn't be doing empty sales pitches for various cryptocurrencies.  if you want to argue why a particular coin is valuable the requirement should be to defend the position you've taken with a coin with lots of posts and discussion here -- not a single one-off post.

if coin X has "atomic swaps" with coins Y and Z, why wouldn't you just buy coins Y and Z?  why would X still be valuable if Y and Z aren't?

--

as for "what fundamentals cryptocurrencies have" i think it can be broken down like:

since the code and features are in my opinion not "fundamentals," we should only be looking at the health of the community of users/miners/developers/companies for a coin, and government favorability as well.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: alena30 on September 28, 2017, 04:46:08 AM
We must accept the fact that the cryptocurrency is the future of currency as the blockchain technology is far better than the traditional way followed by the central banks.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on September 28, 2017, 07:37:21 AM
We must accept the fact that the cryptocurrency is the future of currency as the blockchain technology is far better than the traditional way followed by the central banks.

No we mustn't.  No cryptocurrency to date has taken the place of fiat currency or proved itself as a useful means of exchange for goods.  It's interesting technology - something to think about, and something that might be a good idea to keep an eye on.  By no means is there any kind of certainty regarding it.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on September 28, 2017, 08:34:26 AM
Don't bother, those are just sock puppets spamming us.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: powskier on September 30, 2017, 12:21:09 AM
I didn't invest at Google IPO because I didn't quite understand how it all worked.I hate the feeling I have now looking at what could have been.

I threw a little play money at some crypto because I didn't want to have that same feeling 10 years from now.

Yes there are tons of gimmicky ICO's and pump and dump is for real,  but there is also some very interesting blockchain technology happening and also an entirely new model of funding for start ups. Why hassle with VCs and banks when you can just issue a coin....
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on September 30, 2017, 12:42:37 AM
One thing I've noticed when discussing cryptocurrencies elsewhere is that actual discussion of things that can materially effect the future of cryptocurrency is almost totally absent among crypto boosters.

For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers. This project was announced about two months ago, and doesn't make use of any existing cryptocurrencies; instead it uses blockchain technology to simply make the existing system easier. If you think crypto has a future beyond fringe uses, this should be genuinely earth-shattering: we've just been shown that existing cryptocurrencies will be irrelevant to perhaps 99.9% of the world's money market activity. And yet, the day this appeared in the Financial Times, bitcoin's price simply kept going up. Even here, I don't believe there's been a single mention of it. At the very least, crypto is limited to interpersonal transactions that can't be done using existing currencies: at the most, even that is potentially under threat as it's now clear that banks can build their own systems for these purposes. And yet there's nothing; no acknowledgement of what this means, no acknowledgement that it's even happening.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 30, 2017, 08:10:05 AM
For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers.

Saying that institutional banks utilizing blockchain technology to become more efficient is a threat to an open and decentralized bitcoin is like saying that a gas powered pickup truck model increasing its miles per gallon from 15MPG to 25MPG is a threat to Tesla. Bitcoin is such a huge paradigm shift that an efficiency improvement for centralized financial institutions utilizing fiat money will not be what impacts its success.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on September 30, 2017, 08:21:28 AM
For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers.

Saying that institutional banks utilizing blockchain technology to become more efficient is a threat to an open and decentralized bitcoin is like saying that a gas powered pickup truck model increasing its miles per gallon from 15MPG to 25MPG is a threat to Tesla. Bitcoin is such a huge paradigm shift that an efficiency improvement for centralized financial institutions utilizing fiat money will not be what impacts its success.

Well, as a sort of normal non-aligned person who uses money, I'd be much more likely to use (for actually buying stuff) a crypto currency issued by a major bank or government than Bitcoin or some other free-range crypto. The various horror stories of exchanges disappearing, people having their crypto stolen, etc all add up (for me, and probably for most folks without a strong preexisting opinion) to total distrust of any of them.

When ordinary people (not rich Chinese trying to hide money or speculate) start buying and selling actual stuff with Bitcoin on a large scale, you could convince me.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 30, 2017, 09:56:25 AM
Well, as a sort of normal non-aligned person who uses money, I'd be much more likely to use (for actually buying stuff) a crypto currency issued by a major bank or government than Bitcoin or some other free-range crypto. The various horror stories of exchanges disappearing, people having their crypto stolen, etc all add up (for me, and probably for most folks without a strong preexisting opinion) to total distrust of any of them.

When ordinary people (not rich Chinese trying to hide money or speculate) start buying and selling actual stuff with Bitcoin on a large scale, you could convince me.

-W

I have no doubt that there will be advances is payment technologies utilizing fiat currencies, etc. In fact, there already has been (ApplePay/Google wallet/SamsungPay, NFC, EMV chip cards, etc). Please explain how central banks or financial institutions that utilize blockchain technology to reduce overhead costs will make any sort of difference for the consumer. Maybe it will be a slight change in the point of sale transaction where they use their cell phone to pay (similar to ApplePay) instead of swiping a card. Or maybe the consumer pays lower fees for international transfers (although the greater likelihood is that banks will simply improve their profit margins with these efficiencies). A blockchain backend within a centralized system isn't really much different than a database backend in a centralized system.

Exchanges disappearing and crypto getting stolen are all part of the pain points of an early technology getting its start. Larger exchanges that are more tightly regulated and better funded will naturally appear over time (look at Coinbase as an example). That isn't a criticism against an open decentralized bitcoin though. Who knows, maybe some day there won't be a need for an exchange which would make that argument seem ridiculous in hindsight. New apps and consumer education will make it easier for endusers to store and secure their bitcoin without as much worry about losing it.

If you think that the people buying bitcoin are rich Chinese, then you're sorely mistaken. Especially now given the fact that the Chinese market has largely evacuated the market since the Chinese government clamped down on exchanges. The Chinese market makes up a very small portion of the market.

But you miss the whole point of bitcoin. Given some of your statements about bitcoin, I think this would be a good read for you to help you understand Bitcoin a little better:

https://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/ (https://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on September 30, 2017, 11:35:36 AM
For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers.

Saying that institutional banks utilizing blockchain technology to become more efficient is a threat to an open and decentralized bitcoin is like saying that a gas powered pickup truck model increasing its miles per gallon from 15MPG to 25MPG is a threat to Tesla. Bitcoin is such a huge paradigm shift that an efficiency improvement for centralized financial institutions utilizing fiat money will not be what impacts its success.

That is firstly a wildly optimistic assessment of the state of the US car market and Tesla's share of it (they're only just barely on the radar, and it remains very much an open question whether they'll scale up fast enough to prevent established car companies cutting the ground from under them), and secondly a wildly optimistic assessment of Bitcoin's position. Tesla represents less than 1% of new car sales in the United States, and compared to Bitcoin that's a staggering success. Bitcoin transactions total about a quarter of a million a day: for comparison, Starbucks sells about 25 times that many drinks in the same time. Compared to fiat currency transactions, Bitcoin activity is a rounding error - and that's including God knows how many speculative transactions that have no purpose beyond trying to get rich trading the damn stuff.

Here's a question: what percentage of daily transactions in the United States is composed of purchases of goods or services using cryptocurrencies? I suspect it's beyond microscopic: Bitcoin isn't Tesla, it's not even your friend Dave who upgrades his car every year and sells the old one on Craigslist. It's a libertarian crank selling coal-rolling kits on eBay.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on September 30, 2017, 01:28:28 PM
market share has nothing to do with it, i believe the point was that the markets don't overlap.  that's why it's not earth-shattering for the crypto community.  people who buy teslas don't care about the latest models of gas-powered pickups.  likewise, people who believe in the future of non-government cryptocurrencies don't care about a new way banks are going to be transacting with fiat currency.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on September 30, 2017, 02:24:11 PM
market share has nothing to do with it, i believe the point was that the markets don't overlap.  that's why it's not earth-shattering for the crypto community.  people who buy teslas don't care about the latest models of gas-powered pickups.  likewise, people who believe in the future of non-government cryptocurrencies don't care about a new way banks are going to be transacting with fiat currency.

That was exactly my point.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on September 30, 2017, 03:17:20 PM
market share has nothing to do with it, i believe the point was that the markets don't overlap.  that's why it's not earth-shattering for the crypto community.  people who buy teslas don't care about the latest models of gas-powered pickups.  likewise, people who believe in the future of non-government cryptocurrencies don't care about a new way banks are going to be transacting with fiat currency.

That was exactly my point.

If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 01, 2017, 08:52:51 AM
If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought.

First off, marketshare of what? Second, in what world is the price of anything ever dictated by marketshare? By that measure, any new product, asset or commodity that comes to market would automatically start with a value of $0. It is no different for currencies.

The value of something in an open market is strictly determined by supply and demand. The more demand for something with a limited supply, then the greater its value. The market determines the value. Bitcoin is one of the few completely open and unmanipulated marketplaces out there, so if this economic principle were ever true for anything, it would be for bitcoin. You can argue that some people are purchasing bitcoin at today's price on the premise that its future marketshare of the gold market (for example) will be a certain amount, but that doesn't change the fact that today's value of bitcoin is based on today's market forces (supply/demand) of bitcoin, not tomorrow's. So the given price of bitcoin today is strictly based on today's supply and demand for it. So long as people continue to view it as a good store of value, then there will continue to be new people looking to bitcoin to store some of their wealth. The premise that it is a good store of value has a direct relationship with how well the network operates and whether or not it is technologically stable, which for the last almost 10 years, it has been so incredibly.

Now, if you'd excuse me, I am off to demand that I purchase a Ferrari for a few bucks while their marketshare is negligible.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on October 01, 2017, 09:06:46 AM

Now, if you'd excuse me, I am off to demand that I purchase a Ferrari for a few bucks while their marketshare is negligible.

If that works, get one for me too.  Good point about market share vs price
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 01, 2017, 09:17:02 AM
If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought.

First off, marketshare of what? Second, in what world is the price of anything ever dictated by marketshare? By that measure, any new product, asset or commodity that comes to market would automatically start with a value of $0. It is no different for currencies.

The value of something in an open market is strictly determined by supply and demand. The more demand for something with a limited supply, then the greater its value. The market determines the value. Bitcoin is one of the few completely open and unmanipulated marketplaces out there, so if this economic principle were ever true for anything, it would be for bitcoin. You can argue that some people are purchasing bitcoin at today's price on the premise that its future marketshare of the gold market (for example) will be a certain amount, but that doesn't change the fact that today's value of bitcoin is based on today's market forces (supply/demand) of bitcoin, not tomorrow's. So the given price of bitcoin today is strictly based on today's supply and demand for it. So long as people continue to view it as a good store of value, then there will continue to be new people looking to bitcoin to store some of their wealth. The premise that it is a good store of value has a direct relationship with how well the network operates and whether or not it is technologically stable, which for the last almost 10 years, it has been so incredibly.

Now, if you'd excuse me, I am off to demand that I purchase a Ferrari for a few bucks while their marketshare is negligible.

There's no point in continuing this particular thread of the conversation. We're at cross-purposes. I still cannot for the life of me see how a history of less than a decade, punctuated by astronomical gains and horrendous losses in price, and specifically named by the guy who wrote the Nobel-winning book on asset bubbles as being a perfect example of an asset bubble, can be sanely compared to gold, which has been used as a store of value for several thousand years and is more or less immediately convertible to usable money. Especially not when a significant number of its proponents don't even believe a currency should be a store of value.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 01, 2017, 09:57:58 AM
I think Bitcoin could conceivably be e-gold. The design of they system (inherently deflationary/limited supply) is actually ideal for store-of-value use. The hyper-volatility and various scams/frauds/thefts are obviously a problem.

As a currency, it's a bad joke. I am not sure how you could do a worse job designing a currency.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on October 01, 2017, 11:17:20 PM
Invested in my first ICO. It was painless. I feel like I am on the ground floor of an amazon, microsoft, or pets.bomb. I am ready for moon or total loss. So exciting. I still rather have a highly diversified crytpo ETF that spreads out the risks.

You can’t “invest” in an ICO cause you don’t get equity. You get speculation tokens you hope will appreciate. It’s no where near getting in ground floor of an Amazon


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on October 02, 2017, 07:50:14 AM
I didn't invest at Google IPO because I didn't quite understand how it all worked.I hate the feeling I have now looking at what could have been.

The mind is kinda selective though.  You remember Google because they were the winner.  There were a lot of losers, and picking the winner was not easy to do:

(http://www.wordstream.com/images/internet-search-engines.jpg)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 02, 2017, 09:40:54 AM
For perspective: if you compare Google's share price post-IPO and Bitcoin's price from the point at which it reached a dollar, you can see that Bitcoin is growing in price about eight to ten times as fast as Google. Whether that's indicative of limitless potential or an impending collapse is up to the observer.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: PDXTabs on October 02, 2017, 09:44:20 AM
The mind is kinda selective though.  You remember Google because they were the winner.  There were a lot of losers, and picking the winner was not easy to do...

That's a very good point. I loved Alta Vista. Google attacked a fortified hill and won.

EDIT- Actually, the fought (at least) a two front battle with Alta Vista and Yahoo.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 02, 2017, 10:30:50 AM
Speaking of attacking fortified hills and winning.

(http://heidicohen.com/wp-content/uploads/Facebook-and-MySpace-From-Google-Trends.jpg)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on October 02, 2017, 01:59:38 PM
Google came along at the moment when Yahoo blew $3 billion buying out Mark Cuban for something that went absolutely nowhere. Later, Yahoo stayed alive because of its lucky investment in Alibaba. 

Switch a few things around back in 1996-97 (someone buys a condo in the same association as someone else, or something like that) and the history of the internet as we know it would be quite different.  That's why early investors are more lucky than good.  And not only do they have to buy the right stock, they have to hold it for a decade or more. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 02, 2017, 03:16:07 PM
If you are based in the USA, you are either not "getting in on the ground floor" or the companies you are investing in through ICOs are going to end up in big trouble with the SEC. At best, companies in the USA are able to offer kickstarter-like ICOs where you are prepaying for a product that may exist in the future, potentially at a discount to its ultimate market price.

To understand the difference between these two transactions, ask anyone who helped kickstart the Oculus Rift with $2.4M in funding what their share of the profit was when Lucky Palmer went on to sell the company to facebook for a sweet $2.3B less than two years later (1000x return in two years).

Outside the USA you could indeed be getting in on the ground floor with various business ventures with something like an equity stake, but keep in mind that many VCs and Angel investors end up losing money, even the ones that make money expect to lose money on between 9/10 and 19/20ths of their investments, and that's after careful review of business plans and assessing the qualifications and personal qualities of the founders. As long as you really are prepared for a total loss though... here's hoping you shoot the moon!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Jeferson on October 02, 2017, 03:19:04 PM
I see that not many money mustache folkes support and believe in these digital coins. I am, however of an opposite opinion and I believe that they have their place in the twenty-first century. I don't see much of a use for Bitcoin, because the fees that are associated with Bitcoin transactions are quite extensive, plus the process time isn't exactly great. Saying that, Bitcoin's only purpose is only to transfer money from one individual to another, nothing else. Other cryptocurrencies, such as Ethereum has also other usages, such as the dapps. You can check this crypto guide (https://tradingbeasts.com/cryptocurrency-trading-for-beginners/), if you are not sure how to determine the potential of a cryptocurrency. But still, if you don't think they have future, even after you read smth about them, there is no point for you to invest in them.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on October 02, 2017, 03:23:11 PM
If you are based in the USA, you are either not "getting in on the ground floor" or the companies you are investing in through ICOs are going to end up in big trouble with the SEC. At best, companies in the USA are able to offer kickstarter-like ICOs where you are prepaying for a product that may exist in the future, potentially at a discount to its ultimate market price.

To understand the difference between these two transactions, ask anyone who helped kickstart the Oculus Rift with $2.4M in funding what their share of the profit was when Lucky Palmer went on to sell the company to facebook for a sweet $2.3B less than two years later (1000x return in two years).

Outside the USA you could indeed be getting in on the ground floor with various business ventures with something like an equity stake, but keep in mind that many VCs and Angel investors end up losing money, even the ones that make money expect to lose money on between 9/10 and 19/20ths of their investments, and that's after careful review of business plans and assessing the qualifications and personal qualities of the founders. As long as you really are prepared for a total loss though... here's hoping you shoot the moon!

Theoretically companies outside USA could offer equity via an ICO, I have yet to see any that have done this. Cause they haven’t needed to cause people are essentially giving them free Kickstarter type money, hoping the tokens will raise in value. It’s illegal in USA to even have on your website that the tokens can raise in value or they are any kind of “investment”.


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Bicycle_B on October 03, 2017, 12:14:36 AM
One thing I've noticed when discussing cryptocurrencies elsewhere is that actual discussion of things that can materially effect the future of cryptocurrency is almost totally absent among crypto boosters.

For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers. This project was announced about two months ago, and doesn't make use of any existing cryptocurrencies; instead it uses blockchain technology to simply make the existing system easier. If you think crypto has a future beyond fringe uses, this should be genuinely earth-shattering: we've just been shown that existing cryptocurrencies will be irrelevant to perhaps 99.9% of the world's money market activity. And yet, the day this appeared in the Financial Times, bitcoin's price simply kept going up. Even here, I don't believe there's been a single mention of it. At the very least, crypto is limited to interpersonal transactions that can't be done using existing currencies: at the most, even that is potentially under threat as it's now clear that banks can build their own systems for these purposes. And yet there's nothing; no acknowledgement of what this means, no acknowledgement that it's even happening.

Informative and thought-provoking comment; thanks for posting.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 03, 2017, 02:31:17 AM
Fair points ICO's should not be considered an "investment", but they have potential for making you real money. I'm not sure how a kickstarter does that.

How do you make real money pre-purchasing a product at a discount? You resell your product to someone who is willing to pay more for it than you were. People actually did this with Oculus Rift pre-orders and some of them doubled their money.

Cryptocurrency-like tokens makes the process of buying and reselling a lot lower friction, which reduces transaction costs, but produces greater elasticity of supply, which means you're unlikely to see the biggest mismatches between supply and demand which is when people make the most money on reselling products.

TL;DR I'm not arguing there isn't potential to make money on ICOs, but they're not set up to give "invest in a successful silicon valley startup" scale returns, even if the underlying company turns out to be the next amazon/google. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: flyersman on October 03, 2017, 08:03:18 AM
What are everyones thoughts on Crypto Index's?

https://crypto20.com/en/

I just signed up for that one and also read an article that a few Google Employees started one as well.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 03, 2017, 11:02:14 AM
My personal opinion is that a crypto index fund is a very bad idea. The risks involved in investing in Bitcoin are almost identical to the risks involved in investing in Ethereum, or Ripple, or Monero - they all have wildly volatile price swings, they're all more or less completely unusable as actual currency, and they're all effectively in the same mode characterised by Robert Shipper as indicative of a bubble. Building an index fund does nothing to negate those risks, which are vastly bigger than the risks specific to individual altcoins.

Further to that, an index fund runs the risk of building false confidence. Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 03, 2017, 12:54:02 PM
My personal opinion is that a crypto index fund is a very bad idea.

Further to that, an index fund runs the risk of building false confidence. Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry.

So your stance is essentially that the crypto-currency industry as a whole does not have any worthwhile future at all? Wow, that's quite the bearish stance. Even some of the most bearish of bears on crypto-currencies yield to the fact that crypto-currencies in general are here to stay.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 03, 2017, 01:30:56 PM
My personal opinion is that a crypto index fund is a very bad idea.

Further to that, an index fund runs the risk of building false confidence. Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry.

So your stance is essentially that the crypto-currency industry as a whole does not have any worthwhile future at all? Wow, that's quite the bearish stance. Even some of the most bearish of bears on crypto-currencies yield to the fact that crypto-currencies in general are here to stay.

My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase. There may be cryptocurrencies in the future (although it's instructive to note that perhaps 99% of the population of the US have never once used cryptocurrency, and perhaps 99% of the remainder haven't used it for anything except speculative investment or illegal activity), but there's no reason to assume that what's currently popular will be what turns out to be any use whatsoever.

There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be. There's nothing stopping organisations which like blockchain technology from simply using that without reference to existing cryptocurrency. A gigantic chunk of the money that's currently in cryptocurrency is only there because of the promise of massive gains: if we believe the market will crash (and I have very little doubt that it will), we have no basis for trying to figure out what cryptocurrencies will be worth when the dust settles. Nothing. Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty,  putting money in a crypto index is close to pointless.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 03, 2017, 02:23:27 PM
My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase. There may be cryptocurrencies in the future (although it's instructive to note that perhaps 99% of the population of the US have never once used cryptocurrency, and perhaps 99% of the remainder haven't used it for anything except speculative investment or illegal activity), but there's no reason to assume that what's currently popular will be what turns out to be any use whatsoever.

There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be. There's nothing stopping organisations which like blockchain technology from simply using that without reference to existing cryptocurrency. A gigantic chunk of the money that's currently in cryptocurrency is only there because of the promise of massive gains: if we believe the market will crash (and I have very little doubt that it will), we have no basis for trying to figure out what cryptocurrencies will be worth when the dust settles. Nothing. Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty,  putting money in a crypto index is close to pointless.

It is clear from what you've posted you have your biases and misunderstands of the technology and how it works. The blatant bogus statistics that you spout out are ridiculous and for someone who denounces speculation, you sure are doing an awful lot of it yourself.

Also, I don't think you understand how the crypto indexes work (such as BTWTY and Crypto20). They reallocate themselves to the top twenty crypto-currencies every month or so. So unless the crypto-currency market completely dries up (extremely unlikely), then a crypto-index fund has a lot of value. Plus, unlike mutual funds today, they're low maintenance with non-existent fees (driven by programming) and can't be manipulated and you don't have to worry whether or not your institution is gambling your money away behind the seasons. This is the power that mathematics, openness, and programmable money will bring to the financial industry.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 03, 2017, 03:00:30 PM
One of the things I find odd about the crypto currency folks is how emotional they are about it (not you Maizeman!)

I own lots of stuff - stocks, bonds, a couple houses, many big fancy tools, etc. All of those things have some intrinsic value to varying degrees.

When I want to sell or buy something, I could care less what I use to make that transaction as long as it's easy, relatively secure, and that the currency is stable in value and accepted pretty much everywhere. I have no interest in whether or not that's dollars, bitcoins, dirty socks, you name it. I'm agnostic on the specific currency as long as it has those basic attributes.

As of right now, none of that applies, and the "success" of crypto looks more to me like failure, since none of them have managed to become commonly used or even stable in value. I have no interest in buying something that has no use and is only transacted with itself (I don't go out and buy a bunch of dollars to stick under my bed either, and those at least are easy to use for buying stuff I actually want).

So an index fund to me seems more like the cherry on top of a speculation sundae than evidence that the markets are "mature" or that you can "invest" in the technology as a whole by buying such a fund.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 03, 2017, 03:23:55 PM
My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase. There may be cryptocurrencies in the future (although it's instructive to note that perhaps 99% of the population of the US have never once used cryptocurrency, and perhaps 99% of the remainder haven't used it for anything except speculative investment or illegal activity), but there's no reason to assume that what's currently popular will be what turns out to be any use whatsoever.

There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be. There's nothing stopping organisations which like blockchain technology from simply using that without reference to existing cryptocurrency. A gigantic chunk of the money that's currently in cryptocurrency is only there because of the promise of massive gains: if we believe the market will crash (and I have very little doubt that it will), we have no basis for trying to figure out what cryptocurrencies will be worth when the dust settles. Nothing. Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty,  putting money in a crypto index is close to pointless.

It is clear from what you've posted you have your biases and misunderstands of the technology and how it works. The blatant bogus statistics that you spout out are ridiculous and for someone who denounces speculation, you sure are doing an awful lot of it yourself.

Also, I don't think you understand how the crypto indexes work (such as BTWTY and Crypto20). They reallocate themselves to the top twenty crypto-currencies every month or so. So unless the crypto-currency market completely dries up (extremely unlikely), then a crypto-index fund has a lot of value. Plus, unlike mutual funds today, they're low maintenance with non-existent fees (driven by programming) and can't be manipulated and you don't have to worry whether or not your institution is gambling your money away behind the seasons. This is the power that mathematics, openness, and programmable money will bring to the financial industry.

What's with the furiously emotional response?

You asked about my position, and I explained it. I specifically avoided discussing the specifics of the technology, because the reasons I believe cryptocurrencies will collapse have nothing to do with the technology itself.

Regarding the rebalancing: I don't think you've read what I've written. I argued that indexing cryptocurrencies is futile, because they're all exposed to the same major risks, and explained that I expect to see a severe crypto crash. I do expect to see a drastic shrinkage in the crypto market, so monthly rebalancing and near-zero fees make no difference. Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value? If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates.

On the subject of my numbers: yes, I guessed, because real figures are hard to come by. That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency. And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on October 03, 2017, 04:38:48 PM
One of the things I find odd about the crypto currency folks is how emotional they are about it (not you Maizeman!)

I own lots of stuff - stocks, bonds, a couple houses, many big fancy tools, etc. All of those things have some intrinsic value to varying degrees.

When I want to sell or buy something, I could care less what I use to make that transaction as long as it's easy, relatively secure, and that the currency is stable in value and accepted pretty much everywhere. I have no interest in whether or not that's dollars, bitcoins, dirty socks, you name it. I'm agnostic on the specific currency as long as it has those basic attributes.

As of right now, none of that applies, and the "success" of crypto looks more to me like failure, since none of them have managed to become commonly used or even stable in value. I have no interest in buying something that has no use and is only transacted with itself (I don't go out and buy a bunch of dollars to stick under my bed either, and those at least are easy to use for buying stuff I actually want).

So an index fund to me seems more like the cherry on top of a speculation sundae than evidence that the markets are "mature" or that you can "invest" in the technology as a whole by buying such a fund.

-W

Your posts, and many others here crying that cryptocurrencies are useless because "you can't buy shit or use it to transact in an efficient way", make it blatantly clear that you have a very narrow minded grasp on how blockchain can be used.  No, Bitcoin is not widely used for transferring money, and buying or selling things.  Yes, it has some issues that are keeping it from being a currency.  But there are extremely exciting use cases for blockhain, and therefor a token that runs the chain.  So much that it will change industries.  And when you have a blockchain, you have a token, or coin, or "cryptocurrency" (which is what most people are using as the term for these tokens) that is used for the protocol to maintain decentralization.  And they can grow in value as a blockchain is used or adopted.

Right now, there is a speculative bubble in all of these cryptocurrencies as a whole. (This can be seen when comparing value derived from actual use vs the value the coins are listed at today due to speculation.) MANY will fail.  Lot's of money will be made and lost, and new companies and blockchains will be created for different use cases.  Many more will fail, and some will become successful.  This doesn't mean that "cryptocurrencies" as a whole are useless and will be a failure, any more than saying all internet companies were a failure because of the dot com bubble.

I believe you are confusing "cryptocurrency" with a blockchain token meant to be used as an actual currency, which very few are.  Ethereum, for example, runs on a token called Ether.  It was never designed to be used as a currency.  Yet it get's listed under the term "cryptocurrency."  I think as the market matures it will develop better distinguishing terms for various coins. (Maybe?)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 03, 2017, 04:54:53 PM
What's with the furiously emotional response?

You asked about my position, and I explained it. I specifically avoided discussing the specifics of the technology, because the reasons I believe cryptocurrencies will collapse have nothing to do with the technology itself.

Regarding the rebalancing: I don't think you've read what I've written. I argued that indexing cryptocurrencies is futile, because they're all exposed to the same major risks, and explained that I expect to see a severe crypto crash. I do expect to see a drastic shrinkage in the crypto market, so monthly rebalancing and near-zero fees make no difference. Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value? If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates.

On the subject of my numbers: yes, I guessed, because real figures are hard to come by. That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency. And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto.

What was it about my post that was "furiously emotional"? I don't think I posted anything or wrote any sentence that exuded any emotion at all, in fact. Was there something specific about my post that led you to believe it was furiously emotional?

I did read what you wrote and to be honest I didn't really see much of any specifics other than your opinion on the matter...

Quote
-"If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought."
-"The risks involved in investing in Bitcoin are almost identical to the risks involved in investing in Ethereum, or Ripple, or Monero"
-"they all have wildly volatile price swings, they're all more or less completely unusable as actual currency, and they're all effectively in the same mode characterised by Robert Shipper as indicative of a bubble."
-"Building an index fund does nothing to negate those risks, which are vastly bigger than the risks specific to individual altcoins."
-"My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase."
-"There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be."
-"Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value"
-"If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates."
-"Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty,  putting money in a crypto index is close to pointless."
-"My personal opinion is that a crypto index fund is a very bad idea."
-"Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry."
-"That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency."
-"And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto."

These are all the things from the last several posts of yours and most of it is either just speculative itself, misinformed and opinionated, or just outright false.

Investing in a crypto index fund allows an individual to diversify among crypto-currencies as a whole. It is no different than someone who feels that technology companies will do well, but rather than investing in specific companies, they invest in a fund that diversifies among the largest tech companies. You don't invest in a fund like that unless you're already comfortable investing in the underlying market itself. The same goes for a crypto index fund. Clearly, for someone like you who doesn't think crypto-currencies will be around in 10 years, then its not a fund targeted toward an individual like yourself. But, to say that they're a bad idea when they're clearly designed for individuals comfortable with the idea of crypto-currencies fails to understand the benefit they provide. They're for the individuals who feel that crypto-currencies have a place in the world, but aren't comfortable picking a winner just yet. If a particular crypto-currency fails and loses market cap, then it will fall out of the index fund and another currency will take its place. Overall, however, if one feels that the overall market will continue to grow (so far it has), then the index fund will as well.

I don't mind debating crypto-currencies and one look back at my previous posts throughout this threat and others regarding crypto-currencies will show that I enjoy a good debate and will always keep things cordial and free from personal attacks. However, looking at your previous quotes above, it is difficult to have an adequate debate regarding a topic when one side fails to talk about anything specific or outright uses false or exaggerated information.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 03, 2017, 05:09:39 PM
One thing that I think many don't realize about crypto-currencies is the boom in innovation that is going to take place on the internet because of them. Previously, inventing new protocols and internet technologies involved the classic "chicken or the egg" problem. Inventing a new protocol typically depends upon its inherently widespread use among users. However, without its widespread use, it won't be adopted by users. Crypto-currencies change this. It monetizes the protocols themselves. This will allow for a ton of innovation over the next decade or so that I don't think a lot of people realize. Take for example SMTP. It is the protocol that email rides over and it is completely out of date. Yet, even though it is very outdated and lacks any sort of security at all, it is still widely used simply because nothing can supplant its widespread use.

Monetizing the protocols (which crypto-currencies allow for) allows for individuals to become invested in the protocols themselves and thus receive economic gains when the protocol sees widespread use and by becoming invested in these protocols, they also become users of the protocol. This solves the "chicken or the egg" problem. All the protocols in use on the internet today, despite the fact that brilliant minds poured into them, weren't monetized. DNS, SMTP, TCP, HTTP, etc. No one received economic benefit directly from those protocols even though they've completely revolutionized our way of life. Protocol innovation has now stagnated because of this and I believe crypto-currencies will completely revolutionize internet innovation because of the benefit they provide. We will no longer be handcuffed by the "chicken or egg" problem that is holding innovation back.

So you want a use case? There is one for you and I can't wait to see where it takes us.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 03, 2017, 07:58:58 PM
I'm unable to follow this.  Is blockchain the protocol?  So investing/trading in the currency (e.g. bitcoin) will result in adoption of blockchain technology as a standard?  I don't understand how that in turn would make the tokens more valuable. 

I know all the protocols listed above and have a working understanding of how protocols are developed and evolve through consortiums and standards bodies like IETF.  So I get about half of your comment above, but I don't think it ties together like you suggest.

My understanding is that blockchain is the protocol, like TCP/IP or HTTP are protocols.  The coins are what travels over the protocol, like a particular webpage or Netflix show would.  Now that we have this new protocol, companies (like banks) are starting to put it to all kinds of new uses.  Recording the transfer of digital tokens is a nice proof of concept, but it seems the protocol can move on to bigger things without the original tokens that got it started.

Take, for example, Siacoin. If someone wanted to create a decentralized storage network to compete against Amazon, you'd have a chicken and the egg problem. No one would store their files on the network because there isn't enough people offering storage on the network to be decentralized and with enough capacity to support a user base...and without a user base, no one is going to offer up their storage to a service that doesn't make it worth their while. So a system like that with an open protocol would never be able to get off the ground. With blockchain technology, users become financially invested in the protocol itself. So users are then incentivized to offer storage on the network since that is what earns the tokens as part of the protocol. Now, since there is an entire protocol being supported by incentivized contributors, the user base can grow and adopt it.

We're going to see all sorts of new innovations like this that we're never possible before simply because economics never allowed it to be possible.

Here is a further read on the subject. Not the exact article I was looking for when I first read about the concept, but still a decent read:

http://continuations.com/post/148098927445/crypto-tokens-and-the-coming-age-of-protocol (http://continuations.com/post/148098927445/crypto-tokens-and-the-coming-age-of-protocol)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on October 04, 2017, 12:11:09 AM
So what happens to the value of Bitcoin when Wall St. gets exchanges shut down in the United States just like they were in China? 

At some point in the near future the investment banks are going to develop their own blockchain network and their own daily "cash" currency and their own digital "gold" and they'll get the exchanges shut down. 

They have been harassing peer-to-peer lending and microlending for several years now.  This is the next thing. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 04, 2017, 02:41:03 AM
What's with the furiously emotional response?

You asked about my position, and I explained it. I specifically avoided discussing the specifics of the technology, because the reasons I believe cryptocurrencies will collapse have nothing to do with the technology itself.

Regarding the rebalancing: I don't think you've read what I've written. I argued that indexing cryptocurrencies is futile, because they're all exposed to the same major risks, and explained that I expect to see a severe crypto crash. I do expect to see a drastic shrinkage in the crypto market, so monthly rebalancing and near-zero fees make no difference. Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value? If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates.

On the subject of my numbers: yes, I guessed, because real figures are hard to come by. That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency. And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto.

What was it about my post that was "furiously emotional"? I don't think I posted anything or wrote any sentence that exuded any emotion at all, in fact. Was there something specific about my post that led you to believe it was furiously emotional?

I did read what you wrote and to be honest I didn't really see much of any specifics other than your opinion on the matter...

Quote
-"If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought."
-"The risks involved in investing in Bitcoin are almost identical to the risks involved in investing in Ethereum, or Ripple, or Monero"
-"they all have wildly volatile price swings, they're all more or less completely unusable as actual currency, and they're all effectively in the same mode characterised by Robert Shipper as indicative of a bubble."
-"Building an index fund does nothing to negate those risks, which are vastly bigger than the risks specific to individual altcoins."
-"My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase."
-"There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be."
-"Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value"
-"If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates."
-"Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty,  putting money in a crypto index is close to pointless."
-"My personal opinion is that a crypto index fund is a very bad idea."
-"Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry."
-"That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency."
-"And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto."

These are all the things from the last several posts of yours and most of it is either just speculative itself, misinformed and opinionated, or just outright false.

Investing in a crypto index fund allows an individual to diversify among crypto-currencies as a whole. It is no different than someone who feels that technology companies will do well, but rather than investing in specific companies, they invest in a fund that diversifies among the largest tech companies. You don't invest in a fund like that unless you're already comfortable investing in the underlying market itself. The same goes for a crypto index fund. Clearly, for someone like you who doesn't think crypto-currencies will be around in 10 years, then its not a fund targeted toward an individual like yourself. But, to say that they're a bad idea when they're clearly designed for individuals comfortable with the idea of crypto-currencies fails to understand the benefit they provide. They're for the individuals who feel that crypto-currencies have a place in the world, but aren't comfortable picking a winner just yet. If a particular crypto-currency fails and loses market cap, then it will fall out of the index fund and another currency will take its place. Overall, however, if one feels that the overall market will continue to grow (so far it has), then the index fund will as well.

I don't mind debating crypto-currencies and one look back at my previous posts throughout this threat and others regarding crypto-currencies will show that I enjoy a good debate and will always keep things cordial and free from personal attacks. However, looking at your previous quotes above, it is difficult to have an adequate debate regarding a topic when one side fails to talk about anything specific or outright uses false or exaggerated information.

"The blatant bogus statistics that you spout out are ridiculous."

This is what I was referring to as an emotional response.

Regarding the statistics I mentioned (and freely admitted were very rough guesses): it appears as though I have severely overestimated the number of American cryptocurrency users. This item of research from Cambridge University (http://www.cam.ac.uk/research/news/study-highlights-growing-significance-of-cryptocurrencies) indicates that the total number of users worldwide is three million, so my estimate of the same number for America alone was off by quite a distance. Cryptocurrency is in fact a good deal more niche than I had thought.

Regarding my estimate of 1% of transactions being for the purchase of legal goods or services: I freely admit that this is a shot in the dark. There's very little data on this at present; the best I could find just now was a survey done at a Chinese conference, where the self-reported figure for such transactions was 5%. If you have data to the contrary, feel free to share; I'm happy to recant in the face of better data.

On the specific subject of cryptocurrencies as a method for monetising protocol adoption: I have to say, I've been discussing cryptocurrencies with ardent advocates for a while now, and you're the first person I've seen coming in with this as a potential use case. It makes for interesting reading, and makes sense of some of what I've read elsewhere that was poorly explained. I'd still be extremely wary of investing in crypto at the moment, as I'm convinced prices have bee badly inflated by speculative investment, but I'm a good deal less cynical about its uses in ten to fifteen years than I was yesterday.

Would I be right in saying that this effectively means buying Siacoin is equivalent to putting money into an early-stage startup?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 04, 2017, 06:36:11 AM
"The blatant bogus statistics that you spout out are ridiculous."

This is what I was referring to as an emotional response.

Regarding the statistics I mentioned (and freely admitted were very rough guesses): it appears as though I have severely overestimated the number of American cryptocurrency users. This item of research from Cambridge University (http://www.cam.ac.uk/research/news/study-highlights-growing-significance-of-cryptocurrencies) indicates that the total number of users worldwide is three million, so my estimate of the same number for America alone was off by quite a distance. Cryptocurrency is in fact a good deal more niche than I had thought.

Regarding my estimate of 1% of transactions being for the purchase of legal goods or services: I freely admit that this is a shot in the dark. There's very little data on this at present; the best I could find just now was a survey done at a Chinese conference, where the self-reported figure for such transactions was 5%. If you have data to the contrary, feel free to share; I'm happy to recant in the face of better data.

On the specific subject of cryptocurrencies as a method for monetising protocol adoption: I have to say, I've been discussing cryptocurrencies with ardent advocates for a while now, and you're the first person I've seen coming in with this as a potential use case. It makes for interesting reading, and makes sense of some of what I've read elsewhere that was poorly explained. I'd still be extremely wary of investing in crypto at the moment, as I'm convinced prices have bee badly inflated by speculative investment, but I'm a good deal less cynical about its uses in ten to fifteen years than I was yesterday.

Would I be right in saying that this effectively means buying Siacoin is equivalent to putting money into an early-stage startup?

That Cambridge survey was also conducted over a year ago starting in Sept 2016 when the market cap for bitcoin was less than $10 billion and the total market cap for all crypto-currencies was at around $12 billion. The market has grown 10-fold since then. So you're essentially excluding the largest growth year for the market by citing those statistics. Going by Coinbase's sign-ups alone, there are about 10.8 million accounts with Coinbase and recently they've been adding accounts up to a magnitude of about 100k-200k a day.

Don't get me wrong, I'm not saying that crypto-currencies are widely used and I'd even accept figures that are arguably very small, so it isn't necessarily that I was arguing the numbers themselves. Outside of the handful of people I've gotten into crypto-currencies myself, I'd only know one other person who actually owns any. But, I think the more important figure isn't what the current adoption levels are, but what the trend is for those adoption levels. This is an extremely new market and concept and so it is going to have a small market, but the trend shows that it is growing and growing fast. The fact that a lot of people know about bitcoin because of the media shows that it is only a matter of time before its continued existence will bring in more people willing to give it a try.

I fully agree that the number of ICOs that are poorly designed or even worse, fraudulent, are extremely high. A vast majority will fail. That will largely have its biggest impact on the ICO tokens themselves and the blockchain they're built on (Ethereum). I don't think the impact on bitcoin will be felt as much. Bitcoin is certainly the reserve currency for all other cryptos, but the demand that these other cryptos place on bitcoin is extremely fleeting. The current market demand for bitcoin is mostly for bitcoin itself.

I don't think investing in Siacoin is quite the same as investing in a fledgling startup. Most startup investments (even outside of crypto), in my opinion, are bold promises or based upon prototypes that are hoped to become widely used. Investing in one of these startups is largely speculative based on the idea that they'll become successful. Sia is a completely usable network today. So while it is still in a fledgling state and has new features being added all the time, it is still a completely usable product. So in that sense there is something that can actually be purchased with Siacoin. As long as there is something that is receivable, I think it is less speculative than a startup that is based on promises. Purchasing and owning the product itself is vastly different than investing in a company that has yet to prove itself. Sia is a usable product today and its usability can be attributed 100% to the breakthrough of the blockchain concept.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 04, 2017, 09:24:14 AM
Interesting example on Sia.  On the surface it looks like a valid concept and real use of digital currency for decentralized cloud storage. 

I did some digging and have some concerns though.  This thing could be just taking off, or it could be failing - I'm not sure.  The coin itself had a spike in July, but now is down about 75% from the peak.  I guess this was due to speculation?  It seems that speculators driving up the price could effectively kill the whole thing before it gets off the ground by driving up the price too high.

I see the top hosts are offering storage for free now as well.  So in effect, the coin is not being used at all for it's intended purpose right now?  There is so much over-capacity in the network and so few early users that hosting storage is not profitable (income=0).

I have no idea whether Sia will succeed or fail. The decentralized storage space is starting to really pickup with many other competitors out there now (Storj, MaidSafe, Filecoin, etc). I do think however that any decentralized storage solution needs to remain cheap to be competitive. The economics of decentralized storage need to remain unprofitable. What I mean by that is that in order to out price its centralized competitors, decentralized cloud storage needs to remain cheap so that it prevents the profitability of large scale storage solutions from taking over the network (thus removing the decentralized nature of it). The point is to make it so hosts simply offer up their unused disk space to the network to utilize.

Also, when you upload your files to the network, it is spread out over many hosts. So even a few hosts offering free storage does not mean that your storage contract on the network is free for the files you upload.

Anyway, the example of Sia isn't whether or not it is a success story, but merely an example of the fact that crypto-currencies will allow for protocol monetization that was previously impossible. In that regard, Sia is a shining success given the fact that there is an abundance of storage offered up on the network even without a large user base to justify it. That effectively shows that the "chicken and the egg" problem didn't come into play which was the main point I was making. We're going to see a lot of innovation because of this; where great ideas no longer die before they were even started.

The possibilities are endless. Another concept that isn't feasible with fiat currencies is the concept of micro-payments. Currently, there isn't a way to pay for something cheaper than a penny and the current financial system that is built upon and supported by fees doesn't support payments that are too low to support those fee structures. With micro-payments, monetized protocols and machine-based currencies, we could very well see a world where sending an email could cost 1/100th of a penny. This would be a negligible cost for the individual who sends a few emails a day or for a business that sends several thousand emails a day. But, for the spammer who sends out millions or even billions of emails out in any given spam campaign, it suddenly makes that spam campaign economically unfeasible. Something like that could make spam email a thing of the past. Obviously nothing like that is in the works, but even the fact that these concepts are now theoretically possible because of crypto-currencies shows the vast potential of them.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Ravenik on October 04, 2017, 10:07:42 AM

I did some digging and have some concerns though.  This thing could be just taking off, or it could be failing - I'm not sure.  The coin itself had a spike in July, but now is down about 75% from the peak.  I guess this was due to speculation?  It seems that speculators driving up the price could effectively kill the whole thing before it gets off the ground by driving up the price too high.


Yes, speculation drives these markets.  There have been a few major events that have impacted the ecosystem since the summer, and they cause bitcoin to plummet.  When bitcoin drops, then most altcoins drop even harder.  Their value in satoshis goes down, and the value of the satoshis themselves go down.  Double whammy.  Then you have market sentiment on the individual altcoins themselves, the actions of "whales", rumors/news, etc.  It's crazy.  Speaking to Siacoin itself, it is an older and more established coin, and lately it feels like most people are investing in the newer coins for a greater chance at big profits.

Just my 2 cents.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mcampbell on October 04, 2017, 02:58:27 PM
Just found a great video on Bloomberg where they interview a hedge fund guy and how he is exploring Bitcoin and Ethereum, he has one of the most positive but most compelling talks on the subject. https://youtu.be/DozrRY2NENU


Sent from my iPhone using Tapatalk
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: powskier on October 04, 2017, 03:53:13 PM
The OP was pretty clear that this was not a thread to debate if crypto currency is legit/real/of value/etc. But to discuss crypto portfolios, unfortunately it has been hijacked pretty hard.
Can you all stop now?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 04, 2017, 04:09:45 PM
The OP was pretty clear that this was not a thread to debate if crypto currency is legit/real/of value/etc. But to discuss crypto portfolios, unfortunately it has been hijacked pretty hard.
Can you all stop now?

Exactly.

If you don't agree with investing in this "asset class", then feel free to argue over PM's with eachother.

This thread is for those who invest and/or plan to invest in order to reap the benefits of this volatility.

EXAMPLE:
Today on 10/04/2017, 1 Monero is $91, 1 Ether is $292, 1 Lisk is $5.45, 1 LINK is $.39 and 1 ARDR is $.16.

I will go ahead and bump this in 90 days to show you that there is rewards to be had by investing in this area.

For transparency sake, the market will be facing a decent downturn staring as soon as now (or as late as a few weeks) and will go until mid/late November. This is due to Political and Technological disagreements among the Bitcoin community. If you have been considering joining this market, the time will be then. As always, DCA into positions.

Cheers
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on October 05, 2017, 07:34:57 AM
The OP was pretty clear that this was not a thread to debate if crypto currency is legit/real/of value/etc. But to discuss crypto portfolios, unfortunately it has been hijacked pretty hard.
Can you all stop now?

The name should probably be changed then . . . currently it reads "Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion".  You're suggesting that something like "Re: OFFICIAL: Blockchain / Crypto-Currency - Only Promotion And Good Words Allowed" would be more apt.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 06, 2017, 02:32:18 AM
- Banker friendly coin: XRP
I personally do not like the thought of centralized coins, but this is a hedge more then anything that banks like control and will start using this platform.

Limiting myself to the terms of the thread: going by the announcement from the six-bank consortium, financial institutions are going to skip the middleman and build their own cryptocurrency rather than use someone else's.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 06, 2017, 05:35:52 AM
- Banker friendly coin: XRP
I personally do not like the thought of centralized coins, but this is a hedge more then anything that banks like control and will start using this platform.

Limiting myself to the terms of the thread: going by the announcement from the six-bank consortium, financial institutions are going to skip the middleman and build their own cryptocurrency rather than use someone else's.

I don't particularly like Ripple/XRP, but I see your six bank consortium that has said they may develop their own blockchain in the future but haven't actually done so yet and raise you 75 banks which are already working with Ripple for settling international and domestic payments.*

Note that this is not an argument for people to buy XRP for appreciation. Ripple could become wildly successful as displacing between-bank international payments by being cheaper and faster than SWIFT and it wouldn't necessarily mean that the price of XRP would appreciate dramatically.

*Source: https://finance.yahoo.com/news/75-banks-now-ripples-blockchain-network-162939601.html
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: hualon on October 06, 2017, 06:41:14 AM
In the spirit of the original post I thought I'd share a bit of my personal experience with crypto for those interested.

I've been doing the Mustachian method of index funds, slow-and-steady, etc. for 20 years. It has served me well. I kept a couple percent of my money reserved in cash for opportunities and then put a small percentage of that money into active investing (we're talking at most $2000 or so) mainly for entertainment. Trading individual stocks got me more active in something I enjoy so I played with it in a low-risk manner for a while. Good, wholesome, nerdy fun.

I learned about Bitcoin back when it was around $200 or so and bought $5 worth on a paper wallet from a friend. I just wanted to know how the technology worked, really. I set it aside and then learned more, bought a little more, etc. I went to a Crypto conference in August, 2014 and listened to a very compelling talk given by Vitalik Buterin about this new thing he was building called Ethereum and I immediately saw potential - if he and the team were able to pull it off, of course.

I put a few hundred dollars worth of my speculative "play" investment money into it and promptly forgot about it for a year and a half or so. I didn't even realize that people were trading it in any serious way until I looked up Ethereum and my $0.30 Ethers were trading at over $1 each. Crazy ROI especially for something so speculative. It went up so fast after that that I didn't know what to do. I sold enough to recoup my investment and to realize a little profit and let the rest ride. It was all safe money now.

Fast forward to a few months ago and what was left had gone up to be worth hundreds of thousands of dollars. It went from "price of a new car" to "price of a decent house" so quickly that I was gobsmacked. My wife and I decided to get out while the getting was great and realized enough gains to pay off our house! We're in our late 30s and there's enough left to buy another house with... all from a speculative bet 3 years ago.

I don't want to get anyone's hopes up nor do I want to proclaim that I'm some kind of investing genius. I won the lottery and I know it. This was a once in a lifetime speculation done entirely with money that was outside of our normal investment plan. Had I lost the few hundred dollars, fine - not a huge setback.

As to current holdings, I remain fascinated by the space. I hold Ethereum (inside and outside of an IRA), a little Bitcoin inside an IRA, and a few smaller startups (LINK, QTUM, NEO, MTH, OMG) that I managed to purchase at their ICO or close to it. Some are up, some are down. I doubt that I'll strike oil again like I did with ETH though.

Now I'm trying to reconcile just how far out of whack my overall asset allocation is. I never intended for crypto to be such a large portion of my portfolio and I'm trying to slowly divest. The tax situation is such that I want to do it slowly because of the capital gains. Come January 1st I'll be liquidating some more and moving it into good 'ol VTSAX. :)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: mustache you a question on October 06, 2017, 06:59:13 AM
A piece of investing advice that I read that made sense to me was to just put 1% of your net worth into bitcoin or etherium.  It's a gamble, but basically a hedge in case bitcoin is the disrupting force some people think it will be.  I just recently did this, if it goes to zero it's ok, I'm not risking a ton.  But if it explodes then it could pay off nicely. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: PDXTabs on October 09, 2017, 09:10:00 AM
When I want to sell or buy something, I could care less what I use to make that transaction as long as it's easy, relatively secure, and that the currency is stable in value and accepted pretty much everywhere. I have no interest in whether or not that's dollars, bitcoins, dirty socks, you name it. I'm agnostic on the specific currency as long as it has those basic attributes.

As of right now, none of that applies, and the "success" of crypto looks more to me like failure, since none of them have managed to become commonly used or even stable in value. I have no interest in buying something that has no use and is only transacted with itself (I don't go out and buy a bunch of dollars to stick under my bed either, and those at least are easy to use for buying stuff I actually want).

I live in the US (own ETH and BTC) and agree with you that they are not yet mature currencies. However, I was talking to a friend from Vietnam and he told me that no one in Vietnam trusts the value of their currency (the dong) and that today many transactions are carried out with gold. For a place like that ETH or BTC could be way more convenient and secure than carrying around enough gold to buy a house (literally).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 09, 2017, 10:39:18 AM
In the spirit of the original post I thought I'd share a bit of my personal experience with crypto for those interested.

I've been doing the Mustachian method of index funds, slow-and-steady, etc. for 20 years. It has served me well. I kept a couple percent of my money reserved in cash for opportunities and then put a small percentage of that money into active investing (we're talking at most $2000 or so) mainly for entertainment. Trading individual stocks got me more active in something I enjoy so I played with it in a low-risk manner for a while. Good, wholesome, nerdy fun.

I learned about Bitcoin back when it was around $200 or so and bought $5 worth on a paper wallet from a friend. I just wanted to know how the technology worked, really. I set it aside and then learned more, bought a little more, etc. I went to a Crypto conference in August, 2014 and listened to a very compelling talk given by Vitalik Buterin about this new thing he was building called Ethereum and I immediately saw potential - if he and the team were able to pull it off, of course.

I put a few hundred dollars worth of my speculative "play" investment money into it and promptly forgot about it for a year and a half or so. I didn't even realize that people were trading it in any serious way until I looked up Ethereum and my $0.30 Ethers were trading at over $1 each. Crazy ROI especially for something so speculative. It went up so fast after that that I didn't know what to do. I sold enough to recoup my investment and to realize a little profit and let the rest ride. It was all safe money now.

Fast forward to a few months ago and what was left had gone up to be worth hundreds of thousands of dollars. It went from "price of a new car" to "price of a decent house" so quickly that I was gobsmacked. My wife and I decided to get out while the getting was great and realized enough gains to pay off our house! We're in our late 30s and there's enough left to buy another house with... all from a speculative bet 3 years ago.

I don't want to get anyone's hopes up nor do I want to proclaim that I'm some kind of investing genius. I won the lottery and I know it. This was a once in a lifetime speculation done entirely with money that was outside of our normal investment plan. Had I lost the few hundred dollars, fine - not a huge setback.

As to current holdings, I remain fascinated by the space. I hold Ethereum (inside and outside of an IRA), a little Bitcoin inside an IRA, and a few smaller startups (LINK, QTUM, NEO, MTH, OMG) that I managed to purchase at their ICO or close to it. Some are up, some are down. I doubt that I'll strike oil again like I did with ETH though.

Now I'm trying to reconcile just how far out of whack my overall asset allocation is. I never intended for crypto to be such a large portion of my portfolio and I'm trying to slowly divest. The tax situation is such that I want to do it slowly because of the capital gains. Come January 1st I'll be liquidating some more and moving it into good 'ol VTSAX. :)


Beautiful, what a great story!!!

I believe there will still be more stories like these to come. The institutional money is just starting to trickle in, I fully expect this sphere to get to at least 1T market cap in the near/mid term.

Best of luck to everyone, take as much risk as you feel necessary.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: talltexan on October 09, 2017, 12:05:48 PM
So if I want to short crypto currency, should I be long in bank stocks? Credit Stocks? Paypal?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 09, 2017, 02:12:38 PM
You can short crypto directly, a number of the exchanges, such as Bitfinix and Kraken allow short selling.

Although there are obvious concerns about counterparty risk since the people you'd be dealing with would be heavily invested in crypto. ;-)

Right now bitcoin cryptocurrency in general is interesting because it might disrupt the business models of companies like Western Union or the major credit card companies. But if that disruption fails to materialize it won't cause a big rebound in the share prices of those companies because right now the potential disruption isn't "real" enough yet to cause any downward pressure on their share prices.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Bicycle_B on October 09, 2017, 02:32:50 PM
Hualon, thanks for sharing your story so straightforwardly.  Glad your experiments paid off!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 09, 2017, 05:33:54 PM
Here are some prime examples of why you don't short the greatest bull market the world has ever seen.

https://twitter.com/bitmexrekt?lang=en

Yes, those are actual shorts / longs...yes, I know it hurts your heart.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: powskier on October 10, 2017, 12:47:16 AM
I only have a small amount of play money invested. Invested in Ripple partly as a hedge against the other cryptos. Many crypto gurus dismiss it because of it's centralized nature. Purchased at 0.17 was at 0.29 yesterday. the potential to replace SWIFT is also there.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: powskier on October 10, 2017, 12:52:59 AM
The OP was pretty clear that this was not a thread to debate if crypto currency is legit/real/of value/etc. But to discuss crypto portfolios, unfortunately it has been hijacked pretty hard.
Can you all stop now?

The name should probably be changed then . . . currently it reads "Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion".  You're suggesting that something like "Re: OFFICIAL: Blockchain / Crypto-Currency - Only Promotion And Good Words Allowed" would be more apt.
I am not suggesting anything other than the OP's initial post. Personally I love debating the pros/cons/hype/potentials/scams/ etc just not here on this thread.
From the very first sentence in the first post: "This thread is not to discuss if crypto-currencies are good, bad, high risk, low risk...etc but simply to post your current/future holdings. This should start a positive discussion that will leave us all smarter and more wealthy. Please do not post here with negative generalized and non-factual based statements or opinions."
Someone starts a thread with a specific request, it seems pretty straightforward to honor it, no?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 12, 2017, 01:00:15 PM
New day, new all-time high.

Scared money don't make money!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 12, 2017, 01:13:17 PM
New day, new all-time high.

Scared money don't make money!

Yup, it's been a good week for bitcoin! The last day or so just shows how much dominance bitcoin has over the rest of the market. It now has a market cap of over $88 billion which is over 50% of the total crypto market. Much of the rest of the crypto market is down while bitcoin is way up. Bitcoin is here to stay.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 12, 2017, 04:30:22 PM
BTC over $5200! This little crytpo thing is 3% of my total portfolio but 90% of the gains. Pretty insane. Triggered another rebalance.

Man, if you could just chill and re-balance in a year you'd be able to retire a few years early :}
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 12, 2017, 11:11:47 PM
Just a heads up. If you haven't already, I recommend you research omg (omisego).

I was originally in btc then moved into eth, and am now diversified into omg. I am aware of various other crypto and have researched them (neo, dash, iota, zec, ark, link, knc, etc), but I believe omg to be the strongest contender despite the omg blockchain not yet existing, as compared to the current top 12 in coinmarketcap.com. Omg is speculative and obviously has risk.

Omg will be a proof-of-stake blockchain, functioning as an agnostic payment network, dex (decentralized exchange), ewallet, etc.

If anyone has questions, I'll share what I know.

I'm not giving investment advice. Just letting people know about a possible opportunity. Do your due diligence. If you are unclear about omg or have doubts, stay away from it.   
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 12, 2017, 11:37:08 PM
I believe omg to be the strongest contender despite the omg blockchain not yet existing, as compared to the current top 12 in coinmarketcap.com.

....

If anyone has questions, I'll share what I know.

I guess my question would be: why do you think that? What's the elevator pitch for why you think people are likely to adopt omg?

(The equivalents for other coins: IOTA -- potential for lots and lots of micropayments, ZEC -- best for anonymity instead of pseudonymity, DASH -- much faster transactions*, ETH -- more complicated transactions through smart contracts.)

*Although this comparative advantage is going away with the lightening networks on BTC and LTC.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 12, 2017, 11:55:04 PM
Just to be clear, I'm a longterm holder of eth as well.

I think that much of the value for those crypto comes from the fact that they are existing and functioning blockchains.

Iota is currently centralized and using a coordinator to springboard the network until it achieves enough network effect where it no longer needs to rely on the coordinator. I'm not convinced that it will be able to effectively remove the coordinator. In addition, there is the controversy surrounding it regarding cryptographic vulnerabilities.

The zksnark zero-proof in zec is planned for use in eth, and I don't see why it won't be adapted into omg.

From an empirical perspective, eth has a more foundational infrastructure, greater developer mindshare, and superior ecosystem over dash.

As for omg, once it goes live, it can integrate into an existing payment network infrastucture and allow various payment networks to transact with each other. Exclusive loyalty or reward programs, in-game currencies, etc, have the potential to be unlocked and transacted as value into a greater network. Also, an advantage omg will have over many of the existing blockchains is that a standardized onboarding cash in/out process is expected to be unveiled before year end; instead of relying on other crypto to get it, people will directly be able to trade for it with cash at supporting establishments (possibly convenience stores). Merchants and consumers will have a reason to use omg (reduced transactional barriers, lower overhead costs, trustless trust standard, etc).

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: kivex on October 13, 2017, 12:30:38 AM
Being MMM, low cost passive index funds are well proven. Applying the same to crypto currencies is what the Crypto 20 (C20) token provides. The fund contains the top 20 coins, is autonomous, and rebalanced weekly.

https://crypto20.com

If you feel that crypto will grow over time then this is a great way to have exposure to the top 20 coins in the market.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 13, 2017, 06:06:25 AM
Being MMM, low cost passive index funds are well proven. Applying the same to crypto currencies is what the Crypto 20 (C20) token provides. The fund contains the top 20 coins, is autonomous, and rebalanced weekly.

https://crypto20.com

If you feel that crypto will grow over time then this is a great way to have exposure to the top 20 coins in the market.

I tried getting into Crypto20 last weekend when it first opened the ICO, but it looks like they aren't opening the ICO to US residents/citizens. Likely because of the regulations with how the SEC plans to treat ICOs as securities. So if you're in the US, you're out of luck. I'm hoping that once the ICO goes live that the token start being traded on some other exchanges that aren't as stringent with the KYC laws. In the meantime, you can trade the BTWTY crypto index on the OpenLedger DEX.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 13, 2017, 11:36:46 AM
Just to be clear, I'm a longterm holder of eth as well.

I think that much of the value for those crypto comes from the fact that they are existing and functioning blockchains.

Iota is currently centralized and using a coordinator to springboard the network until it achieves enough network effect where it no longer needs to rely on the coordinator. I'm not convinced that it will be able to effectively remove the coordinator. In addition, there is the controversy surrounding it regarding cryptographic vulnerabilities.

The zksnark zero-proof in zec is planned for use in eth, and I don't see why it won't be adapted into omg.

From an empirical perspective, eth has a more foundational infrastructure, greater developer mindshare, and superior ecosystem over dash.

As for omg, once it goes live, it can integrate into an existing payment network infrastucture and allow various payment networks to transact with each other. Exclusive loyalty or reward programs, in-game currencies, etc, have the potential to be unlocked and transacted as value into a greater network. Also, an advantage omg will have over many of the existing blockchains is that a standardized onboarding cash in/out process is expected to be unveiled before year end; instead of relying on other crypto to get it, people will directly be able to trade for it with cash at supporting establishments (possibly convenience stores). Merchants and consumers will have a reason to use omg (reduced transactional barriers, lower overhead costs, trustless trust standard, etc).

Furthermore, Omise is already a well established company who is growing rapidly. They even won a large "startup company of the year award" recently. In addition, they just landed a deal with Mc. Donalds and are in talks with collaborating with Google for something.

OMG will be huge, I have about 2% of my total crypto portfolio in it and expect great returns over the next few years.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 13, 2017, 11:48:44 AM
So if I'm reading correctly the elevator pitch is that omg (once it is up and running) should be much easier to transfer into and out of (either from normal currencies, other cryptocurrencies, or game/reward program points) without requiring the use of 3rd party exchanges?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 13, 2017, 11:53:57 AM
So if I'm reading correctly the elevator pitch is that omg (once it is up and running) should be much easier to transfer into and out of (either from normal currencies, other cryptocurrencies, or game/reward program points) without requiring the use of 3rd party exchanges?

That's part of it, they want to create a decentralized exchange for fiat, more information still needs to be released on how they will do this.

A big part to mention is that this will be the first project built on PLASMA: A love child between Poon (lightning network creator) and Vitalik (Ethereum creator).

YUGE
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 13, 2017, 12:35:04 PM
OMG will be huge, I have about 2% of my total crypto portfolio in it and expect great returns over the next few years.

What ethereum wallet are you using to store your OMG tokens?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 13, 2017, 02:41:29 PM
What ethereum wallet are you using to store your OMG tokens?

You can store it to any public address for which you control the private key.

As a security precaution, many people would recommend a hardware wallet such as nano s ledger.



 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: advanced on October 18, 2017, 11:19:46 AM
my current portfolio

AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 19, 2017, 01:55:19 PM
my current portfolio

AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT

Interesting, most of your choices are platforms built on Ethereum.

What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?
Title: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: kivex on October 19, 2017, 06:29:23 PM
my current portfolio

AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT

Interesting, most of your choices are platforms built on Ethereum.

What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?

Or literally holding an index of the top 20 crypto currencies using C20 - https://crypto20.com

A good overview of C20 with links to YouTube interviews -
https://cryptocurrencyinvesting.news/crypto20-offers-peace-of-mind-with-the-first-crypto-index-fund/
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 20, 2017, 10:56:00 AM
my current portfolio

AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT

Interesting, most of your choices are platforms built on Ethereum.

What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?

Touching on this, there are alot of shilling, misinformation, and pump-and-dumps in crypto. Projects get intensely hyped and made out to be extremely promising.

Most of these projects are purely whitepaper! They have no product. The idea-makers have no inkling of the pitfalls and challenges of the business world or getting a product to market and adoption. Even if they have code to show for a product, or actually launch a product, it's not a guarantee of success. There is also a very subtle form of scamming, where the ico projects put on the front of actively working on a product and releasing continuous updates, knowing the product will never pick up momentum.

If you are in the cryptoworld, be very conservative where you put your money.   



 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 20, 2017, 01:42:40 PM
my current portfolio

AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT

Interesting, most of your choices are platforms built on Ethereum.

What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?

Touching on this, there are alot of shilling, misinformation, and pump-and-dumps in crypto. Projects get intensely hyped and made out to be extremely promising.

Most of these projects are purely whitepaper! They have no product. The idea-makers have no inkling of the pitfalls and challenges of the business world or getting a product to market and adoption. Even if they have code to show for a product, or actually launch a product, it's not a guarantee of success. There is also a very subtle form of scamming, where the ico projects put on the front of actively working on a product and releasing continuous updates, knowing the product will never pick up momentum.

If you are in the cryptoworld, be very conservative where you put your money.

This is why I am a firm believer in Ethereum. It's literally the back-bone of the future landscape of public Blockchain development.

my current portfolio

AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT

Interesting, most of your choices are platforms built on Ethereum.

What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?

Or literally holding an index of the top 20 crypto currencies using C20 - https://crypto20.com

A good overview of C20 with links to YouTube interviews -
https://cryptocurrencyinvesting.news/crypto20-offers-peace-of-mind-with-the-first-crypto-index-fund/

Thanks for the input man. Can you please avoid posting that anymore? I don't know your affiliation but mentioning it twice in such a short amount of time is coming off as self seeking. If not, I apologize but I just wanted to get this out in the clear.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: kivex on October 20, 2017, 02:41:15 PM
Thanks for the input man. Can you please avoid posting that anymore? I don't know your affiliation but mentioning it twice in such a short amount of time is coming off as self seeking. If not, I apologize but I just wanted to get this out in the clear.

My apologies. Rereading this thread, my posts do come off as promotion - wasn't my intention. I have no affiliation other than having participated in their ICO. Being MMM, the discussion of which individual crypto currencies will perform well is akin to stock picking, and runs against the norm on this forum which favours index investing. I wanted to let others know that the ability to invest in a crypto index is available.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: surfhb on October 20, 2017, 08:14:10 PM
Oh man.    This is a millennial train wreck.   

You guys are going to lose your asses.   
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 20, 2017, 10:40:00 PM
The peeps selling the "index of crypto" stuff (and the ones selling mining rigs) will do fine. Levi Strauss, baby...

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: powskier on October 21, 2017, 12:57:19 AM
Oh man.    This is a millennial train wreck.   

You guys are going to lose your asses.   

Many of them have already made more money than all of us Gen Xers combined. Just because you don't understand it, doesn't mean it's necessarily a train wreck.

$100 of BTC 7 years ago is $140 million and then some today.

I'm up about 75% this year with some play money.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Jeferson on October 22, 2017, 11:47:35 AM
Bitcoin really hitting new highs, currently at 5963.01 dollars per unit, looking for a spot to buy few coins, but the price is too high right now.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on October 22, 2017, 06:25:16 PM
Bitcoin really hitting new highs, currently at 5963.01 dollars per unit, looking for a spot to buy few coins, but the price is too high right now.

Same, I sold a week ago when it hit $7300 CDN, i'll start getting back in when values come back down a little
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: surfhb on October 22, 2017, 07:27:17 PM
Crypto currencies are to investing what a brand new GM truck is to Mustachians.   

Isn't this the opposite of what this blog preaches ?     Do any of you ever experienced an extended bear market?   Where you lost hundreds of thousands in equity value in a matter of months? 

 If so, do you feel comfortable with things like bitcoin?     Yes?  How?

I want to hear from the 40+ crowd who have experienced these kinds of events.   

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on October 22, 2017, 09:37:12 PM
Crypto currencies are to investing what a brand new GM truck is to Mustachians.   

Isn't this the opposite of what this blog preaches ?     Do any of you ever experienced an extended bear market?   Where you lost hundreds of thousands in equity value in a matter of months? 

 If so, do you feel comfortable with things like bitcoin?     Yes?  How?

I want to hear from the 40+ crowd who have experienced these kinds of events.   

A better analogy might be buying a lotto ticket.  I don't know how anyone can bet large amounts on bitcoin, for me its 1% of my investments
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 23, 2017, 07:30:08 AM
Crypto currencies are to investing what a brand new GM truck is to Mustachians.   

Isn't this the opposite of what this blog preaches ?     Do any of you ever experienced an extended bear market?   Where you lost hundreds of thousands in equity value in a matter of months? 

 If so, do you feel comfortable with things like bitcoin?     Yes?  How?

I want to hear from the 40+ crowd who have experienced these kinds of events.   

Can you further explain your analogy? The comparison you make to a GM truck doesn't really make sense at all.

Being "mustachian" is more about living a simple frugal life to achieve a high savings rate and become financially independent than it is about any one particular investment strategy. Even Mr. Money Mustache has invested in high risk/high reward investments.

So I don't think being "mustachian" excludes one from investing in crypto-currencies.

I feel very comfortable investing in bitcoin for numerous reasons.

1) It isn't correlated with any other investment class and it has so far shown itself to be disassociated with most other markets. Therefore it is a good investment option for diversifying against my other index funds.

2) I work in the technology field (Information Security) and I understand the technology of bitcoin deeply. Therefore, investing in a technology that I firmly believe has a bright future makes sense to me. I think it is one of the greatest technological achievements since the Internet. For the first time, we can now create something that is both digital and scarce and can't be copied.

3) I invested in bitcoin early on and therefore my investment has seen tremendous growth over the last several years. Even if bitcoin experiences an extreme drop from today's value or an extensive bear market for the foreseeable future, I will has still made more money had I just invested my money in any other traditional investment option.

4) I am extremely bearish on current traditional financial systems and think that we're in one of the largest debt bubbles ever. Until Bitcoin came along, there was really no way to hedge against something like this as just about ever other asset class is either manipulated and/or intertwined with everything else that makes up our economy. Bitcoin's true value won't be understood until we experience another financial crisis. While I continue to invest in my traditional index funds and max out all my pre-tax investment options, Bitcoin provides me a hedge against those in the event something horrible happens.

5) Bitcoin is extremely liquid and fungible, unlike many retirement investment accounts. This is a great benefit to someone who is planning to retire early, which is something that goes against society's norms. While I plan on retiring in my early 40's, sometimes life can throw a curve ball, so it is nice to have a decent chunk of money that is for retirement, but is available any time of day that can be accessed and used in any way I see fit. There aren't many good investments that I can be long on, while still having the ability to access it at any time without restrictions or penalties.

6) If crypto-currencies are seen as a "millennial" investment, wouldn't it make sense that I invest in something that has a growing number of young investors in the future investing in something that has a positive feedback loop relative to its adoption? If most millennials don't understand why gold is a store of value and yet are fully willing to adopt Bitcoin as such, then it makes sense that Bitcoin would have a stronger future market as those millennials begin choosing where to put their money.

I can go on digging further into why I think Bitcoin is a good investment option, but there are just some of the reasons why I choose to put some of my money in it and why it shouldn't just be seen as some obscure fad.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: talltexan on October 23, 2017, 09:04:00 AM
Lifeanon269-

Have you purchased a tangible good or service with your bitcoin?

I'd like to know if you've used it for its intended purpose, or if it's only an investment vehicle for you.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 23, 2017, 10:15:25 AM
Lifeanon269-

Have you purchased a tangible good or service with your bitcoin?

I'd like to know if you've used it for its intended purpose, or if it's only an investment vehicle for you.

All my spending money is in Bitcoin (I've stated this in past posts here as well, so I'm not just saying this in response to you). I'd rather have my spending money in Bitcoin as opposed to USD as this allows me to further increase my savings. If my spending money goes up 10% one month, then that allows me to put more into savings than I otherwise would have. Its volatility isn't as painful when it comes to my spending money since 1) I don't spend much each month and 2) my monthly spending is spread out over the course of the month, therefore Bitcoin's price volatility evens out for all my expenditures.

In case you're wondering, I have a Bitcoin debit card that allows me to make purchases using Bitcoin. My money is stored in Bitcoin until the time of the transaction where it is converted to USD without any transaction fee. This is what I referred to above where I said that Bitcoin is extremely liquid. I can have my money in Bitcoin and at any moment, I can spend it. I also do make purchases directly with Bitcoin on a few websites that support it (Amazon purchases through Purse, Overstock, NewEgg, etc).

With that said, I would like to question why the question was posed in the first place. Were you questioning its use as a currency? Its current adoption level matches its current merchant acceptance. That is to say it is very low. The reason why it has been such a good investment hinges solely on the fact that it is such a young market. At the point at which we see its value as currency being realized (ie, merchant acceptance and widespread use), its value as an investment will have diminished. Irregardless of any of this, however, its value as a store of value will always remain since that is mostly dependent upon the soundness and stability of the technology itself.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on October 23, 2017, 11:09:19 AM
All my spending money is in Bitcoin (I've stated this in past posts here as well, so I'm not just saying this in response to you). I'd rather have my spending money in Bitcoin as opposed to USD as this allows me to further increase my savings.

It certainly provides some protection from making mindless purchases.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: talltexan on October 23, 2017, 12:04:42 PM
Lifeanon269-

Have you purchased a tangible good or service with your bitcoin?

I'd like to know if you've used it for its intended purpose, or if it's only an investment vehicle for you.

All my spending money is in Bitcoin (I've stated this in past posts here as well, so I'm not just saying this in response to you). I'd rather have my spending money in Bitcoin as opposed to USD as this allows me to further increase my savings. If my spending money goes up 10% one month, then that allows me to put more into savings than I otherwise would have. Its volatility isn't as painful when it comes to my spending money since 1) I don't spend much each month and 2) my monthly spending is spread out over the course of the month, therefore Bitcoin's price volatility evens out for all my expenditures.

In case you're wondering, I have a Bitcoin debit card that allows me to make purchases using Bitcoin. My money is stored in Bitcoin until the time of the transaction where it is converted to USD without any transaction fee. This is what I referred to above where I said that Bitcoin is extremely liquid. I can have my money in Bitcoin and at any moment, I can spend it. I also do make purchases directly with Bitcoin on a few websites that support it (Amazon purchases through Purse, Overstock, NewEgg, etc).

With that said, I would like to question why the question was posed in the first place. Were you questioning its use as a currency? Its current adoption level matches its current merchant acceptance. That is to say it is very low. The reason why it has been such a good investment hinges solely on the fact that it is such a young market. At the point at which we see its value as currency being realized (ie, merchant acceptance and widespread use), its value as an investment will have diminished. Irregardless of any of this, however, its value as a store of value will always remain since that is mostly dependent upon the soundness and stability of the technology itself.

Your debit card sounds absolutely amazing! I apologize for being so late to the discussion that I hadn't properly read other posts of yours.

Indeed I am trying to figure out whether Bitcoin is a currency, or if the emphasis on investing through it has transformed it more into a commodity a la gold.

My big concern about websites like overstock is that they still quote the prices in $$ until the very end, then they give you the option to pay via Bitcoin. I'm worried that until we start thinking about prices totally within Bitcoin (and you sound like you've built the infrastructure--personally--to do this), it won't be a currency, but more a medium of exchange will be something more akin to payment processing that credit cards are currently providing, rather than being something like the Euro.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: sherr on October 23, 2017, 12:21:26 PM
Irregardless of any of this, however, its value as a store of value will always remain since that is mostly dependent upon the soundness and stability of the technology itself.

It's quotes like this that make me extremely wary of cryptocurrencies. That's simply untrue. The only "value" that cryptocurrencies have as a store of value is completely and totally dependent on other people being willing to trade goods / services / other currencies for them. Same as anything else. The technology can be completely sound and stable, but if no one wants to buy your bitcoin then it has lost every bit of its value. Will that happen any time soon? I don't know, but "bitcoin has no real value so it's real value is potentially INFINITE" type quotes certainly don't make me want to trade my USD for your bitcoin.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 23, 2017, 12:45:30 PM
Crypto currencies are to investing what a brand new GM truck is to Mustachians.   

Isn't this the opposite of what this blog preaches ?     Do any of you ever experienced an extended bear market?   Where you lost hundreds of thousands in equity value in a matter of months? 

 If so, do you feel comfortable with things like bitcoin?     Yes?  How?

I want to hear from the 40+ crowd who have experienced these kinds of events.   

Can you further explain your analogy? The comparison you make to a GM truck doesn't really make sense at all.

Being "mustachian" is more about living a simple frugal life to achieve a high savings rate and become financially independent than it is about any one particular investment strategy. Even Mr. Money Mustache has invested in high risk/high reward investments.

So I don't think being "mustachian" excludes one from investing in crypto-currencies.

I feel very comfortable investing in bitcoin for numerous reasons.

1) It isn't correlated with any other investment class and it has so far shown itself to be disassociated with most other markets. Therefore it is a good investment option for diversifying against my other index funds.

2) I work in the technology field (Information Security) and I understand the technology of bitcoin deeply. Therefore, investing in a technology that I firmly believe has a bright future makes sense to me. I think it is one of the greatest technological achievements since the Internet. For the first time, we can now create something that is both digital and scarce and can't be copied.

3) I invested in bitcoin early on and therefore my investment has seen tremendous growth over the last several years. Even if bitcoin experiences an extreme drop from today's value or an extensive bear market for the foreseeable future, I will has still made more money had I just invested my money in any other traditional investment option.

4) I am extremely bearish on current traditional financial systems and think that we're in one of the largest debt bubbles ever. Until Bitcoin came along, there was really no way to hedge against something like this as just about ever other asset class is either manipulated and/or intertwined with everything else that makes up our economy. Bitcoin's true value won't be understood until we experience another financial crisis. While I continue to invest in my traditional index funds and max out all my pre-tax investment options, Bitcoin provides me a hedge against those in the event something horrible happens.

5) Bitcoin is extremely liquid and fungible, unlike many retirement investment accounts. This is a great benefit to someone who is planning to retire early, which is something that goes against society's norms. While I plan on retiring in my early 40's, sometimes life can throw a curve ball, so it is nice to have a decent chunk of money that is for retirement, but is available any time of day that can be accessed and used in any way I see fit. There aren't many good investments that I can be long on, while still having the ability to access it at any time without restrictions or penalties.

6) If crypto-currencies are seen as a "millennial" investment, wouldn't it make sense that I invest in something that has a growing number of young investors in the future investing in something that has a positive feedback loop relative to its adoption? If most millennials don't understand why gold is a store of value and yet are fully willing to adopt Bitcoin as such, then it makes sense that Bitcoin would have a stronger future market as those millennials begin choosing where to put their money.

I can go on digging further into why I think Bitcoin is a good investment option, but there are just some of the reasons why I choose to put some of my money in it and why it shouldn't just be seen as some obscure fad.

Very well said, my friend! I am excited to hear a reply from SurfHB.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jmecklenborg on October 23, 2017, 12:59:04 PM
I disagree that point 3 is of any advantage, and it is more likely a disadvantage.  Buying bitcoin is not an investment in "blockchain", it is rolling the dice with this nebulous thing with minimal practical use called bitcoin.  As I have stated previously, blockchain might prove very useful to traditional banks so far as improving security and reducing the need for expensive IT security staff.  One of my friends from high school is head of security for a company everyone here has heard of.  He's a nutty dude.  Executives don't like those kinds of guys but they are a necessary evil, from their perspective. 

I remember when my dad was put in charge of his company's Y2K effort.  He has no background in computers but was stuck managing a small gang of dungeons & dragons dudes who milked the clock for two years leading up to the anticlimactic event.  He couldn't wait to lay their goofy asses off.  I'd have to ask him but I don't doubt that he had them escorted out of the building before MLK Day, 2000.   

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 23, 2017, 01:04:10 PM
Irregardless of any of this, however, its value as a store of value will always remain since that is mostly dependent upon the soundness and stability of the technology itself.

It's quotes like this that make me extremely wary of cryptocurrencies. That's simply untrue. The only "value" that cryptocurrencies have as a store of value is completely and totally dependent on other people being willing to trade goods / services / other currencies for them. Same as anything else. The technology can be completely sound and stable, but if no one wants to buy your bitcoin then it has lost every bit of its value. Will that happen any time soon? I don't know, but "bitcoin has no real value so it's real value is potentially INFINITE" type quotes certainly don't make me want to trade my USD for your bitcoin.

I knew someone was going to respond with a post like this quoting that exact sentence. Allow me to explain further.

I wasn't suggesting that Bitcoin's value is "infinite". The reason why I say its store of value is tied to how sound the technology is because of the fact that those putting their money in it looking for their money to hold value are doing so on the premise that the network will continue to operate as it does today without any problems or downtime.

If the Bitcoin network experiences downtime or failures or was found not to be as secure as it is against any form of attack, then people would not be willing to store their money in it. First and foremost, it is because Bitcoin is such a sturdy protocol that people feel safe storing their money in it. So long as there are people who continue to feel that Bitcoin is safe from a technological perspective, then there will be people who are looking to buy it. Like you said, any asset's value comes from those who are willing to trade it. The longer the Bitcoin network is online and secure, the harder it will be for people to ignore its value as a secure asset.

The argument you make against Bitcoin above is the same "inherent value" argument against bitcoin that is erroneously often made, you just worded it differently. You can claim that Bitcoin has no inherent value, but I beg to differ. Bitcoin's inherent value comes from the fact that it is an extremely secure and un-manipulated currency who's technology is based on sound mathematical cryptography that has been developed over the course of 40 years. The longer the network remains online, the more and more this holds true.

Essentially what you're suggesting is that all the people who today feel that bitcoin is a safe and secure protocol and are willing to put their hard earned cash in it will someday cease to feel it is a safe and secure protocol...and thus its value would plummet. In order for that to happen, then the network would need to experience some type of hiccup or compromise. In that case, the network would've failed and I'd fully expect its value to drop accordingly (because the technology failed). However, should Bitcoin continue to operate soundly as it does today, then I'd expect that more and more people will continue to see that Bitcoin as a protocol does have value. Outside a worldwide clamp down by governments (even then I do expect Bitcoin to resist such a scenario), then I firmly believe Bitcoin's value is directly correlative to the soundness of the technology itself.

For perspective, even if Bitcoin's market capitalization remained constant from here on out (about $100 billion), then its future value in the year ~2140 when all 21 million Bitcoins are mined would still be about $4760. That's a decline of about 18% over the course of about 123 years or about .146% decline annually. Compared to the USD which declines over 3% annually (more so recently), that's a tremendous store of value comparatively for a currency. That means that even just modest growths in the Bitcoin market over the next several decades will continue to yield Bitcoin being a good store of value for one's money.

Also, my above statement was in regards to the fact that this is all true whether or not Bitcoin is ever used as an everyday currency or not. Bitcoin does not need to be used as an everyday currency for people to realize that it still has value because of the security it provides as a store of value.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 23, 2017, 01:16:47 PM
Your debit card sounds absolutely amazing! I apologize for being so late to the discussion that I hadn't properly read other posts of yours.

Indeed I am trying to figure out whether Bitcoin is a currency, or if the emphasis on investing through it has transformed it more into a commodity a la gold.

My big concern about websites like overstock is that they still quote the prices in $$ until the very end, then they give you the option to pay via Bitcoin. I'm worried that until we start thinking about prices totally within Bitcoin (and you sound like you've built the infrastructure--personally--to do this), it won't be a currency, but more a medium of exchange will be something more akin to payment processing that credit cards are currently providing, rather than being something like the Euro.

Until Bitcoin's volatility declines, then I fully expect businesses who transact directly in bitcoin to utilize a more stable asset (USD) for pricing their goods. I don't see this as a good or bad thing, just as something that is to be expected. There are even crypto-currencies that are developed with price-stability in mind to allow for exchanges between currencies to occur based on a pegged value. Until the market grows big enough where the volatility decreases substantially (complete adoption), then I fully expect good prices to be pegged to a more stable currency such as the USD. That wouldn't stop Bitcoin from being used as a currency however, so I don't really see it as a concern.

EDIT: To further clarify, to address the "mental" perspective you mentioned of one's ability to determine the value of Bitcoin relative to the value of any specific good or service, I don't think there needs to be a complete critical mass understanding of it. Even with USD, many people still have a hard time understanding the value of a good or service as valued in USD. That's why we had a TV show called "The Price is Right" that had participants show how accurately they could determine a good's price in USD. Most people have a rough estimate as to the cost of a good in USD and that is good enough to allow it to act as a universal medium of exchange. Other than that rough understanding, we simply pay what the merchant tells us to pay. Sometimes there is even shock that something cost as much as it did (like when we get a check at a restaurant). Once volatility in Bitcoin diminishes to the point where over the course of a year we can maintain a rough sense of how much something costs in Bitcoin, then the personal mental hurdles of using Bitcoin for purchases will be overcome if merchants ever decide to price their goods solely in Bitcoin without an underlying value in USD.

We're a long way of from having to worry about that though.   :)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: sherr on October 23, 2017, 03:18:47 PM
Essentially what you're suggesting is that all the people who today feel that bitcoin is a safe and secure protocol and are willing to put their hard earned cash in it will someday cease to feel it is a safe and secure protocol...and thus its value would plummet. In order for that to happen, then the network would need to experience some type of hiccup or compromise [paraphrasing] or there would have to be a worldwide governmental clamp down.

But you're doing it again. Neither of those things are required. All that's required for people to stop feeling safe and secure is for them to stop feeling safe and secure. Again, I don't know that this is the case, but I'm 50-50 on whether the next widespread economic downturn completely crashes bitcoin. If all the speculators "wake up" and realize they need "real money" to buy groceries / pay rent / pay taxes and start trying to sell, then the value of bitcoin will crash to near-nothing. Will there be a sizeable number of people who are willing to keep pouring money into bitcoin in the midst of the next stock market crash and keep the value afloat? Maybe. Will there be a bunch of people who start pouring money into it again afterwards? Maybe. But I don't know that, nor really see a reason they would.

For perspective, even if Bitcoin's market capitalization remained constant from here on out (about $100 billion), then its future value in the year ~2140 when all 21 million Bitcoins are mined would still be about $4760...

Also, my above statement was in regards to the fact that this is all true whether or not Bitcoin is ever used as an everyday currency or not. Bitcoin does not need to be used as an everyday currency for people to realize that it still has value because of the security it provides as a store of value.

But there's no reason whatsoever to assume that the market cap will remain constant or close to constant. It could skyrocket, it could crash to zero. The one and only factor that differentiates these scenarios is people's willingness to continue pouring money into the bitcoin marketplace. It's all pure speculation on future behavior.

I mean, I know I'm being a downer on cryptocurrencies in a crytpcurrency thread. So by all means you do your thing. I will stick to government-backed currencies and investments backed by real appreciating assets.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 23, 2017, 05:56:38 PM
All that's required for people to stop feeling safe and secure is for them to stop feeling safe and secure.

I agree, but people don't just change attitudes about things without some type of forcing. You do realize your statement sounds a little ridiculous, right? Why would someone change their opinion about something unless there was something that caused them to have a change of attitude toward it? In the same way that people's opinions of Bitcoin will favorably change over time given Bitcoin's continued stability, the opposite would also be true. If you agree that people would need to no longer feel that Bitcoin is a safe a secure asset, under what condition would they likely suddenly feel that? I think if you put aside your biases against Bitcoin (you have clear biases when you put "wake up" and "real money" in quotes) and truly answer that question, you'll begin to see how Bitcoin will continue to have a future so long as the technology behind it continues to remain safe and secure.

What makes you feel that the next economic downturn would crash bitcoin? You do realize that the technology came before the speculation correct? The speculation would not have occured had Bitcoin, as a protocol, not shown itself to be a stable and secure network. In fact, the earliest of users of the network weren't speculators, they were visionaries and technologists looking to test the system and get the network up and running and put it through its paces. As the network continued to operate, more and more people saw that it was turning away from being merely an experiment and into something that was truly sound and operational. Therefore, when you make the claim that "Bitcoin will crash to near-nothing", you're suggesting that something would happen to the Bitcoin network that would take it from away from "sound and operational" as it was in its earliest of days when it was indeed worth next to nothing. That means the technology itself would need to fail, which brings me back to my original statement. That's why I ultimately feel that unless there is a true compromise of the network and its secure and sound operation (or something better comes along which is another subject altogether), then Bitcoin will never go to zero in the way that you suggest.

Take gold for example. People always argue how gold has "inherent value" given its uses in industry, electronics, medicine, etc. However, has the market cap for gold ever dropped all the way down to its base market value that only covered its uses for industry, electronics, medicine, etc? If the answer to that is no (which it is), then even during all the economic calamities that gold has withstood as a store of value, it still held value simply because people felt it did, not because of its uses or "inherent value". That means that even during some of the most troubling of economic times, there was still money in gold simply because humans deemed it had some value "just because". The more Bitcoin holds value simply because people feel it does, then it will continue to hold value so long as its technology remains stable enough to justify it.

In other words:

Its the technology that drives its value, not the speculation.

But there's no reason whatsoever to assume that the market cap will remain constant or close to constant. It could skyrocket, it could crash to zero. The one and only factor that differentiates these scenarios is people's willingness to continue pouring money into the bitcoin marketplace. It's all pure speculation on future behavior.

I mean, I know I'm being a downer on cryptocurrencies in a crytpcurrency thread. So by all means you do your thing. I will stick to government-backed currencies and investments backed by real appreciating assets.

I agree, the market cap will likely not remain constant. The point I was making wasn't whether or not the market cap will remain constant. It almost certainly will not. The point I was making was that for Bitcoin to remain a decent store of value long term, very little additional money into the market is required for it to remain a decent store of value. I already addressed above how unlikely it is that Bitcoin will go to zero unless there is a technological mishap. So barring a technical catastrophe, it is more than likely that Bitcoin instead will continue to be a stable store of value given the fact that very little money needs to be infused into the market for it to remain so over the long term. It isn't pure speculation on future market behavior, if anything it is speculation on whether or not the Bitcoin network will remain safe and secure given that fact that its security is what will ultimately drive its adoption rate as has already historically been shown to be true. Given that fact, as someone who has a firm grasp on the technology itself, it will continue to remain a safer investment for me over many of the other options available to me at the moment.

You say that you'll stick with government backed currencies, but all the same critiques you've leveled against Bitcoin can be said of government backed currencies. Fiat currencies are backed by the government, but all that means is that they back them as legal tender under national borders. That doesn't mean that they guarantee their value. That is unless you feel that guaranteeing that they'll be worth less in the future is a valid guarantee. History has shown that citizen faith in any given fiat currency can plummet regardless of whether the government backs its currency.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 23, 2017, 06:46:37 PM
Even in the cryptoworld, there are different perspectives and disagreements among participants.

I definitely don't think bitcoin is tenable purely as a store-of-value. The original bitcoin and original value came from solving a long-standing dilemma in network communication, the byzantine generals' problem, overcoming the double-spend issue. Blockchain tech enabled a peer-to-peer online cash transactability. It featured properties such as being decentralized, permissionless, global, private, secure, scarce.

If bitcoin loses its use-cases (provably fair gambling, online services, pair-trading, and so on), or loses its network effect, it would not be sustainable as a store-of-value. There might be a minority that buy bitcoin expecting appreciation to come from people acquiring it for a store-of-value, but I expect the majority will not; and when people start to pull out, so will the value.

The other aspect to this store-of-value is that some believe a majority of others will be willing to pay one hundred, one thousand, or more dollars to transact on the network. I think this is not sustainable either and will diminish the network growth.

Ultimately, in such a store-of-value scenario, you are left with the greater fool. No appreciating asset can be upheld on sentiment.

I mean, I know I'm being a downer on cryptocurrencies in a crytpcurrency thread. So by all means you do your thing. I will stick to government-backed currencies and investments backed by real appreciating assets.

Criticisms are welcomed and good for the space. No one should blindly commit or throw their money into something they disagree with or doubt.

Cryptocurrency has evolved significantly beyond the bitcoin space. I believe, fairly soon, we'll see clearly how it can improve the quality of life, that people are willing to buy it to use as such, fueling demand.


 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: jeromedawg on October 23, 2017, 06:53:51 PM
FWIW just came across this article... sorry if this is a repost, nothing that hasn't already been stated, or adding fuel to the fire... I haven't read through the thread much as I haven't garnered much interest in blockchain/crypto (though I probably should just for educational purposes at the very least):
https://www.cnbc.com/2017/10/23/wolf-of-wall-street-warns-raising-money-through-icos-is-the-biggest-scam-ever.html
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: sherr on October 24, 2017, 07:39:23 AM
All right, since you're asking I'll answer one more time.

All that's required for people to stop feeling safe and secure is for them to stop feeling safe and secure.

I agree, but people don't just change attitudes about things without some type of forcing. You do realize your statement sounds a little ridiculous, right? Why would someone change their opinion about something unless there was something that caused them to have a change of attitude toward it?

I told you why in the part you snipped out. If people realize they need to pay their bills and they can't do it with bitcoin, they'll start selling. If a large number of people start selling, the market value of a bitcoin plummets. If the market value of a bitcoin plummets, speculators panic sell to try to retain some gains or recoup at least some of their losses.

You seem to be assuming that all people who own bitcoins are perfectly rational beings who only own bitcoins for perfectly rational reasons. History tells us that's never been the case about anything. You don't have to have some sort of technological flaw for people to be people. And for the record the fact that I put "wake up" and "real money" in quotes indicates that I was using those terms tongue-in-cheek. If I hadn't put them in quotes that would be the indication of my "clear bias".

Take gold for example. People always argue how gold has "inherent value" given its uses in industry, electronics, medicine, etc. However, has the market cap for gold ever dropped all the way down to its base market value that only covered its uses for industry, electronics, medicine, etc? If the answer to that is no (which it is), then even during all the economic calamities that gold has withstood as a store of value, it still held value simply because people felt it did, not because of its uses or "inherent value".

I agree that gold is an excellent comparison with bitcoin. The difference is that gold has a multi-thousand year history of being the de-facto international currency / value store, and that basically everyone in the world agrees that gold has value in that regard. Bitcoin is trying to be the new gold, but only a very very few people know it exists or care about it at all. Plus it is trying to unseat an established monopoly (gold) in the non-currency value-store market. Which is why it will be much more vulnerable than gold to speculation, crashes, and reverting back to its "inherent value". I don't own gold either for what it's worth.

You say that you'll stick with government backed currencies, but all the same critiques you've leveled against Bitcoin can be said of government backed currencies. Fiat currencies are backed by the government, but all that means is that they back them as legal tender under national borders. That doesn't mean that they guarantee their value.

I think you need to turn that backwards. I agree that "fiat currencies" are vulnerable to many of the same problems that bitcoin-as-a-currency is vulnerable to. The difference is that for government-backed currencies, you have an entire nation (at least) full of people with a vested interest in ensuring that currency has value. The government wants to ensure it can participate in international trade and feed its people (so the politicians don't all get shot in the revolution). The rich people (with lots of power because they are rich) want to ensure that they stay rich. There are whole organizations and agencies full of people who's whole job is to ensure that the country's economy is growing and the currency has semi-stable value.

Bitcoin has none of those.

You keep on insisting that cryptocurrencies will have some stable value unless there is some type of technological problem. Common sense and a quick glance at cryptocurrency markets tells us that's not true. A bitcoin is only worth what someone is willing to pay you for it. If there are a billion people holding bitcoin, but none are buying, the value is nothing - you cannot sell your bitcoin. If there are 1.5 people selling for every 1 person buying, the value crashes precipitously until it gets low enough that an extra half-person decides to buy. Neither of those situations requires a technological problem, merely an economic or psychological problem are sufficient.

Like I said, I get that this is a crytocurrency thread, so go do your thing. I will not participate, and I'll stop arguing with you about it.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shotgunwilly on October 24, 2017, 08:02:57 AM

In other words:

Its the technology that drives its value, not the speculation.

Wow, you actually believe this right now?

The exact opposite is true, actually.

I'm for Crypto, and have money in various coins.  But you are lying to yourself if you think blockchain cryptocurrencies prices aren't driven by almost pure speculation at this point.  The majority of people that own Bitcoin are doing it for a ROI.  Period.

And THAT is why this thing COULD come crashing down very fast.  It's propped up on speculation, and could crumble, actually much faster, than the housing and tech markets did.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: surfhb on October 24, 2017, 09:13:35 AM
I'm sure I'll be written off as the tired old man here. I'm 49.   

Was concerns me the most is that most of the under 35 crowd has only know an EXTREME period of market growth their entire investing lives.   Not just extreme but unprecedented!     

Twice I've seen my stash grow to unbelievable levels and lose its value in a matter of a year.   I've seen friends lose homes, jobs, spouses, etc. over these market crashes .   

I suggest you don't speculate a large portion of your net worth.   Believe me


Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 24, 2017, 09:18:29 AM

In other words:

Its the technology that drives its value, not the speculation.

Wow, you actually believe this right now?

The exact opposite is true, actually.

I'm for Crypto, and have money in various coins.  But you are lying to yourself if you think blockchain cryptocurrencies prices aren't driven by almost pure speculation at this point.  The majority of people that own Bitcoin are doing it for a ROI.  Period.

And THAT is why this thing COULD come crashing down very fast.  It's propped up on speculation, and could crumble, actually much faster, than the housing and tech markets did.

No, I fully believe that the REASON why a lot people are putting their money into Bitcoin is based on a lot of speculation. The reason why someone is putting their money doesn't matter as much (I'll explain why).

You're misconstruing my words though and/or missing the point I'm making.

The price of Bitcoin is strictly tied to the demand for it given its limited supply. The more demand, the higher the price for it in the market place. Therefore, its price is almost a self-fulling prophecy. The more people that demand it, the higher the price will go. The higher the price will go, the more people will demand it. It is a positive feedback loop that will drive its adoption toward critical mass. All mass appeal technology adoptions follow an S-curve. The same is true for Bitcoin, so at some point adoption will level off and because of this its price will level off as well. This means its price is strictly based on its adoption level and rate, regardless of the reason why the market is putting their money in it.

However, when I say that it is the technology that drives its value is because of the fact that underlying all those market forces is technology. If Bitcoin doesn't provide a safe place for people to place their money, if Bitcoin wasn't based on sound mathematics that is built on open-source software and is run on a decentralized network, then people wouldn't be putting their money into Bitcoin in the first place. If one day, Bitcoin ceases being a safe and secure protocol, then the whole system will fail and people will rush to get whatever money they can out of it. However, the opposite is also true. If Bitcoin continues to be a safe and secure protocol, then people will continue to put their money in it and the above positive feedback loop will continue to occur.

It is the technology that is ultimately driving this thing. Tell me, if the technology of Bitcoin isn't what it is, would people be putting their money in it? No, they wouldn't. That's what underpins this whole thing.

Keep in mind I am strictly talking about Bitcoin, not other cryptos or ICOs. ICOs are a different beast all together as they're not based on the same principles as Bitcoin and usually have failing companies behind them and/or worse are just simply fraud. The driving force behind those will at some point become apparent that they were fraudulent and therefore there will be many that will go to a value of $0. That won't effect Bitcoin's price much however since the money is usually moved in and out of Bitcoin pretty quickly to invest in these and therefore they don't impact Bitcoin's overall demand and price much long term.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: GuitarStv on October 24, 2017, 09:20:06 AM
I'm sure I'll be written off as the tired old man here. I'm 49.   

Was concerns me the most is that most of the under 35 crowd has only know an EXTREME period of market growth their entire investing lives.   Not just extreme but unprecedented!     

Twice I've seen my stash grow to unbelievable levels and lose its value in a matter of a year.   I've seen friends lose homes, jobs, spouses, etc. over these market crashes .   

I suggest you don't speculate a large portion of your net worth.   Believe me


Kinda a sweeping statement.  I'm 36, and I had around 100 grand invested in 2008.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 24, 2017, 09:31:39 AM
I'm sure I'll be written off as the tired old man here. I'm 49.   

Was concerns me the most is that most of the under 35 crowd has only know an EXTREME period of market growth their entire investing lives.   Not just extreme but unprecedented!     

Twice I've seen my stash grow to unbelievable levels and lose its value in a matter of a year.   I've seen friends lose homes, jobs, spouses, etc. over these market crashes .   

I suggest you don't speculate a large portion of your net worth.   Believe me

This would also go against just about every other sentiment I've heard regarding the 35 and younger crowd regarding their feelings on the stock market. You make it sound like all they've experienced in their lives are complete unprecedented abundance. The opposite couldn't be further from the truth. Most of them actually were put right into the market at the time of one of the worst recessions and the growing sentiment among that crowd is that they're very distrusting of the stock market. From the surveys I've seen from the 35 and younger crowd is that they have an extreme dislike for Wall Street because of that. Any one who is too young to have experienced the latest recession and its aftermath is likely too young to have fully enjoyed the abundant upswing after as well, so I think your viewpoint is a little skewed.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 24, 2017, 09:34:07 AM
I'm sure I'll be written off as the tired old man here. I'm 49.   

Was concerns me the most is that most of the under 35 crowd has only know an EXTREME period of market growth their entire investing lives.   Not just extreme but unprecedented!     

Twice I've seen my stash grow to unbelievable levels and lose its value in a matter of a year.   I've seen friends lose homes, jobs, spouses, etc. over these market crashes .   

I suggest you don't speculate a large portion of your net worth.   Believe me


Kinda a sweeping statement.  I'm 36, and I had around 100 grand invested in 2008.

We also know people that lost very large sums during the internet bubble. And we're fully aware of the (non-crypto) market cycles; many people are expecting an upcoming big correction.

For crypto, no one should be dipping into 401k, real estate, or other traditionals investments. If they want to do five figures or whatever amount, it should come from something like their sizable emergency fund or rainy day cash. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 24, 2017, 09:55:07 AM
I think you need to turn that backwards. I agree that "fiat currencies" are vulnerable to many of the same problems that bitcoin-as-a-currency is vulnerable to. The difference is that for government-backed currencies, you have an entire nation (at least) full of people with a vested interest in ensuring that currency has value. The government wants to ensure it can participate in international trade and feed its people (so the politicians don't all get shot in the revolution). The rich people (with lots of power because they are rich) want to ensure that they stay rich. There are whole organizations and agencies full of people who's whole job is to ensure that the country's economy is growing and the currency has semi-stable value.

Bitcoin has none of those.

You keep on insisting that cryptocurrencies will have some stable value unless there is some type of technological problem. Common sense and a quick glance at cryptocurrency markets tells us that's not true. A bitcoin is only worth what someone is willing to pay you for it. If there are a billion people holding bitcoin, but none are buying, the value is nothing - you cannot sell your bitcoin. If there are 1.5 people selling for every 1 person buying, the value crashes precipitously until it gets low enough that an extra half-person decides to buy. Neither of those situations requires a technological problem, merely an economic or psychological problem are sufficient.


Cryptocurrency represents a new technology. A technology that encompasses and redefines the meaning of currency and value. It allows something like cash or data to be virtually represented and globally transmitted, permissionless and censor-free, with near-instantaneous speeds. It is tampered proof and allows for new use-cases of nonrepudiation in the business world.

Cryptocurrency will become a part of and evolve the current financial system and other systems or supersede them.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 24, 2017, 11:26:08 AM
"All mass appeal technology adoptions follow an S-curve."

All mass appeal technology adoptions involve a drastic reduction in price as the technology is adopted. They would be utter failures otherwise.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 24, 2017, 11:49:46 AM
"All mass appeal technology adoptions follow an S-curve."

All mass appeal technology adoptions involve a drastic reduction in price as the technology is adopted. They would be utter failures otherwise.

That's true of the technology is a mass-produced good with no scarcity that can achieve production improvements over time. That's not true for a limited scarce asset that achieves critical mass adoption.

The adoption S-curve and the price of said technology are two different functions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 24, 2017, 12:16:20 PM
If there are a billion people holding bitcoin, but none are buying, the value is nothing - you cannot sell your bitcoin. If there are 1.5 people selling for every 1 person buying, the value crashes precipitously until it gets low enough that an extra half-person decides to buy. Neither of those situations requires a technological problem, merely an economic or psychological problem are sufficient.

Your scenarios are only half of it though. If a billion people own Bitcoin and no one is selling, that means that everyone values the Bitcoin that they own way above what anyone is able to pay for it. In other words, they'd be priceless. That would never happen because you're assuming that no one would ever put a price on the Bitcoin they own. Everyone always has a price. Therefore, if a billion people own Bitcoin, there will always be Bitcoin for sale. Everyone will have different prices for what they're willing to part with their Bitcoin for, but you can be sure that there will always be Bitcoin for sale if a billion people own some. That's simply how free and open markets work, of which Bitcoin is one of the most free and open markets out there.

The other side of the coin is also true. The problem with saying that psychologically if everyone is selling and no one is buying is that would mean that suddenly no one values Bitcoin at all for any value. For that to happen, it would need to experience a technical failure or perhaps another currency came along that supplanted it. If it doesn't experience a technical failure, then there will always be buyers just as their are today that are willing to purchase it at some price based on the fact that the decentralized network itself has value. I'm not saying that the price of it can never go down. There will certainly be ebbs and flows. I'm simply saying that the longer that Bitcoin is around and operational, the more and more people will find it harder to ignore the fact that it is one of the only computer networks with an up time and security reputation as good as it is that is capable of facilitating financial transaction in our economy in and open and decentralized way. I'll say it again, make no mistake, the success or failure of the technology of Bitcoin will drive the market, not the speculation.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: arebelspy on October 24, 2017, 12:26:48 PM
If there are a billion people holding bitcoin, but none are buying, the value is nothing - you cannot sell your bitcoin. If there are 1.5 people selling for every 1 person buying, the value crashes precipitously until it gets low enough that an extra half-person decides to buy. Neither of those situations requires a technological problem, merely an economic or psychological problem are sufficient.

Your scenarios are only half of it though. If a billion people own Bitcoin and no one is selling, that means that everyone values the Bitcoin that they own way above what anyone is able to pay for it.

Sherr didn't say a billion people owning and no one selling, Sherr said no one buying. That's a crucial difference. You're right that everyone values their bitcoin above what people are willing to pay in that scenario, and that value is (some amount of money -- e.g. 0.01 for lots of bitcoins) and no buyers are willing to pay any amount of money.

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In other words, they'd be priceless.

Not priceless, worthless.

Quote
That would never happen because you're assuming that no one would ever put a price on the Bitcoin they own. Everyone always has a price. Therefore, if a billion people own Bitcoin, there will always be Bitcoin for sale.

Right. There will be some for sale in this scenario. Lots of it, in fact. With no one buying.

Just wanted to clarify, because you seemed to understand the scenario as "it's at value $x, but no one will sell below $x, and no one will buy at $x, so the price is flat and no one can sell, because they won't reduce their price" but in this case, x = 0, and they can't reduce their price.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 24, 2017, 12:49:40 PM
Indeed, price/demand doesn't work that way. If you have no buyers, and even one person *needs* to sell, then the value of the item is zero,  no matter how much all the current owners paid. Obviously that isn't the case but anytime you have more sellers than buyers, the price of the item will drop (though with some things like houses it may take a while and transaction volume will drop instead until enough sellers become desperate and capitulate).

Bitcoin has plenty of buyers right now. So did many things in the past that are today worth nothing.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 24, 2017, 01:10:01 PM
Sherr didn't say a billion people owning and no one selling, Sherr said no one buying. That's a crucial difference. You're right that everyone values their bitcoin above what people are willing to pay in that scenario, and that value is (some amount of money -- e.g. 0.01 for lots of bitcoins) and no buyers are willing to pay any amount of money.

Ah, you're right, I read that wrong. I saw he said there were two different scenarios at the end of the paragraph and then I got the two scenarios in my head (no buyers versus no sellers) and started writing about them both. Either way, I covered both scenarios in my post even though Sherr was only talking about the one.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 24, 2017, 02:07:33 PM
"All mass appeal technology adoptions follow an S-curve."

All mass appeal technology adoptions involve a drastic reduction in price as the technology is adopted. They would be utter failures otherwise.

That's true of the technology is a mass-produced good with no scarcity that can achieve production improvements over time. That's not true for a limited scarce asset that achieves critical mass adoption.

The adoption S-curve and the price of said technology are two different functions.

I'd argue that they're actually quite closely related, and that disregarding one in a prediction of likely future behaviours is equivalent to assuming that the Cleveland Browns won a match because they scored fifteen points.

But that's beside the principal point, which is that there's no evidence that cryptocurrencies are actually following a technology-adoption S-curve rather than a classical bubble trajectory. At the moment, the pattern for demand fits both; however, as far as I'm aware, the technology S-curve has historically been marked by an increase in supply that outstrips the increase in demand, hence the reduction in price. That's not an easily dismissed incidental; it's been a core feature of how technology has been adopted throughout history. What cryptocurrencies are doing is far closer in terms of supply/demand relationships to historical bubbles, which would indicate that we're better off looking at tulip bulbs and the Irish property market (where ever-increasing demand crashed against limited supply growth and triggered booms in pricing) than the iPod and the printing press (where supply continuously ramped up as demand kept increasing) for an idea of what the crypto market is likely to do.

This isn't a particularly controversial point: the guy who literally wrote the book on economic bubbles (and won a Nobel for it) has specifically argued that cryptocurrencies are in a bubble. You've even acknowledged that the motivations of investors in the market is principally speculative.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 24, 2017, 05:04:13 PM
as far as I'm aware, the technology S-curve has historically been marked by an increase in supply that outstrips the increase in demand, hence the reduction in price.

I don't think that is true. The adoption S-curve has nothing to do with the supply of the innovation in question and everything to do with the rate at which the public adopts the innovation. Cars, radio, TV, electricity, the internet, cell phones, GPS, social networks, etc are all technologies that have followed or are currently following an S-curve for adoption. The S-curve has less to do with supply and demand and more simply to do with the adoption of the innovation by the public at large. The price of commodities has more to do with supply and demand and production economies of scale and less to do with the S-curve of its public adoption.

What cryptocurrencies are doing is far closer in terms of supply/demand relationships to historical bubbles, which would indicate that we're better off looking at tulip bulbs and the Irish property market (where ever-increasing demand crashed against limited supply growth and triggered booms in pricing) than the iPod and the printing press (where supply continuously ramped up as demand kept increasing) for an idea of what the crypto market is likely to do.

What criteria are you using for your analysis? You see, this is the main problem I have with those who are making claims about bubbles. Howard Marks, Peter Schiff, Mark Cuban, Jamie Dimon, Robert Shiller, ...these are all people who called Bitcoin a bubble, fad, a pyramid scheme and yet not a single one of them have given a decent analysis as to why they think so. Most of them in their critique have shown (or blantantly said) that they clearly don't understand the technology itself. Ultimately, their analysis has been based simply on the price of Bitcoin alone and nothing more. Howard Marks called it a pyramid scheme even though that's impossible for Bitcoin to be one and even acknowleged that he doesn't understand the technology. Mark Cuban once called it a bubble and yet now he's investing in crypto and changing his tune on Bitcoin. I've yet to see these experts who claim that Bitcoin is a bubble reveal any detailed or reasoned analysis as to why they think Bitcoin is a bubble.

Let look at it this way:

Bitcoin is currently has a market cap of about $90-100 billion. A year ago it was about $10b. That's about $90 billion dollars that have flooded into Bitcoin over the last year. Let's look short term. Where do we think this could go next year? I firmly believe over the next year we'll see Bitcoin go up at least the same amount and hit a market cap of about $200 billion and give it a price above $10,000. Why? Here are a few markers that I believe lead this to be likely:

1) The continued stable operation of the Bitcoin network.
2) Bitcoin options/futures trading
3) The eventual approval of a Bitcoin ETF
4) Continued government approval and regulation (see Japan, Australia, Mexico, Russia, Ukraine, etc)
5) Increased hedge fund crypto investment
6) Massive sign-up rates for online wallets in recent months

You see all these things are creating and generating sentiment and a tailwind for Bitcoin that will allow its continued adoption among users. This is all fueled, as I said, by the fact that the technology that underpins it will continue to operate smoothly.

Now I fully understand that theoretically Bitcoin can go to $0. But, what are some situations that would make that possible?

Perhaps governments all over could crack down on it. But, that would require a drastic change of heart coming from many democratic countries all over the world. China just recently cracked down on exchanges and ICOs and yet Bitcoin still continued on upward. So a crackdown on a few countries (even one as large as China) is not enough to impact Bitcoin. For governments to have a hinderance on Bitcoin's adoption, you'd need a complete worldwide crackdown on some of the world's largest economies, many of which are democratic (and thus less likely to enact such a crackdown).

There could come along another crypto-currency which does exactly what Bitcoin does, only better. Maybe, but Bitcoin has such a drastic lead on other crypto-currencies, that such a huge change in circumstances is highly unlikely to occur over the next year. Also, features that other crypto-currencies have that would give reason for the market to move to something different could be implemented into Bitcoin itself (see SegWit activation).

Then, like I suggested, another possible outcome is that something happens to the Bitcoin network that causes a catastrophic failures which in turn causes the market to lose its trust in Bitcoin. This is certainly possible, but Bitcoin is software and with so much money in the economy, it is more likely that such an economy would look to resolve a failure and fix what's broken instead of abandon it. However, you never know how the market would react to such a failure, so its always possible that a technology failure could cause a market failure. This, however, I find highly unlikely.

Do you have any other thoughts on what might cause a drastic market decline over the next year? Given the markers for positive gain over the next year and the unlikelihood of some of the leading possibilities that could lead to a market decline, it is much more likely that Bitcoin will continue to see heavy growth in 2018. Not just a mediocre growth. I'm talking about a doubling in price which would again make Bitcoin a better investment than just about any other traditional option out there.

This isn't a particularly controversial point: the guy who literally wrote the book on economic bubbles (and won a Nobel for it) has specifically argued that cryptocurrencies are in a bubble.

As I said for you, the same goes for any other person who feels they're an expert. If someone is going to claim bubble, then it behooves them to explain their rationale for making such a claim that goes beyond just a simple price analysis.

You've even acknowledged that the motivations of investors in the market is principally speculative.

I've already said that doesn't matter. The market price for gold has never dropped to the point where it only met the demand for its industry usage. The price for gold above and beyond that is strictly based on speculation as well and yet through all sorts of economic conditions gold has continued to be valued based on speculation alone. What drives this speculative market? The fact the investors place value on its scarcity. Bitcoin is digital scarcity that has been developed based on decades of cryptographic research. People put value on this just like they put value on the scarcity of gold. It is my belief that this will always continue to hold value. This is obviously hard to imagine because this is the first time that something has ever been digital and scarce at the same time. But, this is a big innovation and I see things going in Bitcoin's favor well into 2018.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 24, 2017, 05:49:07 PM
In response to the technology adoption s-curve and it's correlation with the decline in the cost of the technology:

The price of one bitcoin has essentially no relationship to the cost of the technology.

To use bitcoin as a technology to store value, the cost is 1) the fees charged by exchanges to buy bitcoin and general headache of learning how to transfer money to exchanges, how to buy bitcoins, and how to store them once you have them 2) any loss in value from the fluctuating price of bitcoin.

To use bitcoin as a medium of exchange, the cost is 1) same as #1 above and 2) the cost of transaction fees charged by miners to actually send bitcoins from one wallet to another.

The cost of #1 has been coming down (slowly) as a result of both improved technology and educational resources, as well as competition between exchanges. OTOH, #1 increases from time to time when new regulations or limitations come out exchanges. I'm not sure if the overall trend over the last several years is towards higher or lower prices at this point.

For #2 in using bitcoin as a medium of exchange, the price has actually been increasing dramatically as a result of blockchain congestion (although maybe segregated witness will fix this eventually?). For #2 in using bitcoin as a store of value, this cost is linked to volatility, more volatility = higher cost for using it as a store of value, less volatility = less cost for this use. I haven't actually seen any analyses on whether the volatility of bitcoin has been increases, decreasing, or staying the same.

*shrug*

Anyway, my point is just that an increase in the cost per unit of an individual cryptocurrency doesn't tell you anything either way about whether the cost of using the cryptocurrency is increases or decrease. And it's the cost of using it, not the cost of the currency units, that needs to decline is you're going to see an S-curve shaped adoption of the technology.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 24, 2017, 06:17:52 PM
Indeed. Widespread use (that doesn't mean constantly converting back and forth to dollars to buy things) and a low transaction cost, along with *stable prices* would mean you could start talking about how efficient/inefficient it was for it's purpose (facilitating exchange of real-world goods and services). So far none of those conditions exist, so you can't really say anything one way or the other about Bitcoin as a *currency*.

As e-gold/store of value it is certainly cheaper than handling physical gold. Thus far it's not as secure, however.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 24, 2017, 06:42:02 PM
Walt, this is a point where I know you and I disagree. I think bitcoin (or similar currencies) can do a great job as a medium of exchange even if all prices are still set in dollars and everyone trades in an out of their native currencies before and after every transaction. But it does require that the cost of transactions (in both currency and time/hassle) continue to decrease over time.

Note that this use case says nothing about the value of bitcoin. It can work just as well if bitcoin is $0.01/coin of $1M/coin as long as the exchange markets between bitcoin and other currencies highly liquid (which they are today).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 24, 2017, 09:15:41 PM
I guess that could be the case, though it would be more of a vote of confidence if you paid someone directly in bitcoin, and they then could use it for the next transaction and so on.

I agree that the price itself doesn't matter (you can just pay with tiny fractions of a bitcoin if it's worth $1,000,000). Stability of that price over long periods of time *does*, though. I don't see that happening anytime soon.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 25, 2017, 06:07:00 AM
I don't necessarily think that the stability in Bitcoin's price is a huge barrier for its use as a medium of exchange if the price of goods is still set in fiat currency. This comes from someone who uses Bitcoin as their spending money.

If Bitcoin goes up or down $300 when its price is around $5500, then that's a change of around 5%. That's not an unheard of daily change for Bitcoin, but I'd also say that its well above average for a daily change.

So if I have $315 in spending money, then that means I could check my balance in the morning and have $315 and then check again later that evening and have $300 or maybe $330. But, that change matters even less when I go to spend it that day. If I spend $20 on a day where the price changed 5%, then that's really only an extra dollar difference +/-. So long as the price of the good stays the same since it is set in fiat currency, then my expenditures will generally average out over the course of a month. Because my spending money is generally exhausted each month, it usually only sees minor gains over the course of each month depending on what transpired with Bitcoin's price during that time. Unless you're doing extremely large purchases, then the volatility matters less when it comes to daily purchases.

With that said, I do think volatility would need to level out if we ever were to get to a point where goods are priced in Bitcoin and people's salaries are set in Bitcoin. I doubt we'd ever see that day in my lifetime, but volatility would certainly be bad in those cases. If goods themselves are priced in Bitcoin, then people need to have a general sense of what a good costs relative to what a Bitcoin is worth and that number would have to remain fairly stable from month to month.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: simonsez on October 25, 2017, 06:23:25 AM
The S-curve has less to do with supply and demand and more simply to do with the adoption of the innovation by the public at large.
That just sounds like demand.  How can the public adopt an innovation but not buy it?  If they really are separate concepts, how do you measure the adoption rate/prevalence without looking at how many good and services are bought?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 25, 2017, 06:48:30 AM
That just sounds like demand.  How can the public adopt an innovation but not buy it?  If they really are separate concepts, how do you measure the adoption rate/prevalence without looking at how many good and services are bought?

Demand is slightly different than adoption. They're certainly close in concept, but they are different. Demand is how much of or often something is utilized or purchased, whereas adoption is simply how much of the public at large is using a given technology.

For example, demand could be the measure of how many cars I am buying, whereas adoption would be whether or not I've chosen to buy a car at all. If I purchase a car, then I've adopted it, but if I only purchase one car and keep that same car for 15 years, then my demand is low. However, I could go even further and purchase a new car every two years and my demand for cars is high. So they're closely related, but not the same.

The adoption S-curve only measures the adoption rate of the technology, not the demand for it.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 25, 2017, 07:22:01 AM
I agree that the price itself doesn't matter (you can just pay with tiny fractions of a bitcoin if it's worth $1,000,000).

Agreed, but I was actually also trying to make the opposite point. Widespread adoption of any particular currency as a medium of exchange (but not a store of value) doesn't necessarily mean that the value of the currency would increase a lot. So that fact I'm arguing that the medium-of-exchange bit is likely to happen (whether is bitcoin or some other cryptocurrency) doesn't tell you a lot about whether buying whichever currency it turns out to be for capital appreciation is a good idea or not.

I could imagine a hypothetical future where cryptocurrency is widely used to settle payments, but the tools for trading in and out of it on both ends are so fast/efficient that the total value of that cryptocurrency only needs to be a few billion to facilitate millions of transactions per day.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 25, 2017, 11:17:09 AM
Widespread adoption of any particular currency as a medium of exchange (but not a store of value) doesn't necessarily mean that the value of the currency would increase a lot.

Yes, and that's why we need to consider other aspects, such as crypto that can directly validate the network and receive tx fees; where value will partially come from fee and volume.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 26, 2017, 02:12:36 PM
Crypto currencies are to investing what a brand new GM truck is to Mustachians.   

Isn't this the opposite of what this blog preaches ?     ...

I want to hear from the 40+ crowd who have experienced these kinds of events.   

I'm new here but will respond to this as I'm pushing 50 and yet have been in crypto since 2012.  I agree that crypto is not what this blog is about and that most people should probably stay away.  However crypto is a new asset class with unique properties and the potential for significant impact on the world.  For those with the technical background to understand it and the ability and resources to manage some limited risk, I see it as a valid high-risk/high-return speculation.

Quote
Do any of you ever experienced an extended bear market?   Where you lost hundreds of thousands in equity value in a matter of months? 

I have seen several bear markets. I got cooked in the tech crash of 2000 and lost a significant amount of my investing assets and a good chunk of my 401k.  I managed to move my 401k to cash several months before the 2008 crash but before you call me a genius I failed to get back in until after missing much of the later recovery.  My paranoia of being cooked like I was in 2000 has driven a long term interest in trading and index timing (which is also not in line with much of this blog).

However it's worth noting that Wall Street bear markets are nothing compared to bear moves in crypto.  You cannot be successful in crypto without being able to deal with massive moves down even as longer term the asset is moving up.  For example bitcoin investors had to deal with falls from $10 down to $1 and later $1100 down to $250. They've also had to dodge dozens of potential pitfalls including malware wallet thefts, exchanges being hacked, millions of scams, etc. 

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If so, do you feel comfortable with things like bitcoin?     Yes?  How?

I'm a Computer Scientist with 30 years of software development experience.  Beyond that my main side interests ever since the internet took off have been money and markets.  When I eventually found bitcoin I felt like my whole life had been preparing me for it.

Again I don't think crypto really fits with this blog, however if you have the knowledge and the ability to deal with massive volatility, putting a bit of speculative money into crypto might result in big returns.  I never put more into crypto than would be too much for me to lose, and it has worked out extremely well for me.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: sherr on October 27, 2017, 08:02:12 AM
For those with the technical background to understand it

I know that this is not what you're doing, so don't take it personally because I'm not accusing you of anything. I'm just going to piggyback on your comment to say something that's been on my mind.

I've seen a lot of comments in this thread and other places that tend to imply that those who "understand" cryptocurrencies are for them, and that people who aren't don't. I just wanted to state for the record that I'm also a Senior Software Engineer. I understand the technology. I think it's probably nothing but a pyramid scheme and a tulip-style speculation bubble that will eventually pop. So does everyone else I work with.

There seems to be a recurring dismissal of finance guys who are calling Bitcoin a worthless bubble as "just not getting it". I think they probably do, you don't get to be the CEO of JPMorgan or whatever by being a dummy. I think it's somewhat arrogant to dismiss all criticisms as "well they just don't understand as much as I do" (again, I know you're not doing this).

I think MystryBox's approach is actually very rational and well-grounded. Using play money to speculate in an uncorrelated asset class seems to me to be exactly what the crypto market is good for right now. If that's what you (generic reader) are doing then more power to you, have fun. However if you're someone who is caught up in the hype and is investing serious money in crypto because "everyone who understands it agrees it's a good investment", maybe take a step back and realize that's not true.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 27, 2017, 09:03:25 AM
I understand the technology. I think it's probably nothing but a pyramid scheme

This seems to contradict the idea that you understand the technology of Bitcoin. Either you don't understand Bitcoin or you don't understand what a pyramid scheme is.

There seems to be a recurring dismissal of finance guys who are calling Bitcoin a worthless bubble as "just not getting it". I think they probably do, you don't get to be the CEO of JPMorgan or whatever by being a dummy. I think it's somewhat arrogant to dismiss all criticisms as "well they just don't understand as much as I do" (again, I know you're not doing this).

There are plenty of valid criticisms of bitcoin and crypto-currencies that have been discussed throughout this thread (bogus/fraudulent ICOs, harmful regulations, competing currencies, scaling issues, etc). However, when Jamie Dimon, that CEO of JP Morgan Chase that you refer of, is in an interview and is asked a question about ICOs and that is literally the first time he's ever heard of the term ICO, then that makes me question his knowledge on the subject matter of which he is speaking. Therefore, when he makes the claim that Bitcoin is a bubble, I have little faith that he's actually done any analysis to come up with that claim. The same goes for Howard Marks, where as I mentioned before, in his memo that he released to his investors, he actually admitted that he doesn't understand the technology at all.

So I find it hard to agree with you on idea that some of these people that are claiming Bitcoin is a bubble actually have done a detailed analysis as to why they think so. No doubt they are very smart people, but that doesn't make them an expert of all things. They certainly haven't shared their analysis from what I've seen outside of a simple "yup, the price is too high too fast!" In fact, I rarely ever hear an analysis as to why someone thinks Bitcoin is a bubble, all I hear is that another financial person has claimed Bitcoin is a bubble and then it makes a news headline. When that's been going on for several years, it grows increasingly difficult to take them seriously.

I agree that you shouldn't invest any money in crypto-currencies that you aren't prepared to lose. I also think that the amount of money you put into crypto-currencies should be proportional to the amount of understanding you have of the technology. That same advice could be said of just about any investment. For example, I'd advise against putting money into the stock of a company that you have little understand of and don't follow on a daily/hourly basis. I also don't think you should invest in real estate if you don't understand the real estate market in which you're investing.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: sherr on October 27, 2017, 09:14:59 AM
I understand the technology. I think it's probably nothing but a pyramid scheme

This seems to contradict the idea that you understand the technology of Bitcoin. Either you don't understand Bitcoin or you don't understand what a pyramid scheme is.

There seems to be a recurring dismissal of finance guys who are calling Bitcoin a worthless bubble as "just not getting it". I think they probably do, you don't get to be the CEO of JPMorgan or whatever by being a dummy. I think it's somewhat arrogant to dismiss all criticisms as "well they just don't understand as much as I do" (again, I know you're not doing this).

There are plenty of valid criticisms of bitcoin and crypto-currencies that have been discussed throughout this thread (bogus/fraudulent ICOs, harmful regulations, competing currencies, scaling issues, etc). However, when Jamie Dimon, that CEO of JP Morgan Chase that you refer of, is in an interview and is asked a question about ICOs and that is literally the first time he's ever heard of the term ICO, then that makes me question his knowledge on the subject matter of which he is speaking. Therefore, when he makes the claim that Bitcoin is a bubble, I have little faith that he's actually done any analysis to come up with that claim. The same goes for Howard Marks, where as I mentioned before, in his memo that he released to his investors, he actually admitted that he doesn't understand the technology at all.

So I find it hard to agree with you on idea that some of these people that are claiming Bitcoin is a bubble actually have done a detailed analysis as to why they think so. No doubt they are very smart people, but that doesn't make them an expert of all things. They certainly haven't shared their analysis from what I've seen outside of a simple "yup, the price is too high too fast!" In fact, I rarely ever hear an analysis as to why someone thinks Bitcoin is a bubble, all I hear is that another financial person has claimed Bitcoin is a bubble and then it makes a news headline. When that's been going on for several years, it grows increasingly difficult to take them seriously.

I agree that you shouldn't invest any money in crypto-currencies that you aren't prepared to lose. I also think that the amount of money you put into crypto-currencies should be proportional to the amount of understanding you have of the technology. That same advice could be said of just about any investment. For example, I'd advise against putting money into the stock of a company that you have little understand of and don't follow on a daily/hourly basis. I also don't think you should invest in real estate if you don't understand the real estate market in which you're investing.

Way to demonstrate exactly my point an hour and one minute after I posted.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 27, 2017, 09:25:32 AM
For those with the technical background to understand it

I know that this is not what you're doing, so don't take it personally because I'm not accusing you of anything. I'm just going to piggyback on your comment to say something that's been on my mind.

...
To clarify, when I say people should have the technical background, I was talking about the technical aspects of the bitcoin asset that make it difficult for the non-technically savvy to even use it safely.  For example, it acts like cash or gold in that if it gets stolen or you forget your passwords it is gone.  You can't call up someone and get it back. 

I realize not everyone that understands bitcoin thinks it's a good investment and I respect your view that it's a speculation.  It is a speculation.  Though it's not a pyramid scheme by definition (if you read the details on a pyramid scheme bitcoin doesn't fit), but it is a tulip-style bubble in some ways.  However most monies are basically bubbles, including the US dollar.

Before I got into bitcoin and other crypto, I was a gold bug.  I spent a lot of time studying commodity money, symbolic money, representative money, fiat money, etc. The breakthrough that bitcoin achieved was a non-replicable, transferable, digital token--essentially it was the first digital asset that literally acted like physical property. People giving that useful token value came naturally, just as people giving unique shiny rocks (gold) came naturally. I recognized what was happening early, why it was happening, and where it might go--and I got on board.  It was a risk but it was a good risk.  I knew bitcoin wasn't what people were calling it for years...  it wasn't a fraud, a scam, or a pyramid scheme.  It was something new and groundbreaking and would have some real value and lead to even bigger things.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 27, 2017, 09:30:18 AM
Way to demonstrate exactly my point an hour and one minute after I posted.

I love a good debate that involves analysis on any given subject. I'll also try and never make personal attacks with those I debate with. If I dismiss someone's statement on a given subject matter, it is usually only due to a lack of reasoning behind said statement. Therefore, I don't dismiss "financial gurus" simply because they're "financial gurus". Jamie Dimon could've just as easily been a developer who was originally involved with Bitcoin and had he made the same statements Jamie Dimon did without giving his reasons, then I'd question it all the same. I'm prejudice not against stature or job title, but against a lack of reasoning.

If you want to debate the potentials of an ICO bubble and its potential impacts on Bitcoin, that's fine. There is a debate to be had there. But saying Bitcoin is a pyramid scheme or calling it a bubble simply because one believe's so just doesn't jive with me. The same goes for those that say that Bitcoin will one day reach $300,000 by such and such date without giving their reasons.

The more you post about Bitcoin being a bubble without actually giving your detailed reasons for it being so, then the more you prove my point.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 27, 2017, 10:24:36 AM
I could imagine a hypothetical future where cryptocurrency is widely used to settle payments, but the tools for trading in and out of it on both ends are so fast/efficient that the total value of that cryptocurrency only needs to be a few billion to facilitate millions of transactions per day.

Yes, this is sort of where I see it going. As it stands, if you want to pay for something electronically (with a debit card, we'll leave credit cards out of this) you swipe the card, and then the card processor charges the merchant a fee (~3%) in exchange for transferring the money between you and providing some level of fraud prevention/security.

But they *don't* trade your dollars into Visa-Bux and back again to do that. And there's not really a reason that bitcoin/blockchain tech needs to have a "currency" attached to it with *any particular value* in order to facilitate transactions, if both parties just want dollars in the end. All the bitcoin on earth could be worth $500 million and you could use it for exchange that way (dollars instantaneously to bitcoin instantaneously to dollars) or it could be worth $500 quadrillion. Doesn't matter.

At some point you start to wonder about the point of having the "currency" part of it at all, if you're just transferring dollars to dollars.

So while I see the technology being a great thing and possibly a wonderful way to get the vampire squid credit/debit card companies from siphoning 2-3% of the every transaction, I *don't* think that means buying bitcoins (or any other crypto "currency") is a good investment or correlated to the potential of the technology.

I think that's where my main disagreement here is. I think you could invest in companies that are developing this technology (still pretty speculative since most of them will fail) and maybe do great, but buying the currency itself seems crazy when it's hardly used for transactions and mostly owned by crazy rich Asians (great book, btw) who are trying to hide their money from the government and/or living in the Chinese equivalent of late 1800s America and investing willy-nilly in every crazy crypto/railroad scheme that comes along. 

We ended up with a kickass rail system... and most of the investors lost everything in the process. I'd guess crypto will be the same story.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Scortius on October 27, 2017, 10:30:26 AM
I think some of the recent debate brings up a good point. Bitcoin is touted as a currency, hell, coin is part of its name. But, by most definitions of true currency, Bitcoin falls short.  Where it does line up is as a commodity, just like gold. You 'mine' it. It has limited supply. You can exchange it for currency. And, like gold these days, it has little (but some) intrinsic value (compared to a more utilized metal like copper, for example).

Bitcoin has all the hallmarks of what made gold so valuable before the advent of paper currency.  It was difficult to counterfeit, it could be quickly verified as genuine, it was easy to label, and it was relatively liquid and easy to exchange.

To that end, I see something like Bitcoin (or most any other crypto) as eventually mirroring behavior seen in a commodity market. It will be used as a hedge against inflation, possibly a store of value against the destruction of the US economy (although that would pretty much wipe Bitcoin out).  It will have value in allowing black market exchanges and hiding wealth.

The catch then is that the value of Bitcoin becomes heavily tied to consumer confidence in Bitcoin.  There is no 'gold standard', it's not tied to any economy, thus it has the potential to fluctuate wildly with ebbs and flows of consumer speculation and valuation, and yes possibly creating speculation bubbles.

Blockchain technology has some fascinating potential, but Bitcoin itself is just a token. Blockchain isn't some magic formula anymore, and Bitcoin has no 'moat' beyond its current branding and market share. What's to stop some independent nation state from promoting their own blockchain currency using the same formula, but physically backing it with local currency (say, the Cayman Islands, or even Switzerland, which promise to provide a secure and anonymous exchange).  Sure, it would lose some of its value in being only semi-autonomous, but the implementation could be distributed, and backing a new crypto with real currency would increase consumer confidence in this new coin, giving it stability.  Black market players and tax avoiders could continue to operate only in Swiss-coins while legal intermediaries could buy and sell coins and exchange them for cash. Not that this scenario is likely, but one point here is that Bitcoin itself would have zero claim to the value of any other coin as they would be fundamentally decoupled. The value of Bitcoin is only equal to the value the market believes it has.

What about the use of blockchain technology to verify financial transactions, like a digital handshake? Maybe to provide confidence in the validity of a national election in some way.  Once again, Bitcoin has zero claim to capitalize on any new system using the same technology. It only has the value people believe it does. That value could persist for a long long time, or maybe just a long time. But, there is no fundamental backing to it.  At some point something new could come along and the value of Bitcoin could go to zero overnight in a way that physical commodities never could.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 27, 2017, 11:07:25 AM
Why would a blockchain token having a backing tie to some foreign currency be particularly useful?  Just use the foreign currency, they are already digital.

The value crypto brings is in how it is disconnected from any government/nation state and from banks.  It can't be inflated by some government nor confiscated, nor devalued, etc. If you hold the crypto yourself it won't be loaned out by your bank, nor can it be taken out of your account due to legal demand.  Understanding why this is valuable is difficult if you don't have much wealth.  If you don't have much wealth you don't worry about protecting it, moving it, or it being locked down or taken away from you. 

To get a idea what I mean, consider you held several million worth of crypto.  A crypto wallet, including all crypto balances and historical transactions, can be completely encoded by a dozen secret words you can memorize.  So now no matter where you go, those dozen words uniquely control your millions, and nobody else can touch it.  If you get on a plane and fly to another country, when you land your millions went with you, in your head.  You don't have to request a bank to send money to another country, no bank can put a hold on that wealth, no government can confiscate it, and no physical asset had to be shipped.  The other people in the plane had to report even small amounts of cash they were traveling with, your millions already exist everywhere on the planet already.  No other money or asset in the world has that ability.  Crypto is like nothing else.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: runbikerun on October 27, 2017, 11:21:30 AM
"Either you don't understand Bitcoin or you don't understand what a pyramid scheme is."

This is, to put it mildly, an extravagantly dismissive attitude. It's not an exact copy of a pyramid scheme (because if it was, it would be completely illegal), but the characteristics are not too dissimilar. In each case, you're seeing a progressively larger flow of money into a product, fuelled by the gains realised by prior investors, and fuelling a still larger flow of money into the product. There are enough characteristics in common that the comparison isn't unwarranted. It's not as tight a match as with Robert Schiller's description of a bubble, but it's still a reasonable comparison to make.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 27, 2017, 11:30:38 AM
As it stands, if you want to pay for something electronically (with a debit card, we'll leave credit cards out of this) you swipe the card, and then the card processor charges the merchant a fee (~3%) in exchange for transferring the money between you and providing some level of fraud prevention/security.

At some point you start to wonder about the point of having the "currency" part of it at all, if you're just transferring dollars to dollars.

That's part of the problem and one of the very reasons why Bitcoin was created in the first place. This was discussed in the first part of the Bitcoin whitepaper. Financial institutions currently facilitate our transactions on the internet and fraud is rampant. A certain level of fraud in simply accepted and the costs of combating that fraud is very high. Because trust must be placed in a financial institution for transactions, completely non-reversible transaction aren't possible and this is a problem if your business is selling non-reversible services. Furthermore, because of the costs of a system like this (~3% fees), micro-transactions are not economical which prevents the ability to offer services or systems that could benefit from micro-transactions. Bitcoin can offer these benefits along all while preventing massive amounts of online credit card fraud. So even if Bitcoin's only use is to facilitate transactions where both parties simply convert immediately to fiat, there are still a lot of benefits to be had that Bitcoin provides. As an Information Security professional that works directly with PCI compliance, I'd certainly welcome a change such as this to our current system that would help prevent fraud in the financial space. To those that invest in this system and help it become a reality, then I'd be glad to see their financial fortunes benefit as a result.

I think some of the recent debate brings up a good point. Bitcoin is touted as a currency, hell, coin is part of its name. But, by most definitions of true currency, Bitcoin falls short.

Bitcoin has all the hallmarks of what made gold so valuable before the advent of paper currency.

I think part of the problem is that people are simply trying to mold Bitcoin into existing models of currency and assets that they're already familiar with as opposed to just seeing the benefits of Bitcoin as they are and seeing how they can be transformative. Why does Bitcoin need to have all of the criteria of a currency to be a currency and why does Bitcoin need to have all of the benefits of gold to be a store of value?

The way I see it, Bitcoin can be both partly currency and partly store of value and provide something that is the best of both worlds in a whole new type of asset. Gold was great as a store of value throughout history and for a long time was great as a currency. But it isn't very portable and therefore better currencies came along to help us facilitate or daily transactions. Bitcoin, while it may not have the history that gold has as being a store of value, can still be such while being much better as a transactional currency. Meanwhile, our current fiat currencies and the systems that are based on them are adequate at facilitating transactions, but they're horrible as a store of value and history has repeatedly shown that they're, not portable, corruptible, devalued, manipulated, and depending on where you live can be discriminatory. In both of these areas (store of value/medium of exchange) I can see Bitcoin providing a lot of benefits to our world.

In a world that is becoming more and more globally interactive, I see a future for Bitcoin. A friend of mine just left the US to go live in Europe for several months. All he brought with him (financially speaking) is his Bitcoin. Although, he really didn't bring anything with him since Bitcoin is technically just stored on the blockchain. He then just set up and account with a local exchange upon reaching Europe and he's just been exchanging what he needs from Bitcoin as he needs it. You see, Bitcoin is universal and allows people to move anywhere and have their finances travel with them without worry. No one can take his Bitcoin from him as he travels beyond borders. Our current traditional financial system cannot provide this value to people.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 27, 2017, 11:35:44 AM
This is, to put it mildly, an extravagantly dismissive attitude. It's not an exact copy of a pyramid scheme (because if it was, it would be completely illegal), but the characteristics are not too dissimilar. In each case, you're seeing a progressively larger flow of money into a product, fuelled by the gains realised by prior investors, and fuelling a still larger flow of money into the product. There are enough characteristics in common that the comparison isn't unwarranted. It's not as tight a match as with Robert Schiller's description of a bubble, but it's still a reasonable comparison to make.

Bitcoin has the same exact supply/demand economic model as any scarcely limited resource on this planet. To take that very basic economic model and compare it to a fraudulent scheme that requires exponential recruitment of investors into the scheme in order to support itself fails to understand the important differences. So no, I'm not being dismissive when I say that Bitcoin is not a pyramid scheme.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Scortius on October 27, 2017, 11:37:55 AM
Why would a blockchain token having a backing tie to some foreign currency be particularly useful?  Just use the foreign currency, they are already digital.

The value crypto brings is in how it is disconnected from any government/nation state and from banks.  It can't be inflated by some government nor confiscated, nor devalued, etc. If you hold the crypto yourself it won't be loaned out by your bank, nor can it be taken out of your account due to legal demand.  Understanding why this is valuable is difficult if you don't have much wealth.  If you don't have much wealth you don't worry about protecting it, moving it, or it being locked down or taken away from you. 

To get a idea what I mean, consider you held several million worth of crypto.  A crypto wallet, including all crypto balances and historical transactions, can be completely encoded by a dozen secret words you can memorize.  So now no matter where you go, those dozen words uniquely control your millions, and nobody else can touch it.  If you get on a plane and fly to another country, when you land your millions went with you, in your head.  You don't have to request a bank to send money to another country, no bank can put a hold on that wealth, no government can confiscate it, and no physical asset had to be shipped.  The other people in the plane had to report even small amounts of cash they were traveling with, your millions already exist everywhere on the planet already.  No other money or asset in the world has that ability.  Crypto is like nothing else.

Yes, I understand what crypto-currency is.

No, I'm not saying Switzerland runs the crypto-coin, and I especially am not saying that they have access to any type of ledger.  Further, the network is by definition distributed, so a country backing a coin would have no more ability to examine the exchanges than any other independent entity.

You mention your millions, yes they are encrypted and safe in a cold or paper wallet. Now, those millions are coins, not currency.  They are tokens that can be given to other people, but they are not de facto government currency. And yes, I get that this is considered a good thing.

If you want to exchange money, there will be a record if you use foreign currency.  If you exchange crypto-coins backed by a currency, there will still be no record.  The only thing backing means is that the government honors exchanges of coins to their currency at a specific valuation. That provides price stability and intrinsic value. People wanting to avoid operating in a foreign currency can continue to do so.  This is exactly how the US dollar worked while backed by gold. In a vast majority of transactions It was not exchanged for gold, it was exchanged for labor, goods, or other services.  But the fact that it could be exchanged for gold gave consumers confidence in the value of the token they held (which in this case would be a dollar bill or the like).

Since the value of any crypto-coin is heavily tied to the level of market confidence in that coin, it is possible that the value gained by the backing of a coin by a legitimized public entity may outweigh the loss in value the potential coin loses by being tied to a institution.  I'm not saying this will happen, I'm just pointing out a scenario where a new coin is introduced to the market in a new way that might fundamentally undermine the value of a separate coin like Bitcoin. Once again, Bitcoin has no moat beyond its current market share and consumer confidence.  Its market share is a somewhat dangerously recursive valuation, as any loss in market share could lead to a rapid feedback loop of further decreasing consumer confidence and market share.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 27, 2017, 12:01:46 PM
...
The only thing backing means is that the government honors exchanges of coins to their currency at a specific valuation. That provides price stability and intrinsic value.

It provides stability, but not intrinsic value as government currency has no intrinsic value either.  Your entire argument has an underlying assumption that government money is somehow "real" money with "real" value while crypto value is not real, but that's simply not true.  In some ways crypto value is more real than government money value as it came from a global market, not by decree of a single government. Governments and their fiat currencies come and go, global assets (including crypto) are not so transitory.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 27, 2017, 12:37:11 PM
Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.

-W
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 27, 2017, 01:04:47 PM
Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.

-W

Can you clarify what you mean by "something else that produces something"?

There are crypto that pay dividends or some form similiar.

Also, would you say that cryptography itself has or does not have intrinsic value?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 27, 2017, 01:21:48 PM
Crypto would be valuable even if it didn't have intrinsic value, but it's arguable that crypto has intrinsic value.  At its core crypto is digital property that has various uses, including uses that nothing else can do.  Some of the newer cryptos, like ethereum, include an entire programmable environment (smart contracts) that can solve a near infinite number of monetary/legal/contract issues in a cheaper, automated way.  The future for such systems is thought to be as big a deal as the internet was.  These are useful, intrinsic properties that have value and give crypto an intrinsic value. 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 27, 2017, 01:37:21 PM
Crypto would be valuable even if it didn't have intrinsic value, but it's arguable that crypto has intrinsic value.  At its core crypto is digital property that has various uses, including uses that nothing else can do.  Some of the newer cryptos, like ethereum, include an entire programmable environment (smart contracts) that can solve a near infinite number of monetary/legal/contract issues in a cheaper, automated way.  The future for such systems is thought to be as big a deal as the internet was.  These are useful, intrinsic properties that have value and give crypto an intrinsic value.

What I want to say is that cryptography does have intrinsic value. As a math formula codified, it was sold as a technology in the past and sold today as ssl certs. You can't do modern banking and commerce without it. Cryptocurrency is an extension of cryptography in blockchain form. It can function as a currency, but it can also function as fuel or be treated as exchange network, asset, stock, platform, protocol, etc.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Scortius on October 27, 2017, 01:57:08 PM
I think I got off track on the intrinsic value piece. The point I was trying to focus on more was the vulnerability of the value and adoption of any one type of coin to be completely overtaken by another newer coin with some extra feature.  We could argue about the intrinsic value of non-commodity backed national currency like the US dollar (which is backed by the value of the US economy, although susceptible to inflation/deflation), but that's more of a red herring in this context.

Crypto is valuable, extremely valuable. You could definitely make the argument that a system of exchange involving digital coins/tokens/keys/hashes/whatever is valuable. But the value to me seems more in the conceptualization of the distributed process itself and not the actual tokens. This can be seen to some extent in how easily and quickly new coins are popping up. The idea itself is in the public domain, even if your set of Bitcoins are not. What makes Bitcoin more valuable than Dogecoin? Is it the technology or the adoption? I think in the end that is really my question. What forces are out there that will make sure Bitcoin will not be overtaken by Dogecoin, or Etherium, or Litecoin, or Etherium-v2, or whatever the next leap is. Because without that moat, the Bitcoin tokens themselves will only be valuable until the next coin takes over its market share. You can still play the game by keeping a broad portfolio of coins, but with no barrier to entry in the market, I don't see how things will ever stabilize on any one coin to the point where you would feel confident using them as long term speculative investments. If anyone can make their own coin by forking public code repos, there will be no need to be dependent on one type of coin for specific use cases. Thus I don't see how coins can be considered good vehicles for the long-term storage of wealth. But then maybe I'm missing something and you guys can help me out.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 27, 2017, 02:22:19 PM
I could imagine a hypothetical future where cryptocurrency is widely used to settle payments, but the tools for trading in and out of it on both ends are so fast/efficient that the total value of that cryptocurrency only needs to be a few billion to facilitate millions of transactions per day.

Yes, this is sort of where I see it going. As it stands, if you want to pay for something electronically (with a debit card, we'll leave credit cards out of this) you swipe the card, and then the card processor charges the merchant a fee (~3%) in exchange for transferring the money between you and providing some level of fraud prevention/security.

But they *don't* trade your dollars into Visa-Bux and back again to do that. And there's not really a reason that bitcoin/blockchain tech needs to have a "currency" attached to it with *any particular value* in order to facilitate transactions, if both parties just want dollars in the end. All the bitcoin on earth could be worth $500 million and you could use it for exchange that way (dollars instantaneously to bitcoin instantaneously to dollars) or it could be worth $500 quadrillion. Doesn't matter.

At some point you start to wonder about the point of having the "currency" part of it at all, if you're just transferring dollars to dollars.

So while I see the technology being a great thing and possibly a wonderful way to get the vampire squid credit/debit card companies from siphoning 2-3% of the every transaction, I *don't* think that means buying bitcoins (or any other crypto "currency") is a good investment or correlated to the potential of the technology.

So I think we're in agreement about a lot of this. However, I would argue having the currency part actually is important, even if you're ultimately buying and selling in dollars, just because I really can send you bitcoins/ethereum/whatever over the internet without us both needing a trusted third party (like mastercard or western union), whereas if I did want to sent you dollars directly over the internet, we're always going to need some kind of trusted third party, and they're always going to extract the highest fees that they can manage for serving in that role. That's just the inherent nature of dollars.

And of course if I'm buying with RMB, but you want to sell in USD, the importance of an intermediate currency like bitcoin becomes even more important (regardless of the price of an individual bitcoin) since there are currency controls on actually sending RMB out of China.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 27, 2017, 02:31:56 PM
What makes Bitcoin more valuable than Dogecoin?

What makes gold more valuable than silver? People simply value it more. You can argue about gold's industrial uses, but gold was still held in high value long before those industrial uses came along. Personally, I like the look of silver or platinum more in jewelry than gold. Gold is simply valuable because a lot of people place value on it. Because of that value placed on it combined with its scarcity (you can't just go in your back yard and dig some up), it has a lot of value. There are some metals out there that are more scarce, have more industrial function, or even perhaps are better ornamentally, yet gold is still one of the better store of values. Gold historically has no "moat" against other precious metals outside of humans just blindly valuing it for what it is.

The same is true for Bitcoin. There may be better functioning alt-coins out there for specific tasks. There may be better alt-coins out there that are more secure or anonymous. There may be better alt-coins that are technologically or cryptographically better or easier to use. But, they're not better enough to overtake Bitcoin as a store of value. People simply value it more than all other currencies by a lot. Some reasons make sense as to why, some don't. However, unlike gold that is a static element, Bitcoin is not so static. It can be molded through consensus to become what the market needs it to be. There are other alt-coins that are similar enough where specific functionality can be tested within smaller markets to see how they perform and then those very same features can be added to Bitcoin if needed. Bitcoin's market lead along with the fact that new features can and likely will be added will keep Bitcoin as the #1 currency for the foreseeable future.

A new crypto-currency popping up out of the blue is no more of a threat to Bitcoin's value than a new metal being discovered is a threat to gold's value as a precious metal. That's not to say I wouldn't keep a close eye on the market over the next several years to see what's going on in the industry to see what new technology is out there. Anything is possible and if you're just blindly stashing away Bitcoin and turning your back on it, there is always a chance you'll get burned. But, I don't see the threat of other alt-coins as a reason to avoid Bitcoin altogether. I'd merely view other currencies as lively experimentation is a burgeoning new industry; definitely something to keep an eye on.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 27, 2017, 02:45:58 PM
I think I got off track on the intrinsic value piece. The point I was trying to focus on more was the vulnerability of the value and adoption of any one type of coin to be completely overtaken by another newer coin with some extra feature.  We could argue about the intrinsic value of non-commodity backed national currency like the US dollar (which is backed by the value of the US economy, although susceptible to inflation/deflation), but that's more of a red herring in this context.

First off, I agree with your points about the value of crypto being questionable due to new cryptos coming online, forks, etc.  When I first got into crypto there was really just bitcoin and the arguments about bitcoin being "digital gold" seemed quite strong.  However since then there have been thousands of new coins as well as forks of bitcoin itself.  Gold doesn't fork and gold isn't at risk of gold 2.0 coming out next year.  So no, bitcoin is not "digital gold" and crypto is a speculation.  I think it will have a significant role in the future but exactly what the future looks like and what value it will have are unknowns. I'm still interested in participating in the road crypto is traveling, but I'm not fool enough to believe bitcoin (or any crypto) is the end-all-be-all of digital currency value.  I actually think bitcoin is going to lose its lead coin status in the next year or so.

However I disagree with you about the US dollar.  The US dollar is not backed by the value of the US economy in any meaningful meaning of the word "backed."  Governments and their fiat currencies regularly fail despite the country having rich resources and functional economies.  At best you might say the US dollar value is related to the US economy, but unfortunately its more related to how the government manages the currency and its own finances.  The US government can (and IS) going further and further into debt, adding more and more unfunded liabilities, and otherwise walking the path to bankruptcy which very well could one day result in defaults, overhauls of the government, and significant collapse the dollar's value (if not outright destruction of the currency).  However the economy of the US itself can continue on, new government structures and monies can be created, etc.  In short any value and stability of a fiat currency is much more linked to the government making the fiat mandate than the links to economy, resources, military, or other sources.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Scortius on October 27, 2017, 02:56:54 PM
What makes Bitcoin more valuable than Dogecoin?

What makes gold more valuable than silver? People simply value it more. You can argue about gold's industrial uses, but gold was still held in high value long before those industrial uses came along. Personally, I like the look of silver or platinum more in jewelry than gold. Gold is simply valuable because a lot of people place value on it. Because of that value placed on it combined with its scarcity (you can't just go in your back yard and dig some up), it has a lot of value. There are some metals out there that are more scarce, have more industrial function, or even perhaps are better ornamentally, yet gold is still one of the better store of values. Gold historically has no "moat" against other precious metals outside of humans just blindly valuing it for what it is.

The same is true for Bitcoin. There may be better functioning alt-coins out there for specific tasks. There may be better alt-coins out there that are more secure or anonymous. There may be better alt-coins that are technologically or cryptographically better or easier to use. But, they're not better enough to overtake Bitcoin as a store of value. People simply value it more than all other currencies by a lot. Some reasons make sense as to why, some don't. However, unlike gold that is a static element, Bitcoin is not so static. It can be molded through consensus to become what the market needs it to be. There are other alt-coins that are similar enough where specific functionality can be tested within smaller markets to see how they perform and then those very same features can be added to Bitcoin if needed. Bitcoin's market lead along with the fact that new features can and likely will be added will keep Bitcoin as the #1 currency for the foreseeable future.

A new crypto-currency popping up out of the blue is no more of a threat to Bitcoin's value than a new metal being discovered is a threat to gold's value as a precious metal. That's not to say I wouldn't keep a close eye on the market over the next several years to see what's going on in the industry to see what new technology is out there. Anything is possible and if you're just blindly stashing away Bitcoin and turning your back on it, there is always a chance you'll get burned. But, I don't see the threat of other alt-coins as a reason to avoid Bitcoin altogether. I'd merely view other currencies as lively experimentation is a burgeoning new industry; definitely something to keep an eye on.

I'm not sure I agree with a lot of these points.  There are some very specific reasons why gold is more valuable than silver.  Two big ones are that 1) gold is more rare, and 2) it's chemically inert (whereas silver tarnishes for example). In fact, gold is extremely unique in its combination of softness and chemical stability. So right off the bat we have two good predictors on value: rarity and practicality. That does seem to make sense to me.

Bitcoin certainly gets to claim rarity on the grounds that it has a finite supply, but then so does any other crypto coin, so I'm honestly not sure how to factor that in. As for practicality, again it's hard to measure how Bitcoin directly compares to other coins as the comparison may be use-case dependent. But, you do see effects like Etherium (which maybe should be called Bitcoin-v2) coming out of nowhere and claiming a significant market share due to perceived practicality improvements.

And that's the thing. You mention that Bitcoin is not so static, but I look at it and see it as being very static. A coin is a token that can be anonymously exchanged with a way to verify the exchange. There are going to be a fixed number of coins, and that's that. I don't get this idea of it 'becoming what the market needs it to be'.  They are what they are, and that's a secure distributed system for the validated exchange of tokens. But, anyone can pretty much on a whim fork/clone the code and create their own parallel system decoupled from the valuation of any other system.

And yes, I agree that most of Bitcoin's value is due to it being first-to-market, but if that's the main reason it's worth over 1,000 times more than equivalent (or even functionally superior) alt-coins, I don't see how that represents a stable system over a significant number of years. If at any single point in the near or distant future Bitcoin starts to lose market share to an emerging new technology, there will be nothing to stop its value from plummeting due to this feedback loop of its value being tied to its market share.  If everyone's jumping to Super-coin and Bitcoin's market share starts dropping, who's going to be sitting there willing to buy Bitcoins at their current price when the value of Super-coin is exploding and there's possible reason to thing that Bitcoin will be come a completely outdated dominated implementation of the next big crypto-currency? If consumer confidence starts declining, the value of a Bitcoin could evaporate in a cloud of smoke as hoarders make a 'run on the bank' and try and offload their inventory in exchange for The Next Big Thing.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 27, 2017, 06:29:58 PM
I'm not sure I agree with a lot of these points.  There are some very specific reasons why gold is more valuable than silver.  Two big ones are that 1) gold is more rare, and 2) it's chemically inert (whereas silver tarnishes for example). In fact, gold is extremely unique in its combination of softness and chemical stability. So right off the bat we have two good predictors on value: rarity and practicality. That does seem to make sense to me.

Bitcoin certainly gets to claim rarity on the grounds that it has a finite supply, but then so does any other crypto coin, so I'm honestly not sure how to factor that in. As for practicality, again it's hard to measure how Bitcoin directly compares to other coins as the comparison may be use-case dependent. But, you do see effects like Etherium (which maybe should be called Bitcoin-v2) coming out of nowhere and claiming a significant market share due to perceived practicality improvements.

And that's the thing. You mention that Bitcoin is not so static, but I look at it and see it as being very static. A coin is a token that can be anonymously exchanged with a way to verify the exchange. There are going to be a fixed number of coins, and that's that. I don't get this idea of it 'becoming what the market needs it to be'.  They are what they are, and that's a secure distributed system for the validated exchange of tokens. But, anyone can pretty much on a whim fork/clone the code and create their own parallel system decoupled from the valuation of any other system.

And yes, I agree that most of Bitcoin's value is due to it being first-to-market, but if that's the main reason it's worth over 1,000 times more than equivalent (or even functionally superior) alt-coins, I don't see how that represents a stable system over a significant number of years. If at any single point in the near or distant future Bitcoin starts to lose market share to an emerging new technology, there will be nothing to stop its value from plummeting due to this feedback loop of its value being tied to its market share.  If everyone's jumping to Super-coin and Bitcoin's market share starts dropping, who's going to be sitting there willing to buy Bitcoins at their current price when the value of Super-coin is exploding and there's possible reason to thing that Bitcoin will be come a completely outdated dominated implementation of the next big crypto-currency? If consumer confidence starts declining, the value of a Bitcoin could evaporate in a cloud of smoke as hoarders make a 'run on the bank' and try and offload their inventory in exchange for The Next Big Thing.

Bitcoin's scarcity doesn't just come from the limited number of coins that are programmed into the code. It's scarcity comes from the network itself. There is a massive amount of proof-of-work that went into mining the coins that are in existence today just like there was a massive amount of work that went into mining gold from the ground. It isn't just scarcity that matters when determining the value that humans place on a limited supply commodity, it is also the amount of work it took to get that commodity into existance and the amount of work it will take to create more. This is why alt-coins don't pose as much of a threat to Bitcoin. Sure, other coins can just come along and appear out of no where, but they won't have the same amount of proof-of-work or hashrate behind them and therefore they won't equate to the same amount of value and rarity that Bitcoin possesses. The computing power that is a part of the Bitcoin network is more power than the top 600 supercomputers combined. This provides a huge amount of resistance to attacks and adds to the security of the network. It also ensures that Bitcoins that are being mined require a sufficient amount of proof-of-work to justify their value that the market puts on them. This is why just any alt-coin that gets created today won't have the same amount of value placed on it by investors. It takes something like $50 billion dollars to try and create one fraudulant Bitcoin. Bitcoin is completely resistant to counterfeiting. That is something that almost no other physical commodity can make a claim to. Not only is Bitcoin an established crypto-currency from a community and industry point of view, it is also an established network from an infrastructure point of view.

Bitcoin is not static. It has been changed and upgraded several times. It has weathered forks. Segregated Witness, which was a feature added to Bitcoin a couple months ago, allows for other overlay networks on top of Bitcoin that will ensure that it remains flexible enough in the future for additional functionality without necessarily the need for hardforks. Smart Contracts are also a possibility. So no, I don't think Bitcoin is as static as you make it out to be. However, one thing is certain, it requires consensus in order to change. That means that it won't change unless the entire network (or an overwhelming majority) agrees to it. That's the glory of a decentralized network like this. The overlay networks that are added on top of Bitcoin (like the Lightning Network) are completely opt-in. Therefore, you can still use Bitcoin just as it always was while allowing users who choose so to take advantage of additional functionality all on top of the stable and secure network that Bitcoin has established itself as. This not only will add more and more value to Bitcoin, but provides a huge amount of resistance to other crypto-currencies from overtaking Bitcoin as the dominant coin.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 28, 2017, 11:28:36 AM
Here's some advice from someone who reached FI using crypto.

What To Do

- Don't spend more than you can afford to lose
- Know what you are buying and why
- Make your purchase
- Move to a paper wallet (or similar offline wallet)*
- Store offline wallet in a safety deposit box or other secure location where you won't be tempted to move the coins without good reason
- Hold
- Sell only when your target is reached, or if something significant and fundamental in the investment or situation changed
- Keep good records and pay your taxes

* If you don't know how to make a paper wallet safely you're probably not technically savvy enough to be in crypto

What Not To Do

1) Do not leave coins on exchanges.  Exchanges have a large number of risks.  All the following have happened...  Funds can be stolen by hackers or insiders. Funds can be lost by error or incompetence. Exchanges and funds can be seized by governments (for money laundering or whatever). These risks are real--even by 2014 (the last time I checked) half of all exchanges had failed or lost funds somehow.  The exceptions to this are if you're not technically competent to secure your own crypto (in which case you shouldn't be in crypto), or if you worry about being able to prove source of funds later (see #3). In that case accept the risk of loss and leave on the exchange, but don't touch!

2) Do not trade.  To trade you'll have to leave funds on exchanges, see (1).  If you trade you will almost surely do worse than just holding, usually much worse.  If you trade and somehow manage to make an overall gain, taxes (which will be a pain-in-the-ass to figure out) will eat up a huge chunk of that gain, again making you make less than you would've just holding.  I know a lot of people who were in crypto early and very few of them have actually made what they should have due to not following (1) and (2).

3) Avoid "anonymous" crypto.  Using anonymous crypto makes proving source of funds difficult or impossible.  If you actually succeed in your goal and make a lot of wealth in crypto, yet you cannot show source of funds, you'll find it very difficult to convert back to fiat.  Many exchanges that convert to fiat don't want to deal with you if have a lot of crypto and you can't show source of funds.  You could be a drug dealer as far as they know and they don't want to be shut down for laundering money so they will just refuse to deal with you.  Taxes potentially become more difficult also. 

4) Avoid anonymizing services, gambling sites, darknet, etc. for the same reasons as (3). Also there are additional risks in that you might not get your money back, and these services attract criminals and such.  You don't want to be associated with potentially illegal uses of crypto.  Exchanges that convert crypto to fiat have to be very careful not to deal with criminals.  These exchanges can and do examine crypto movement of customers and will refuse to convert your crypto into cash or even lock your account and funds if they see shady usage. 

5) Avoid the "investments" that constantly pop-up in crypto. Most of these don't end well.  Besides, crypto is the breakthrough, potentially world changing technology, not whatever these companies are offering.  Especially avoid shady, or anonymous businesses for risks of (1,3,4) beyond the other obvious reasons.

Does anyone have further advice?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 28, 2017, 11:47:31 AM
Does anyone have further advice?

2. If you do trade, distinguish between your longterm hodl and trade stacks. Your trade stack should be no more than 5-10% of your hodl stack. Don't margin trade.

Crypto is still early phase, and it's not user friendly in terms of security. Learn about security. At the very least use a fresh install on a brand new, nonrefurbished device for crypto related activies (this can also apply mutally to banking and other sensitive-info services). A linux bootable disk can also suffice. For longterm storage, use ledger or encrypted usbs, with multiple copies of private key/seed/phrase.



 
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on October 28, 2017, 02:14:59 PM
"Either you don't understand Bitcoin or you don't understand what a pyramid scheme is."

This is, to put it mildly, an extravagantly dismissive attitude. It's not an exact copy of a pyramid scheme (because if it was, it would be completely illegal), but the characteristics are not too dissimilar. In each case, you're seeing a progressively larger flow of money into a product, fuelled by the gains realised by prior investors, and fuelling a still larger flow of money into the product. There are enough characteristics in common that the comparison isn't unwarranted. It's not as tight a match as with Robert Schiller's description of a bubble, but it's still a reasonable comparison to make.

isn't that an exact description of the stock market?  if you own VTSAX or any other index fund you're not researching individual companies.  most of the return on stocks is simply waiting for someone else to come along and buy it from you later for a higher price than you paid.  dividends of course result in the proportional reduction of the share price so those don't count as returns.  the price/book ratio of the s&p 500 is over 3.0, so don't tell me you're gladly purchasing something for more than 3x the "intrinsic value".  you buy stocks because you hope buyers will be there when you go to sell 4% of your shares every year.


Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.

-W

is a 24/7 global, secure, cheap, fast, censorship-resistant payment network not producing value?  are visa, paypal, and western union valueless as well?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on October 28, 2017, 02:23:48 PM
Does anyone have further advice?

great advice in that post.

i would add:
-do not sell more than 5% of your holdings in any given year even if everyone is shouting about bubbles, tops, and tulips.  this applies to blockchain forks as well.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 28, 2017, 02:31:39 PM
MystryBox, a good set of advice. I'm not sure about #3 on the what-not-to-do list just because I think assumed anonymous nature of cryptocurrencies was one of the things that got people really excited about bitcoin in the early days (before people realized how straightforward it would often be to link an anonymous "wallet" to a particular person). So I still think the anonymous cryptocurrencies are likely candidates if there ever is a significant switch from bitcoin to something else.

That said, even if I'm right about that, you certainly raise a very valid point about the difficulty of getting money back out of crypto without looking like a potential drug dealer if you've got a lot of money sitting in monero or zcash (or whichever other anonymous coins are out there).

Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.

-W

is a 24/7 global, secure, cheap, fast, censorship-resistant payment network not producing value?  are visa, paypal, and western union valueless as well?

I cannot speak for Walt, but I certainly think the bitcoin network and the ability to send payments all over the world is producing value. But the folks who produce that value (and get paid for it) are the miners, not the folks who hold bitcoin. Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on October 28, 2017, 02:55:34 PM
Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.

i don't know how Ethereum's PoS will work but i imagine it would have to somehow involve spending money on electricity and computer hardware to process transactions and store the blockchain -- therefore a nonzero input to keep generating value via the payment network.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 28, 2017, 03:08:30 PM
It's been a long time since I've updated on my ZEC mining experiment.* I stopped updating because the capital appreciation on the fees from ZEC mining which I was holding in bitcoin was going up so fast that it really dwarfed the financial effects of continuing to mine. But my mining rig has continued to chug away in the corner of my basement the last couple of months, so I thought I'd pull together an update.

The last data in my records is from August 18th, 2017, at which point I had climbed out of the ~$1,400 cost of setting up my rig and was up ~$800 (so total gain of approx. $2,200) based on ~$550 of mining income with the rest coming from capital appreciation. Two months later I'm up to ~$1,700 net (so total gain ~$3,100), with mining income at ~$750. I don't have detailed records for the last two months, but whenever I've checked my rig has been pretty consistently pulling in $100/month (~3x the cost of the electricity). People seem to have mostly stopped talking about investing in mining hardware (or maybe it's just an artifact of which forums I do or don't frequent), which is consistent with the profit from mining being a lot more stable.

(https://i.imgpile.com/nMmZwu.png) (https://imgpile.com/i/nMmZwu)

All in all, I may still break even on the cost of hardware from mining fees at some point. I certainly did end up making money as the result of this experiment, but it was from an unconsidered side effect of my plan (holding more cryptocurrency), not the actual thing I set out to do (turn a profit from setting up a bunch of GPUs in my basement).


*Original details here on the first page of the thread. (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1600715/#msg1600715). Details on power usage here on the second page. (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1610593/#msg1610593)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 28, 2017, 03:26:37 PM
Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.

i don't know how Ethereum's PoS will work but i imagine it would have to somehow involve spending money on electricity and computer hardware to process transactions and store the blockchain -- therefore a nonzero input to keep generating value via the payment network.

Agreed, but the vast majority of the current computer hardware and energy usage from cryptocurrencies that use proof of work (basically all the big ones everyone has heard of right now) isn't spent on storing the blockchain or communicating about transactions, it is spent on what is essentially a security measure to prevent people from rewriting the blockchain (churning away at asymmetrically hard math problems).

In proof of stake you probably still need to have a computer running in order to help mine (or do they call it minting with PoS?), but you don't get extra minting/mining rewards from having extra more computers/CPUs/GPUs/ASICs only from owning more of the currency and being willing to stake that currency on not allowing invalid transactions to go forward.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Scortius on October 28, 2017, 05:16:46 PM
Just wanted to chime in and say thanks for the comments. While I do feel that crypto could be hanging on a speculation bubble, I truly am excited about the possible applications of the underlying technology, especially in areas beyond basic currency exchanges. I'll certainly be keeping my eyes on things and the technology continues to progress.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 28, 2017, 06:12:25 PM
MystryBox, a good set of advice. I'm not sure about #3 on the what-not-to-do list just because I think assumed anonymous nature of cryptocurrencies was one of the things that got people really excited about bitcoin in the early days (before people realized how straightforward it would often be to link an anonymous "wallet" to a particular person). So I still think the anonymous cryptocurrencies are likely candidates if there ever is a significant switch from bitcoin to something else.

I would've agreed with you in the past, but after some direct experience cashing out a non-trivial amount of crypto my view has changed.  Fully anonymous crypto are sure to be used for transactions, especially on the darknet, but as an investment I don't think they will ever be very big.  I could be wrong, but here's my thinking:
- Exchanges are likely to run into regulatory issues converting them to fiat in large amounts in many countries.
- I suspect large institutional traders and hedge funds will avoid them precisely because of the anonymous factor/darknet-link and the above exchange issues.  Value won't go very far without larger traders buying.

I think cryptos that are normally traceable but can have anonymization when needed (like eth and bitcoin will eventually support) are better investments than a fully anonymous crypto.  JMO.

Quote
That said, even if I'm right about that, you certainly raise a very valid point about the difficulty of getting money back out of crypto without looking like a potential drug dealer if you've got a lot of money sitting in monero or zcash (or whichever other anonymous coins are out there).

I would recommend if you invest in anonymous cryptos and expect significant gains, you should leave them on the exchange.  Then when it is time to sell there is no question about where they came from.  These concerns are only for significant amounts of crypto.  And if you have a lot of crypto you can run into other problems like hidden caps that some exchanges have on fiat movement, even if source of funds isn't a problem.  For example I believe Kraken has an annual limit where even for highest tier customers it would take you literally 10 years to cash out of a million dollars worth of crypto off the exchange.  So make sure your exchange will actually handle the value you expect to end up with.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 28, 2017, 08:06:03 PM
Thanks! I certainly don't have direct experience cashing out large sums of cypto (anonymous or otherwise) so it's great to hear from someone who has gone through the process recently and seen where the potential snags are.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Bicycle_B on October 28, 2017, 09:49:29 PM
Maizeman, I continue to love the clarity and reliability of your mining reports. 

MystryBox, welcome to the forum.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 29, 2017, 08:25:02 AM
The most recent Bitcoin difficulty change was pretty significant. It dropped my daily BTC earning from about .00185 to about .00146. Back when I first got this rig in July I was earning about .00269. So it has dropped by almost half in about 3 months. Luckily the price has skyrocketed since then as well. I believe I'll still be profitable with my mining for the foreseeable future, but the difficulty has risen significantly with all the recent BTC price increases. I'm curious to see how the hashrate responds if the 2X fork ends up going through. I'm torn, I think the 2X fork is wreckless and poorly executed because it doesn't have replay protection, but I wouldn't mind seeing some hashrate go to another chain to allow BTCs difficulty to go down or at the very least hold steady for a while.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 29, 2017, 08:40:06 AM
That's a good point, lifeanon. I should have specified that, stated in dollars, my mining income has been relatively constant. However, since the price of bitcoin in dollars has increased over that time period, stated in bitcoin, my mining income has continued to decline over the last several months.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 29, 2017, 09:29:33 AM
I'm torn, I think the 2X fork is wreckless and poorly executed because it doesn't have replay protection, but I wouldn't mind seeing some hashrate go to another chain to allow BTCs difficulty to go down or at the very least hold steady for a while.

The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Full-Life on October 29, 2017, 09:48:03 AM
How do you manage your Crypto-Currency Portfolios?

On the basis of market capatilization I'm planning to invest in the top 5 crypto currencies and to rebalance every month.
Like a typical passiv index fonds. What is a cheap and simple way to do this? 

PS. I haven't read every post in this threat, only the first pages and couldn't find an answer.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on October 29, 2017, 10:00:00 AM
How do you manage your Crypto-Currency Portfolios?

On the basis of market capatilization I'm planning to invest in the top 5 crypto currencies and to rebalance every month.
Like a typical passiv index fonds. What is a cheap and simple way to do this? 

PS. I haven't read every post in this threat, only the first pages and couldn't find an answer.

If you're trying to replicate a cap weighted index fund you shouldn't be doing any rebalancing at all. In addition, rebalancing every month would either mean losing an awful lot in transaction fees or keeping your cryptocurrency at an exchange, which is a very bad idea.

I'd highly suggest reading MystryBox's post on the previous page (https://forum.mrmoneymustache.com/investor-alley/official-crypto-currency-portfolios-and-discussion/msg1750281/#msg1750281) about things to do and things not to do when investing in cryptocurrencies before you actually spend any money.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Full-Life on October 29, 2017, 10:12:52 AM
Thanks for the link. These are exactly the information what  I need Very informative. Especially the taxation and changing to firat currencies.

I'm planing to invest every month 100,-€ in crypto currencies. Money that doesn't hurt me if lost. Rebalancing for me would mean to buy to rebalance and to sell only if the currencies is not in the top 5 anymore.

How do you recommend to invest constantly passiv in crypto currencies?

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 29, 2017, 11:08:39 AM
How do you manage your Crypto-Currency Portfolios?

On the basis of market capatilization I'm planning to invest in the top 5 crypto currencies and to rebalance every month.
Like a typical passiv index fonds. What is a cheap and simple way to do this? 

PS. I haven't read every post in this threat, only the first pages and couldn't find an answer.

I would encourage you to read through the entire post. You may find useful information.

I self-manage. However, trusted names in the passive index fund space are Iconomi and Prism, with fees. Both sites should also give you the ability to pick and choose.

Security wise, I would also recommend a new, nonrefurbished device exclusively for crypto related activities and websites (don't use it for normal web browsing); or boot off a linux disk.





Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 29, 2017, 11:21:58 AM
I'm torn, I think the 2X fork is wreckless and poorly executed because it doesn't have replay protection, but I wouldn't mind seeing some hashrate go to another chain to allow BTCs difficulty to go down or at the very least hold steady for a while.

The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).

I've been observing the space before my mmm account age. It's highly political. Both sides are not without blemish and information distortion. However, I believe core is the greater evil.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 29, 2017, 12:20:25 PM
The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).


I've been observing the space before my mmm account age. It's highly political. Both sides are not without blemish and information distortion. However, I believe core is the greater evil.


I'm going to have to disagree here. Every fork should have replay protection of some form implemented to protect the user base and their money. If a hard fork is implemented with replay protection and it has enough community support, then the value, the name of Bitcoin, the community, hashrate, and all will follow it. If there is a fork and non of those things follow, then the community has spoken that the fork is not Bitcoin. Implementing a fork without replay protection should be seen as an attack on Bitcoin itself since it is trying to accomplish altering Bitcoin without consensus. Luckily support for 2X has been declining rapidly lately. Unfortunately, if 2X still goes forward, there is still the risk of fraudulent transactions due to no replay protection.

The Core development team isn't evil, they're conservative and I'm greatful for that since I have money in Bitcoin. It is what has made the Bitcoin network as stable as it is. SegWit was just activated and there needs to be time given to see how that impacts the network before implementing additional changes. As far as fees go, most of the high fees are actually due to poor wallet fee estimation. Most wallets that don't allow the user to directly specify a fee use fee algorithms that way overestimate what fee should be used for a transactions. Luckily, this has also been changing lately as many popular wallets are now allowing the user to specific fee rates. At the moment I can send transactions consistently for 20-30 Satoshis per byte which is very low. This is without SegWit even being widely utilized yet. Implementing a irreversible hardfork to increase the blocksize to 2MB when it isn't necessary yet and to do so without implementing replay protection is wreckless.

B2X is already being listed by most exchanges as different than BTC, so continuing forward in order to capture the Bitcoin name is futile since they attempted to do so without community support.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 29, 2017, 12:28:54 PM
The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).


I've been observing the space before my mmm account age. It's highly political. Both sides are not without blemish and information distortion. However, I believe core is the greater evil.


I'm going to have to disagree here. Every fork should have replay protection of some form implemented to protect the user base and their money. If a hard fork is implemented with replay protection and it has enough community support, then the value, the name of Bitcoin, the community, hashrate, and all will follow it. If there is a fork and non of those things follow, then the community has spoken that the fork is not Bitcoin. Implementing a fork without replay protection should be seen as an attack on Bitcoin itself since it is trying to accomplish altering Bitcoin without consensus. Luckily support for 2X has been declining rapidly lately. Unfortunately, if 2X still goes forward, there is still the risk of fraudulent transactions due to no replay protection.

The Core development team isn't evil, they're conservative and I'm greatful for that since I have money in Bitcoin. It is what has made the Bitcoin network as stable as it is. SegWit was just activated and there needs to be time given to see how that impacts the network before implementing additional changes. As far as fees go, most of the high fees are actually due to poor wallet fee estimation. Most wallets that don't allow the user to directly specify a fee use fee algorithms that way overestimate what fee should be used for a transactions. Luckily, this has also been changing lately as many popular wallets are now allowing the user to specific fee rates. At the moment I can send transactions consistently for 20-30 Satoshis per byte which is very low. This is without SegWit even being widely utilized yet. Implementing a irreversible hardfork to increase the blocksize to 2MB when it isn't necessary yet and to do so without implementing replay protection is wreckless.

B2X is already being listed by most exchanges as different than BTC, so continuing forward in order to capture the Bitcoin name is futile since they attempted to do so without community support.

We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: waltworks on October 29, 2017, 12:45:31 PM
Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?

Sounds sort of a like... government.

-W

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 29, 2017, 12:51:38 PM

We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.

I'm with you.  Nothing stated in all that had any basis in reality, but I'll just shut my mouth.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 29, 2017, 12:56:48 PM
We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.

That's fine. This thread is one large debate regarding Bitcoin and crypto-currencies, so I don't think discussing the technical and logistical aspects of Bitcoin and its various forks necessarily needs to be political or negative. But, I don't think you avoided anything by calling Bitcoin core the "greater evil" either.   ;-)

Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?

Sounds sort of a like... government.

-W

Haha, well depending on how the 2X fork goes, they could be shown to be fully answerable. Time will tell.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: JAYSLOL on October 29, 2017, 01:43:09 PM
Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?

Sounds sort of a like... government.

-W

Can I just say how much I love your posts
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 30, 2017, 11:38:41 AM
I figured I'd post this for all the crypto lovers here to maybe stoke some even more love you all have for the promise of crypto-currencies. It is an old article (2010) related to the 2008 global financial crisis that I saved to refer back to when I want to be reminded of the blatant fraud that occurs on Wall Street and the promise the crypto-currencies could bring to the table by being counterfeit proof. The article is still relevant today though. It is when I read articles like this that I get really excited about crypto-currencies and how they can help fix our broken economy and help revolutionize our financial sector. It is an excellent read from Rolling Stone if you haven't read it before. It isn't just the US economy that operates like this either, it is the entire world economy that operates on a counterfeit and fraudulent basis.

https://www.rollingstone.com/politics/news/wall-streets-naked-swindle-20100405 (https://www.rollingstone.com/politics/news/wall-streets-naked-swindle-20100405)

If anyone ever tells you that Bitcoin or crypto-currencies are in a bubble, just have them read this article. When you can have 12 paper oil barrels trading for every 1 physical oil barrel, then it isn't Bitcoin that should be worried about a bubble. Our whole economy is based on counterfeit trading.

The fact that Bitcoin is counterfeit proof gives it a leg up on the rest of the economy. At least the Bitcoin I own I know are real and legitimate Bitcoin.

That being said, I'd imagine that once derivatives trading starts becoming more popular with Bitcoin, then those derivatives would likely be vulnerable to the same counterfeiting which is why it is always good advice to just invest and hold directly in Bitcoin and not in any derivative markets.

Enjoy the read and go buy some Bitcoin!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MystryBox on October 30, 2017, 02:06:09 PM
The fact that Bitcoin is counterfeit proof gives it a leg up on the rest of the economy. At least the Bitcoin I own I know are real and legitimate Bitcoin.

That being said, I'd imagine that once derivatives trading starts becoming more popular with Bitcoin, then those derivatives would likely be vulnerable to the same counterfeiting which is why it is always good advice to just invest and hold directly in Bitcoin and not in any derivative markets.

Too bad core, who you seem to love, is busy killing the original design of bitcoin and turning it into a settlement system that they will then use to power higher level derivative networks like sidechains and lightning.  I had a big argument with nullc (Greg Maxwell) a few years back about how they were moving away from the "digital property" breakthrough that bitcoin achieved to create a bunch of derivatives on top of bitcoin which would start right down the same road of the mainstream financial system.  He didn't care, he's never cared about those aspects of bitcoin.

Their entire refusal to increase the blocksize is not what they claim, it is to obsolete the old bitcoin model and force any new usage into newer derivative technologies (which they of course profit from).   So why bother posting about how great those attributes of bitcoin are when you are cheering the group that is killing those attributes?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 30, 2017, 04:01:43 PM
Too bad core, who you seem to love, is busy killing the original design of bitcoin and turning it into a settlement system that they will then use to power higher level derivative networks like sidechains and lightning.  I had a big argument with nullc (Greg Maxwell) a few years back about how they were moving away from the "digital property" breakthrough that bitcoin achieved to create a bunch of derivatives on top of bitcoin which would start right down the same road of the mainstream financial system.  He didn't care, he's never cared about those aspects of bitcoin.

Their entire refusal to increase the blocksize is not what they claim, it is to obsolete the old bitcoin model and force any new usage into newer derivative technologies (which they of course profit from).   So why bother posting about how great those attributes of bitcoin are when you are cheering the group that is killing those attributes?

Wow, MystryBox, you're very antagonistic. First you comment about how my post has no basis in reality (without actually refuting anything), then you comment about how you're going to instead keep quiet on the matter. Then you follow that up with another aggressive post and tell me not to bother posting things about the merits and benefits of Bitcoin as if somehow I'm not a big believer and proponent of the tech.

First off, if you look through this thread and others on this forum, you'll see I am a big advocate of Bitcoin and its capabilities. I'm a firm believer in all that Bitcoin stands for...decentralization, cryptography, open source, consensus, deflationary, etc.

Second, I never said that I love Bitcoin core, I said that they're not evil. For the record, I do support increasing the block size, just not right now and certainly not with the awful SegWit2X implementation that has no active development behind it and doesn't implement replay protection properly. Support for the 2X fork in November has been crumbling lately. Tell me, what defense do you have for any hardfork that doesn't implement replay protection?

Third, increasing the block size is not a scaling solution. If we want Bitcoin to be usable as a medium of exchange, it needs to go beyond just 7 tx/sec (1MB blocks), 14 tx/sec (2MB blocks), or even 55 tx/sec (8MB blocks). Those are not scaling solutions. Bitcoin as it is designed will never be capable of processing transactions at the same rate that VISA is capable of if we're trying to just stick with on-chain transaction blocks. I agree that we absolutely need to increase the block size in order to increase the number of on-chain transactions, but using that as a scaling solution in hopes that it will continue to support the growing demands of all transaction is not going to work. Unless we find a way to move transactions off-chain, then Bitcoin can't scale to what we all want it to become. That is, I would love for a day to come where I can purchase a drink with Bitcoin.

Fourth, that doesn't even touch on the fact that in order for the network to be able to support transaction rates that high, the network would end up being much more centralized. Which out of all properties for Bitcoin, its decentralized nature is probably one of the most important to have come from Satoshi's original whitepaper. It is extremely important for Bitcoin to remain decentralized. At the moment, my Bitcoin node taxes my home network a lot. It took almost a week to download the whole chain. But, it isn't storage that I'm concerned about. I can always purchase additional storage, that's cheap and always getting cheaper. However, the bandwidth that my node uses is a lot and if the block size were to increase much more, then that would probably make it so that I wouldn't be able to host my own node in the very foreseeable future.

Also, sidechains are completely opt-in. No one is forced to use them. That's why SegWit was implemented with a UASF. Bitcoin as it is today is and can still be used the same as it was previously. If a production Lightning Network goes live, no one has to force you to use it. Those who choose to can however. The settlement still happens on the Bitcoin blockchain however and therefore the Lightning Network is still backed by the same verifiable and counterfeit proof Bitcoin blockchain. Explain to me how the Lightning Network is a derivative of Bitcoin as you say? The Lightning Network still settles in Bitcoin. When payment channels close, they're confirmed on the Bitcoin blockchain and payment channel transactions are multisig between the parties involved, so either party can broadcast the transaction in the event of a dispute. I'm not saying that Lightning Network is perfect. I don't like how payment channels need to be constantly monitored, for example. But it isn't a derivative and it is a much longer term scaling solution than simply increasing the blocksize.

Finally, I just wanted to add (I touched on this earlier) that one of Bitcoin's highest risks come from other capable cypto-currencies taking its place as the number one currency and making Bitcoin obsolete. Crypto-currencies are constantly coming up with new ideas and features. There aren't many ways that I could see Bitcoin ever going to $0, but one of those ways that I could see it happening is if a better currency came along to take its place. I believe sidechains will have greatly reduced that risk of ever occuring. They allow Bitcoin to be much more responsive to what the market needs it to be. If Bitcoin requires vastly higher transaction speeds to meet demand or micro-transaction capability, then sidechains will allow for that to occur, thus keeping the value of POS transactions strictly on the Bitcoin network as opposed to having that use-case go to another competitive currency.

Anyway, I just wanted to clear the air. I don't like it when people attempt to call me delusional without at least giving me the courteousy of telling me why the think so. If you want to have a debate with me, go ahead and do so. I'm capable of having a debate based on information without the need to be antagonistic or aggressive.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on October 30, 2017, 07:30:24 PM
First off, if you look through this thread and others on this forum, you'll see I am a big advocate of Bitcoin and its capabilities. I'm a firm believer in all that Bitcoin stands for...decentralization, cryptography, open source, consensus, deflationary, etc.

you are certainly an awesome advocate and you know your stuff.  i am debating with myself whether or not to reply to your individual points -- but what the hell.  this isn't r/bitcoin -- so we can have a debate!  in fact, the exact same debate that's been had zillions of times since blocks have been full.

Quote
I do support increasing the block size, just not right now...

blocks have been full for a while -- it should have never even got close to this point.  the block size limit should have been doubled to 2MB years ago, and probably doubled again at least once more by now.  even if monetizing sidechains or the lightning network is the surreptitious goal, you need to raise the block size for it all to work.

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Third, increasing the block size is not a scaling solution ... Bitcoin as it is designed will never be capable of processing transactions at the same rate that VISA is capable of.

VISA levels of tx/sec is a straw man argument.  no one is trying to get that to work at this point.  2MB-8MB blocks are more than enough for the next few years.

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Fourth, that doesn't even touch on the fact that in order for the network to be able to support transaction rates that high, the network would end up being much more centralized. Which out of all properties for Bitcoin, its decentralized nature is probably one of the most important to have come from Satoshi's original whitepaper.

the original unmodified white paper mentions that "server farms" would be nodes, not individual users.  most folks don't run their own email server or web server, yet the internet remains decentralized.

also, the lightning network by design relies on centralization.  if you're concerned the peer-to-peer qualities of bitcoin are at risk then you should be against the current lightning network proposals.

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Also, sidechains are completely opt-in. No one is forced to use them... the Lightning Network is still backed by the same verifiable and counterfeit proof Bitcoin blockchain

sidechains are not opt-in if the block size is 1MB and you're in a bidding war to even get your tx in a block.

the lightning network destroys the original alignment of incentives that give us the incredible security of the today's bitcoin mining network.  if fewer people can make on-chain transactions, and the block reward has been halved a few times, why would the miners even mine any longer?

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sidechains ... allow Bitcoin to be much more responsive to what the market needs it to be.

so do hard forks.  any feature could be added to bitcoin.  bitcoin's supposed to be a honey badger, not a deer in the headlights.  increasing the block size limit to 2MB-8MB by the way isn't a "feature" -- it's a much simpler change than that: it allows bitcoin to perform the same way it's performed since 2009.

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If you want to have a debate with me, go ahead and do so. I'm capable of having a debate based on information without the need to be antagonistic or aggressive.

i think we're all on the same page with that here.  agreed.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 30, 2017, 08:23:14 PM
you are certainly an awesome advocate and you know your stuff.  i am debating with myself whether or not to reply to your individual points -- but what the hell.  this isn't r/bitcoin -- so we can have a debate!  in fact, the exact same debate that's been had zillions of times since blocks have been full.

I enjoy good debates, so I certainly welcome any counterpoints and am an open-minded individual.

Quote
blocks have been full for a while -- it should have never even got close to this point.  the block size limit should have been doubled to 2MB years ago, and probably doubled again at least once more by now.  even if monetizing sidechains or the lightning network is the surreptitious goal, you need to raise the block size for it all to work.

The mempool was completely empty this week, so that would go against the argument that the current blocksize is not sufficient to handle the current transaction rate demanded of the network. The mempool backup that occurred over the summer was due to a lot of transaction spam in an effort to push support for a blocksize increase. Furthermore, Segwit is a 2MB blocksize increase without demanding 2MB of per block data of the Bitcoin network.

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VISA levels of tx/sec is a straw man argument.  no one is trying to get that to work at this point.  2MB-8MB blocks are more than enough for the next few years.

It isn't a strawman argument if it is constantly called into question the idea that Bitcoin is being moved in a direction that is against Satoshi's original vision. That vision was to have Bitcoin be a peer-to-peer payment network that would be a direct competitor against current payment networks like VISA that charge 3% fees to merchants. If Bitcoin is to truly be a competitor to that, then it needs to scale way beyond just 60 tx/sec. That's especially true if the adoption rate kicks into high gear and becomes exponential again like it did this year. You talk about how the blocksize should been increased long ago. That can certainly be argued, but how can that be argued now and at the same time not argue for looking further down the road again and see the writing on the wall that Bitcoin might not be up to the task of handling transactions should adoption exponentially increase yet again.

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the original unmodified white paper mentions that "server farms" would be nodes, not individual users.  most folks don't run their own email server or web server, yet the internet remains decentralized.

also, the lightning network by design relies on centralization.  if you're concerned the peer-to-peer qualities of bitcoin are at risk then you should be against the current lightning network proposals.

There is a difference between trust-based centralization and trust-less centralization. First, most folks don't run their own email server, but they can if they choose to (I choose to). If Bitcoin is forced into a centralized structure, then that puts Bitcoin into more and more control of centralized parties. If Bitcoin is forced to be hosted on nodes that are only hosted by larger organizations, then those very organizations become targets for government pressure and that means that Bitcoin can be controlled. That's much harder to do if your common everyday user is also capable of hosting nodes as well. Look at the response that the community has had against the threat of the 2X fork (https://coin.dance/nodes/core). The number of Bitcoin Core nodes has dramatically gone up over the last month or so and that is all possible because your common user can do so. That's against the very aim of a decentralized peer-to-peer system. The Lightning Network can (and likely will) lead to centralized "credit union" style hubs, but like I said, the Lightning Network is completely opt-in. So no one is forced into using centralized hubs if they don't want to.

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sidechains are not opt-in if the block size is 1MB and you're in a bidding war to even get your tx in a block.

the lightning network destroys the original alignment of incentives that give us the incredible security of the today's bitcoin mining network.  if fewer people can make on-chain transactions, and the block reward has been halved a few times, why would the miners even mine any longer?

In one argument you're talking about blocks being completely full which would force users into sidechains. Then in the next argument you're talking about blocks being empty which would cause miners to stop mining. Which is it? You can't argue both. The truth is that neither of those scenarios would come to pass. In order to open payment channels on the Lightning Network, you'd still need to put confirmed transactions on the Bitcoin blockchain. Opening and closing payment channels requires that to happen. Therefore, even in a fully utilized Lightning Network, there will still be Bitcoin transactions being broadcast on the network. Also, the Lightning Network is ideally used for smaller payments as payment channels will likely be opened with smaller payments in mind. This makes it possible for micro-transactions and everyday transactions to occur between parties. Larger transactions that aren't ideal for the Lightning Network would still be broadcast on the Bitcoin network as usual and if they require larger fees, then that's OK because a $2 fee to send $10,000 is a pretty darn good deal.

Quote
so do hard forks.  any feature could be added to bitcoin.  bitcoin's supposed to be a honey badger, not a deer in the headlights.  increasing the block size limit to 2MB-8MB by the way isn't a "feature" -- it's a much simpler change than that: it allows bitcoin to perform the same way it's performed since 2009.

I agree, hard forks are great too...so long as replay protection is used for those forks to protect the end users' money. Like I said, I'm OK with increasing the block size and I'm not necessarily advocating against it. But I am advocating against the SegWit2X hardfork that is planned for November since it has been poorly planned, it's timing doesn't give SegWit a chance, it fails to implement replay protection, and doesn't have community support behind it.

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i think we're all on the same page with that here.  agreed.

Yup, thanks for the response!   :)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on October 30, 2017, 09:41:17 PM
The mempool was completely empty this week, so that would go against the argument that the current blocksize is not sufficient to handle the current transaction rate demanded of the network.

you can't cherry pick data to fit your argument.  blocks had been getting closer to being full for years, and now they have been full for some time: https://blockchain.info/charts/avg-block-size?timespan=all&daysAverageString=7

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If Bitcoin is to truly be a competitor to that, then it needs to scale way beyond just 60 tx/sec. That's especially true if the adoption rate kicks into high gear and becomes exponential again like it did this year. You talk about how the blocksize should been increased long ago. That can certainly be argued, but how can that be argued now and at the same time not argue for looking further down the road again and see the writing on the wall that Bitcoin might not be up to the task of handling transactions should adoption exponentially increase yet again.

it seems silly to have to say this but doubling the block size as needed and working on sidechains and lightning network are not mutually exclusive.  it's pretty simple: if most of the network agrees that blocks are full, then double the block size limit if current technology can handle it.  if the block size can't be doubled for technical reasons, then yes unveil the next iteration of whatever sidechain solution you have.

Quote
Quote
the original unmodified white paper mentions that "server farms" would be nodes, not individual users.  most folks don't run their own email server or web server, yet the internet remains decentralized.

my mistake -- the mining farms were mentioned in a satoshi email, not the whitepaper: http://satoshi.nakamotoinstitute.org/emails/cryptography/2/

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There is a difference between trust-based centralization and trust-less centralization. ... The Lightning Network can (and likely will) lead to centralized "credit union" style hubs, but like I said, the Lightning Network is completely opt-in.

again i think the VISA argument is arbitrary straw man but just to clarify -- in your scenario on the order of 10-100s of tx/sec are on-chain with "trust-less centralization" and on the order of 10,000s tx/sec are off-chain on lightning network hubs with "trust-based" centralization -- and that's ok?  where only a few percent of users can use bitcoin in a trustless manner?

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In one argument you're talking about blocks being completely full which would force users into sidechains. Then in the next argument you're talking about blocks being empty which would cause miners to stop mining. Which is it? You can't argue both.

nope, in my argument the tiny blocks are full as you say with lightning channel opening/closing tx, and the block reward is trending to zero.  difficulty however is not trending to zero, so miners are now mining at a loss because they're not capturing fees for the bulk of transactions, which are off-chain.  somewhere before this scenario occurs the miners and users will simply migrate to a chain with larger blocks so they can capture more tx fees.

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I am advocating against the SegWit2X hardfork that is planned for November since it has been poorly planned, it's timing doesn't give SegWit a chance, it fails to implement replay protection, and doesn't have community support behind it.

the fork has had >80% support since mid-june.  https://coin.dance/blocks/proposals

if segwit can't compete with 2MB blocks then perhaps the time isn't right for more intricate solutions, see my point above.  if bitcoin will exist for years there will be plenty of time to introduce these new wrinkles.  the conservative solution is simply increasing the block size now (by "now" i mean after segwit -- the really conservative solution would have been just 2MB) and in the meantime yes, by all means, continuing to work on all manner of "down the road" scaling solutions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 31, 2017, 06:26:12 AM
you can't cherry pick data to fit your argument.  blocks had been getting closer to being full for years, and now they have been full for some time: https://blockchain.info/charts/avg-block-size?timespan=all&daysAverageString=7

You say I'm cherry picking data, and then you link to a chart about the block size? The mempool is a better correlation as to whether the network is backed up than block size is now. Many blocks are not even full. Blocks are able to go beyond 1MB now, so saying they're completely full is extremely misleading of you. The effect of this is that I'm able to send transactions with extremely low fees (20 Satoshi's per byte) and have them confirmed in under an hour. As SegWit continues to get adopted, this trend will continue with more transactions per block with low fees.

Quote
it seems silly to have to say this but doubling the block size as needed and working on sidechains and lightning network are not mutually exclusive.  it's pretty simple: if most of the network agrees that blocks are full, then double the block size limit if current technology can handle it.  if the block size can't be doubled for technical reasons, then yes unveil the next iteration of whatever sidechain solution you have.

They can absolutely be worked on at the same time, but that doesn't mean they need to be implemented at the same time. A UASF is much less impactful on the network than a hard fork is. Again, you're making statements that aren't true. Blocks aren't full to the point where transactions aren't being confirmed in a timely fashion. Transaction fees aren't high. Most wallets miscalculate fee estimates and that's a bigger problem than fee competition is right now. The mempool, which as I said is a better indicator of a bottleneck, is not overloaded with unconfirmed transactions.

Quote
again i think the VISA argument is arbitrary straw man but just to clarify -- in your scenario on the order of 10-100s of tx/sec are on-chain with "trust-less centralization" and on the order of 10,000s tx/sec are off-chain on lightning network hubs with "trust-based" centralization -- and that's ok?  where only a few percent of users can use bitcoin in a trustless manner?

You misunderstand my statement on trust-less versus trust-based. My reference to trust-based was in regards to VISA. Performing transactions over the VISA network requires that you trust them. They're the ultimate mediator of transactions. Transactions are reversible because of this and a lot of fraud occurs which becomes a large cost to VISA. This results in VISA charging large fees to merchants and therefore gives VISA a lot of power. Centralized hubs on the Lightning Network however are trust-less. Those hubs don't control the transactions that traverse through them. They only control which payment channels are set up with who. Furthermore, the Lightning Network can allow for additional anonymity that currently isn't present today with Bitcoin because transactions each payment channel that a transaction traverses is only aware of the intermediary route it is taking (similar to Tor), not necessarily the originator or final recipient.

Also, using the Lightning Network doesn't force you to also use centralized hubs. The two are exclusive of each other. You can still use the Lightning Network without using hubs. Again, it is all opt-in which gives the users options on how they'd like to use their money. This is a very good thing for adoption.

Quote
nope, in my argument the tiny blocks are full as you say with lightning channel opening/closing tx, and the block reward is trending to zero.  difficulty however is not trending to zero, so miners are now mining at a loss because they're not capturing fees for the bulk of transactions, which are off-chain.  somewhere before this scenario occurs the miners and users will simply migrate to a chain with larger blocks so they can capture more tx fees.

How are miners not capturing fees with full blocks as you say? If blocks are full, then they'd be capturing a lot of fees. You're contradicting yourself. The percentage of total transactions that are off-chain is completely irrelevant here when talking about the fee economy for miners. If blocks are full, then miners are getting paid. The reverse of your scenario is much more likely to be true. If you have overly large blocks that are never full, then what would be the point of ever adding a fee to your transaction if it will get confirmed anyway? Vastly empty blocks is bad for the fee economy for miners.

I bolded the statement you just made there that makes absolutely no sense. It is highly contradictory of the entire argument that is ever had for larger blocks. Larger blocks result in lower fees because there is more space than is needed for transactions and therefore there is no reason to include a large fee with your transaction. With the Lightning Network, it enables the capability for micro-transactions to occur (since fees would be non-existent or negligible on the LN), and on-chain transactions where payment channels are opened and larger transactions are made that won't fit on the Lightning Network will have higher fees to accommodate the tighter block sizes.

Quote
the fork has had >80% support since mid-june.  https://coin.dance/blocks/proposals

if segwit can't compete with 2MB blocks then perhaps the time isn't right for more intricate solutions, see my point above.  if bitcoin will exist for years there will be plenty of time to introduce these new wrinkles.  the conservative solution is simply increasing the block size now (by "now" i mean after segwit -- the really conservative solution would have been just 2MB) and in the meantime yes, by all means, continuing to work on all manner of "down the road" scaling solutions.

What do you mean if SegWit can't compete? SegWit had wide support right up until adoption and that support had to remain for a vast majority of blocks in order for it to be activated. Support for SegWit2X however has been declining a lot lately. The support numbers you're showing is just miner signaling (of which Bitmain is a heavy SegWit2X supporter) and miners don't own and dictate the entire network. How is a hard fork (with no replay protection) a more conservative solution than a UASF that was thoroughly tested and even saw exposure on another very similar blockchain (LTC)?? I've yet to hear of a defense for having a hardfork without replay protection.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on October 31, 2017, 09:02:08 AM
SegWit had wide support right up until adoption and that support had to remain for a vast majority of blocks in order for it to be activated. Support for SegWit2X however has been declining a lot lately. The support numbers you're showing is just miner signaling (of which Bitmain is a heavy SegWit2X supporter) and miners don't own and dictate the entire network. How is a hard fork (with no replay protection) a more conservative solution than a UASF that was thoroughly tested and even saw exposure on another very similar blockchain (LTC)?? I've yet to hear of a defense for having a hardfork without replay protection.

I'm not sure where you're getting your information from and how you're evaluating it. Most of your statements, like above, are inaccurate.

Segwit did not have the support it needed for adoption until the majority of the business and mining community got together and signed the New York agreement to first upgrade the protocol to segwit and then later to 2mb. This was the only way segwit passed.

https://medium.com/@DCGco/bitcoin-scaling-agreement-at-consensus-2017-133521fe9a77

Quote
We agree to immediately support the following parallel upgrades to the bitcoin protocol, which will be deployed simultaneously and based on the original Segwit2Mb proposal:

    Activate Segregated Witness at an 80% threshold, signaling at bit 4
    Activate a 2 MB hard fork within six months

Many prominent companies (Coinbase, blockchain.info, BitPay, Xap, Jaxx, Circle, bitcoin.com, etc) signed this agreement and now they are being propagandized against by core blockstream as dangerous to bitcoin. It's very ironic because these are the very companies that help users to acquire and use bitcoin. They have invested significant amounts of time and finances into building up the infrastructure, very much skin in the game. They are deeply enmeshed in the entire space. Now, "they're enemies of bitcoin".



I have nothing further to say about the matter. I just hope newcomers reading the debate don't become misled by misinformation.

In Satoshi's words: "If you don't believe me or don't get it, I don't have time to try to convince you, sorry."

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on October 31, 2017, 11:51:59 AM
I'm not sure where you're getting your information from and how you're evaluating it. Most of your statements, like above, are inaccurate.

Segwit did not have the support it needed for adoption until the majority of the business and mining community got together and signed the New York agreement to first upgrade the protocol to segwit and then later to 2mb. This was the only way segwit passed.

https://medium.com/@DCGco/bitcoin-scaling-agreement-at-consensus-2017-133521fe9a77

Like I said, I support a block size increase to 2MB, just not now and not how it is being implemented currently. I don't believe anything I've said is untrue and if you feel I am being misleading, that is not my intention.

However, you call me misleading and then you link to the NYA agreement as if it was some binding agreement among all those involved with Bitcoin is extremely misleading. The NYA agreement was a closed door meeting involving the Digital Currency Group which is really just a group of financial investors and venture capitalists that claim to represent the overall Bitcoin community (http://dcg.co/who-we-are/ (http://dcg.co/who-we-are/)). That meeting didn't involve anyone from the development team that has worked years on developing Bitcoin. Anyone who values the concept that Bitcoin is resistant to influential entities from manipulating the direction that Bitcoin takes should be troubled by the concept that a small group of investors were able to push a plan forward in the way that they did.

Many of the original companies that signed onto the NYA back in spring after it was announced simply signed on because they wanted to see progress in scaling Bitcoin. I use Coinbase heavily (probably more so than most since I use the Shift debit card for all my daily transactions that is tied to their system). I don't think they are evil and the same goes for many of those companies. I just think they're stuck in a very difficult position. Ultimately their latest announcement regarding how they're going to handle the fork is one of their few options they have without resulting in countless lawsuits if they decided not to support one chain or the other. I was supportive of the NYA agreement at the time as well. I remember when the news came out that I got really excited about the future of Bitcoin and that finally it would be scaled appropriately after years of debate.

Things have changed for numerous reasons since then however. SegWit adoption is only at around ~8% currently. The original Segwit2MB proposal was heavily in favor of SegWit adoption and seeing that in action prior to a 2MB hard fork. It also suggested that 95% of the hashrate signal for the hard fork and that it should be delayed if necessary. The fact that many companies have for a long time used "high fees" as a reason to support SegWit2MB and yet many of those same companies have yet to implement SegWit in their platforms before moving on with a hard fork shows that ultimately they didn't care about actually adopting SegWit to begin with and they certainly didn't care about reducing fees.

I work in IT and never have I ever seen a system get put into production unless we knew that there would be absolutely minimal impact in doing so. This is a $100 billion market now. That can't be said with how the SegWit2X/BTC1 fork has been implemented. As I've said numerous times, a lack of replay protection, naming it BTC1 (confusing users), lack of active development, limited testing, transaction spamming, declining support signaling leading up to the fork date; all of these things make performing a hard fork at this time extremely risky. This is especially true given the fact that additional adoption of SegWit to allow for more transactions per block is an immediate win that can take place without having any impact on the network at all while at the same time introduce additional benefits like

Anyway, like I said, I think we all agree on what needs to happen to Bitcoin to scale it into the future, we just ultimately disagree on the timing on when those things should occur.

My original comment that started this debate was simply that Bitcoin core devs are not evil. I find it odd that you talk about how others are calling companies supportive of SegWit2X as "enemies of bitcoin" and yet there are some in this thread that have ostracized the core dev team as "evil" themselves. I still stand by that statement that they're not evil and you can read this thread by one of the core devs that discusses some of the advances they've made that we should all be grateful for if we want to see Bitcoin succeed.

https://medium.com/@jfnewbery/what-did-bitcoin-core-contributors-ever-do-for-us-39fc2fedb5ef (https://medium.com/@jfnewbery/what-did-bitcoin-core-contributors-ever-do-for-us-39fc2fedb5ef)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on October 31, 2017, 01:33:11 PM
meh, all this old man arguing about forks is boring.

lets spice this S%$(* with derivatives.

https://www.cnbc.com/2017/10/31/cme-plans-to-launch-bitcoin-futures-by-year-end.html

this is like holy guacamole exciting for BTC holders. It makes the Alt coins pretty alternative if you can sling your BTC around on the CME like granddad used to do with his pork bellies.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on October 31, 2017, 01:57:00 PM
You guys really had to bring the block weight debate in here huh lol.

Glad everyone is participating and contributing.

QUESTION: Do you see Bitcoin out-performing Alts next year?

It's an interesting discussion to be had given that Hedge Funds are rapidly moving into the space and now we already have 2 derivative providers. I personally still feel Alts (the quality ones) will outperform but the debate can definitely be had for the opposing view.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on October 31, 2017, 02:42:21 PM
The liquidity on any individual BTC exchange just isn't that great compared to markets my grandfather would accept as "real".  With CME futures and hedge fund activity you will see a hell of a lot more volume of BTC being moved or needed for hedging ect than any Alt coin will have.

Plus, the futures let you play BTC without forcing a BTC transaction, so the big boys can sling a billion dollars/euros/whatever around amongst future months and it doesn't affect the network. Day after Day of this.

liquidity begets respectability. Or, maybe it will let enough money rush in to really get us to a bubble.

Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 01, 2017, 07:36:11 AM
The CME futures announcement worries me. I knew it was only a matter of time before Bitcoin derivatives would start getting traded, but it is still so early in the game without a $100 billion dollar market cap. I was hoping that derivatives would be supplemented to Bitcoin's growth, but at this stage it could end up driving growth which I don't think is good.

My post above about the global financial crisis was in direct regards to the derivative manipulation that happens on Wall Street. Also, futures won't actually create demand for Bitcoin today, they'll just be trading "paper bitcoin" today. I can foresee hundreds of thousands of paper bitcoin being traded where only a fraction of that is backed up by actual bitcoin on the blockchain. That's dangerous. I'm curious to see how this ends up getting regulated.

The whole point about bitcoin is that it can't be counterfeit. If you hold bitcoin on the blockchain, then you know it is 100% real. That's not the case with derivatives.

Either way, the news is good for bitcoin however as it just gives it more press and legitimacy to those who actually trade in the real deal.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on November 01, 2017, 08:19:39 AM
why are futures so worrying to you?

Sure, the futures contract for a given forward month may have a huge number of open contracts or a small number.  There will be a self correcting effect if to many contracts are out there and traders are nervous about getting BTC to cover them, they simply buy/sell as appropriate to close the contracts.  Most commodity contracts are closed out like this prior to delivery.

Derivatives are dangerous for the institution issuing them if a counter party cannot pay and they end up with a very very highly leveraged position on a security. This is neither good nor bad for the underlying security.  When derivatives trigger indexes to be bought and sold, this creates volume that stock following computers pick up on and amplify.  But, since the Merc future is the only place those kind of guys can trade, how can they wreck the underlying?


This all may be hyperbole and have no effect if the BTC future is USD settled off an index. If that's the case, institutions may not really trade the futures since they cannot hold underlying to offset positions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 01, 2017, 08:46:41 AM
why are futures so worrying to you?

Sure, the futures contract for a given forward month may have a huge number of open contracts or a small number.  There will be a self correcting effect if to many contracts are out there and traders are nervous about getting BTC to cover them, they simply buy/sell as appropriate to close the contracts.  Most commodity contracts are closed out like this prior to delivery.

Derivatives are dangerous for the institution issuing them if a counter party cannot pay and they end up with a very very highly leveraged position on a security. This is neither good nor bad for the underlying security.  When derivatives trigger indexes to be bought and sold, this creates volume that stock following computers pick up on and amplify.  But, since the Merc future is the only place those kind of guys can trade, how can they wreck the underlying?


This all may be hyperbole and have no effect if the BTC future is USD settled off an index. If that's the case, institutions may not really trade the futures since they cannot hold underlying to offset positions.

Read the Rolling Stone article above that I link to. It is an excellent read with eye-opening info on how Wall Street handles derivatives.

On paper it may seem like a good thing, but the truth of the matter is that with the corruption on Wall Street, there will likely be 10 "paper bitcoins" being traded for every one bitcoin that is actually on-chain. People might think their derivative is backed by real bitcoins, but the reality is that they probably aren't.

Again, I'm not saying this will be the case with CMEs futures contracts. I'm just saying that going down the derivative road will likely lead this to be true considering that it is true for just about everything else that is traded on Wall Street; oil, soy beans, gold, even US Treasury bonds.

Holding bitcoin on-chain will keep you safe since they can't be counterfeit, but I'd stay as far away from holding any bitcoin derivative of any kind as possible.

"Your key, your bitcoin. Not your key, not your bitcoin."
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: trollwithamustache on November 02, 2017, 03:59:11 PM
It appears the futures will be dollar settled, so while at times, the number of open contracts could exceed the number of bitcoins, the settlement of contracts won't force BTC transactions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on November 02, 2017, 07:07:04 PM
So what's the use case of buying or selling a bitcoin future rather than a bitcoin itself? The hedging purposes of futures make sense to me for things that are constantly being produced and where industrial buyers know they will need to purchase fixed amounts at regular timepoints (like oil or porkbellies), but I still cannot wrap my head around this for cytocurrencies.

Are they significant futures markets for euros or RMB? If so, what do people use them for?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: hgjjgkj on November 02, 2017, 10:49:42 PM
Two Questions

1) Is there money in BTC exchange arb? Buying low on one exchange and selling on another?

2) For BTC investors who have seen recent high gains, how do you plan you strategy going forward? Do you take gains and put them in something more stable? How do you think about incremental additional investments when this will now raise your cost basis a ton?
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 03, 2017, 07:18:45 AM
IF they pass the law proposal that you can spend like $600 a transaction tax free, I might use it to pay my household bills or buy more mining hardware.

That is a big IF! I would LOVE for that legislation to pass. If it did, bitcoin would become my main tax-free spending money in my early retirement years while my pre-tax accounts get laddered into my Roth.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: MVal on November 03, 2017, 08:42:37 AM
Is anyone here using Bitconnect? I've got a little Bitcoin on there making me a few dollars a week and I'm planning on doing the continuous re-lending thing for a while and see how it goes.

Also, who is buying more Bitcoin before the hard fork this month? I'm hesitant to with Bitcoin rallying like it is right now, but I'm lured by the prospect of "doubling" my coin with the Segwit2x thing.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: shadow on November 03, 2017, 03:18:38 PM
Bitconnect is a ponzi.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on November 03, 2017, 03:31:33 PM
So what's the use case of buying or selling a bitcoin future rather than a bitcoin itself? The hedging purposes of futures make sense to me for things that are constantly being produced and where industrial buyers know they will need to purchase fixed amounts at regular timepoints (like oil or porkbellies), but I still cannot wrap my head around this for cytocurrencies.

Are they significant futures markets for euros or RMB? If so, what do people use them for?

The two main areas I know of.
1. Leverage... You can buy A LOT of bets for (call) or against (put) which sell in lots of 100 for very cheap. Most of the cost is time value... So if BTC moves $1 in an hour (very possible) you can make $100 with a relatively small investment. I am not sure what the premium is going to be since BTC itself is so scarce, but my guess is it will be fractionalized up the a**.
2. Gets around rules to allow trading on the main exchanges "pretend BTC" which is really cash based and has no real conneciton with reality without being an accredited investor so everyone can buy in.

This may either propel BTC to stupid crazy high prices fast because of the hype or stabalize the price... I am not sure which way it will go.

I thought there was a difference between futures contracts and options contracts (puts/calls). With futures you generally pay "full price" now, for delivery at some point in the future. If you look at the pricing for futures contracts on corn or oil or porkbellies they tend to be in the neighborhood as current prices (perhaps a bit higher or a bit lower based on what the market expects future demand to look like). But okay, if we're talking about options contracts rather than futures, I agree with you on point #1, you can certainly lever up a lot more with options than with the underlying asset and as a result make (or lose) a lot more money with a lot less starting capital.

For #2, if the trading is entirely cash based and a lot of the buyers and sellers on non-accredited investors it seems like the counter party risk would be through the roof. Even if you made a killing on bitcoin options contracts, is whoever you bet against actually going to have the money to pay?

Anyway, whatever I think of the rationality of the motivations, I at least understand what the motivations might be now, thanks!
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: Tonyahu on November 06, 2017, 11:48:29 AM
Bitconnect is a ponzi.

This is 100% correct. It's officially blocked and banned by Malware Bytes as well.

http://cryptocougar.com/malwarebytes-anti-malware-software-added-bitconnect-blocked-website-list/

LMFAO, please watch this. https://www.youtube.com/watch?v=kbR1SXIje1U
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 08, 2017, 11:38:59 AM
The Segwit2X hardfork has been suspended this month. Bitcoin rallies! There was much rejoicing! I'm happy there will not be a split in the community.

Edit: "hardfork" not "hardwork"...stupid autocorrect.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: powskier on November 08, 2017, 03:49:03 PM

LMFAO, please watch this. https://www.youtube.com/watch?v=kbR1SXIje1U

Looks like another well known non tax paying scam. It's amazing how gullible people can be.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on November 12, 2017, 12:02:35 AM
The Segwit2X hardfork has been suspended this month. Bitcoin rallies! There was much rejoicing! I'm happy there will not be a split in the community.

i don't think we're out of the woods quite yet.  we'll see if some group of miners goes forward with the 2x fork, we'll see what happens with the new BCH DAA, and the BTC mempool is getting huge.

things are even crazier than normal in the bitcoin world with BTC crashing and BCH going vertical (for the time being).  from a bitcoin portfolios perspective i still think the safest option is to do nothing (don't buy or sell any bitcoin on any fork) and wait (weeks/months) for some sort of resolution.  it seems too easy to me to publish a statement saying "2x is canceled" in an attempt to manipulate the market, miners are free to hop from chain to chain, exchanges still have to react to the 2x cancellation, etc.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 13, 2017, 06:33:56 AM
i don't think we're out of the woods quite yet.  we'll see if some group of miners goes forward with the 2x fork, we'll see what happens with the new BCH DAA, and the BTC mempool is getting huge.

things are even crazier than normal in the bitcoin world with BTC crashing and BCH going vertical (for the time being).  from a bitcoin portfolios perspective i still think the safest option is to do nothing (don't buy or sell any bitcoin on any fork) and wait (weeks/months) for some sort of resolution.  it seems too easy to me to publish a statement saying "2x is canceled" in an attempt to manipulate the market, miners are free to hop from chain to chain, exchanges still have to react to the 2x cancellation, etc.

Yup, that was posted immediately after the SegWit2x cancellation. Crazy times indeed. The bouncing between BCH and BTC has been seen before as well as the pump and dump between the two. It is currently over 4 times more profitable to mine BTC than BCH at the moment. BCH is down over 30% since yesterday and BTC is rebounding. This is the same type of pattern we saw back in August/September after the hard fork. The BTC mempool is clearing out now as well. Once the new BCH DAA goes through, that should help prevent miners from jumping back and forth and simply using BCH as a quick means of profit manipulation.

I'm not so sure having miners push through the SegWit2x hard fork is in their best interest. The same miners that are pro-BCH are the ones that were pro-SegWit2X. So that would just split their hash power between the two even more which would give Bitcoin Core even further strength against them both. I would think BCH is more inline with the big blocker agenda anyway since they didn't really want SegWit activated to begin with. But, hey, I guess you never know, anything can happen.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 16, 2017, 10:08:25 AM
How do people feel about the CME futures market that will supposedly be opening up in mid-December. Since it is all cash settled, I'm wondering what this will do for the demand of actual on-chain bitcoin. Market makers will want to hedge long bets to ensure that the actual bitcoin market goes up on the exchanges where the price is pegged. Do you guys think that the market makers will end up holding bitcoin to back these futures contracts or do we think that this market will just balloon up to astronomical proportions and dwarf the actual bitcoin markets and thus suppress demand for actual on-chain bitcoin. This could certainly help decrease volatility, but I'm worried it might depress demand for actual bitcoin.

On the upside, I do think this will give more legitimacy to bitcoin as an asset and if the futures market is massive then that will make it that much lower of a likelihood that the government would ever want to squash bitcoin since a lot of institutional investors will have money now in play.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 17, 2017, 09:36:03 AM
Unbelievable. So nodes that were running the BTC1 software for the SegWit2X hardfork that was planned to go through today ended up getting stuck on block 494782. It appears as if Jeff Garzik made an off-by-one mistake in his code. The reason why that wasn't caught was because there was ZERO code review for those for code commits. And this is the way that they want to develop software that's expected to support a $120 billion dollar market? Insane! This is exactly what I was talking about in my earlier posts about why we should have been concerned about this hardfork that they were trying to push through. Imagine if the community supported this hot mess? We're talking about billions of dollars likely being lost as a result of the panic that would ensue as all the nodes on the network would cease functioning until the entire network received appropriate patches to fix it. People may critique the bitcoin core devs for being too conservative, but this is exactly why you don't rush things with code that is expected to support a multi-billion dollar industry.

https://twitter.com/AaronvanW/status/931513254861471749 (https://twitter.com/AaronvanW/status/931513254861471749)
https://twitter.com/pierre_rochard/status/931529855245496321 (https://twitter.com/pierre_rochard/status/931529855245496321)
https://twitter.com/pierre_rochard/status/931530935983656962 (https://twitter.com/pierre_rochard/status/931530935983656962)
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: phil22 on November 17, 2017, 04:35:05 PM
the segwit2x fork bug is a good example of why we need miners and nodes to run bitcoin implementations published by multiple development teams.  i believe some miners use their own bitcoin implementations, but this would have definitely broken many nodes and miners, shaken confidence, and probably caused a price crash.

sorry but core is plainly the opposite of conservative -- to support their business model they changed and added thousands of lines of new code rather than changing a single line of code for max block size.  as a result bitcoin fees skyrocketed this week in the frenzy after the 2x cancellation... and the mempool is still at 90MB with tens of thousands of unconfirmed transactions.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 17, 2017, 07:29:05 PM
the segwit2x fork bug is a good example of why we need miners and nodes to run bitcoin implementations published by multiple development teams.  i believe some miners use their own bitcoin implementations, but this would have definitely broken many nodes and miners, shaken confidence, and probably caused a price crash.

sorry but core is plainly the opposite of conservative -- to support their business model they changed and added thousands of lines of new code rather than changing a single line of code for max block size.  as a result bitcoin fees skyrocketed this week in the frenzy after the 2x cancellation... and the mempool is still at 90MB with tens of thousands of unconfirmed transactions.

You don't determine the future and direction of a currency based on the number of lines of code it takes to implement design decisions. SegWit was tested thoroughly on testnet for over a year and a half. On top of that, SegWit also saw real world production usage on the Litecoin network to see how it would behave in action with real life money. To say that they were the opposite of conservative simply because the number of lines of code involved is a misunderstanding of a proper development lifecycle.

Regarding fees, first off, one of the biggest factors in rising fees for bitcoin is simply due to the fact that the price of a single bitcoin has risen astronomically over the last 2 years. Rather than focusing on the fee paid in USD for any given transaction, it should be the fee rate that should be of primary concentration. When you look at fee rates on Bitcoin Cash, the median fee rate is somewhere around 60-70 satoshis/byte. That results in a fee of about 18 cents on the Bitcoin Cash network for a transaction of average size. That same fee rate would result in a fee of $1.15 if the price of Bitcoin Cash were equivalent to the price of Bitcoin today (~$7700). Now, the median fee rate on the bitcoin network today is around 90 satoshis/byte. With an average transaction size of about 230 bytes, this results in your median fee being around $1.60 on the bitcoin network. That's not too far from what the Bitcoin Cash network would look like now if its price were the same as Bitcoin's.

However, obviously, the load on these two networks are drastically different. The bitcoin cash network sees a much lower volume of transactions than bitcoin does. So at the moment, the bitcoin core network measures block density through block weight (not block size) due to the SegWit implementation. The percentage of SegWit transactions is only around 10-11%. This means that there is still potential to decrease these fees by not only freeing up block weight space for additional transactions and thus decreasing competition in the fee market (lowering the fee rate), but also by decreasing the average size of a transaction using SegWit enabled wallets/addresses. But where does bitcoin cash go with an increasing load? Competition for block space is already low due to the low transaction volume and large block size. Therefore there isn't much capability for bitcoin cash to decrease the actual fee rate paid and fee of transactions in USD from where they are today. If bitcoin cash were to see the same load of the bitcoin network then that would mean the only option to keep the fee rate the same as it is today would be to increase the block size yet again. Decreasing the fee rate is what is ultimately critical if you want to maintain the capability to make a coffee purchase under conditions where the price of the token in question could potentially rise into the tens of thousands. This is where second layer solutions will be really needed in order to allow for micro-transactions long into the future.

If increasing the block size only allows you to maintain the fee rate that we have today, that means that if the price of bitcoin cash were to increase dramatically, then we'd be in the same position with high fees (in USD) while at the same time decreasing centralization immensely.

Now let's talk about centralization. The SegWit2X network consisted of almost 90% AWS nodes that were likely spun up by a single entity given the fact that they appeared and disappeared in dramatic fashion very quickly. The hashrate of both the SegWit2x and BCH network are also greatly centralized consisting of mostly  miners out of China. I think this is a perfect example on why having a smaller block size yields a more decentralized network as whole. Bitcoin's decentralization is its key characteristic that will determine its survival in the long run. There appear to be two different approaches here. One sacrifices decentralization in an effort (a faulty one) to support coffee purchases. The other sacrifices the ability to purchase coffee to maintain its decentralization. Given the fact that there are many solutions out there that can support purchasing coffee and yet no valid solutions out there that are completely decentralized and trustless, it is my opinion that we should not sacrifice one for the other. There are always second layer approaches to enable coffee purchases with crypto-currencies, but there is only one option for keeping a network decentralized at layer 1.

Finally, as far as unconfirmed transactions go, there was clearly a transaction spam campaign that occurred after the fork cancellation due to the enormous number of transactions that were broadcast that all had fees of 10 satoshis/byte or lower. This was a very anomalous event. However, this doesn't impact legitimate users who are trying to get transactions through since all it takes to prioritize a legitimate transaction over one of these spam transactions is to submit a fee that is just a few satoshis/byte higher than those spam transactions. That means those spam transactions are simply just sitting there in the mempool, but don't actually effect the fee market much since they're not really competitive with regards to fees. So saying that transactions are backed up is extremely misleading in the current circumstances.

That doesn't even take into consideration the poor wallet fee estimation that also plays a very large part in users overpaying for fees at the moment that I spoke about earlier.

I hope this clears up some information as I feel like there is a lot of misinformation out there on fees, scaling, etc with regards to the bitcoin network.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: maizeman on November 18, 2017, 11:27:03 AM
Regarding fees, first off, one of the biggest factors in rising fees for bitcoin is simply due to the fact that the price of a single bitcoin has risen astronomically over the last 2 years. Rather than focusing on the fee paid in USD for any given transaction, it should be the fee rate that should be of primary concentration. When you look at fee rates on Bitcoin Cash, the median fee rate is somewhere around 60-70 satoshis/byte. That results in a fee of about 18 cents on the Bitcoin Cash network for a transaction of average size. That same fee rate would result in a fee of $1.15 if the price of Bitcoin Cash were equivalent to the price of Bitcoin today (~$7700). Now, the median fee rate on the bitcoin network today is around 90 satoshis/byte. With an average transaction size of about 230 bytes, this results in your median fee being around $1.60 on the bitcoin network. That's not too far from what the Bitcoin Cash network would look like now if its price were the same as Bitcoin's.

Could you tell me a bit more about why you'd expect transaction fees priced in satoshis to stay constant as the price of the currency (in dollars/RMB/euros) increases?

Here's why I'm having trouble with that assumption: Transaction fees should be driven by supply and demand. Since the block size is currently fixed for both currencies, we can put aside the supply side entirely (technically I believe this is called having completely inelastic supply). If the price of the currency doubles but people are buying and selling the same goods (from cups of coffee to drug deals to purchases on overstock.com) for the same prices in USD, wouldn't you expect demand curve for bitcoin transactions to stay the same? For example, if I'm willing to buy a $5 cup of coffee with bitcoins if I have to up to but no more than $0.50 in transaction fees when the price of bitcoin was $3,500/bitcoin, I don't think it necessarily true that if the price of bitcoin doubles to $7,000 that I'm now willing to pay up to $1.00 in transaction fees to buy the same $5 cup of coffee.

What I suspect is actually happening is that as the price of conventional bitcoin continues to increase, it draws in more total people (whether they're using the currency as intended or buying in the hopes that the the price continues to increase), which creates more transactions trying to be confirmed, raising the minimum price people have to pay to ensure their transactions get included in a block. This still means that as prices (in USD/RMB/EURO) go up, transaction fees (USD/RMB/EURO) go up, but if I'm right then there is indeed a positive correlation between increasing cryptocurrency price and increasing transaction fees, however there is no reason to think the two increases are linked at a 1:1 rate. If bitcoin doubles in price it might bring in 50% more people (4:3), if bitcoin doubles in price it might bring in twice as many new people as are in the current user community (2:3).* But that 1:1 link is what you'd need for transaction fees to stay constant in terms of satoshis/byte.

*Technically it's not the number of people, it's the number of transactions. A single new user who is going to make 30 bitcoin transactions a month is going to increase the demand curve for bitcoin transactions more than twenty new users who are going to make 1 transaction a month each.
Title: Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
Post by: lifeanon269 on November 18, 2017, 01:15:32 PM
Regarding fees, first off, one of the biggest factors in rising fees for bitcoin is simply due to the fact that the price of a single bitcoin has risen astronomically over the last 2 years. Rather than focusing on the fee paid in USD for any given transaction, it should be the fee rate that should be of primary concentration. When you look at fee rates on Bitcoin Cash, the median fee rate is somewhere around 60-70 satoshis/byte. That results in a fee of about 18 cents on the Bitcoin Cash network for a transaction of average size. That same fee rate would result in a fee of $1.15 if the price of Bitcoin Cash were equivalent to the price of Bitcoin today (~$7700). Now, the median fee rate on the bitcoin network today is around 90 satoshis/byte. With an average transaction size of about 230 bytes, this results in your median fee being around $1.60 on the bitcoin network. That's not too far from what the Bitcoin Cash network would look like now if its price were the same as Bitcoin's.

Could you tell me a bit more about why you'd expect transaction fees priced in satoshis to stay constant as the price of the currency (in dollars/RMB/euros) increases?

Here's why I'm having trouble with that assumption: Transaction fees should be driven by supply and demand. Since the block size is currently fixed for both currencies, we can put aside the supply side entirely (technically I believe this is called having completely inelastic supply). If the price of the currency doubles but people are buying and selling the same goods (from cups of coffee to drug deals to purchases on overstock.com) for the same prices in USD, wouldn't you expect demand curve for bitcoin transactions to stay the same? For example, if I'm willing to buy a $5 cup of coffee with bitcoins if I have to up to but no more than $0.50 in transaction fees when the price of bitcoin was $3,500/bitcoin, I don't think it necessarily true that if the price of bitcoin doubles to $7,000 that I'm now willing to pay up to $1.00 in transaction fees to buy the same $5 cup of coffee.

What I suspect is actually happening is that as the price of conventional bitcoin continues to increase, it draws in more total people (whether they're using the currency as intended or buying in the hopes that the the price continues to increase), which creates more transactions trying to be confirmed, raising the minimum price people have to pay to ensure their transactions get included in a block. This still means that as prices (in USD/RMB/EURO) go up, transaction fees (USD/RMB/EURO) go up, but if I'm right then there is indeed a positive correlation between increasing cryptocurrency price and increasing transaction fees, however there is no reason to think the two increases are linked at a 1:1 rate. If bitcoin doubles in price it might bring in 50% more people (4:3), if bitcoin doubles in price it might bring in twice as many new people as are in the current user community (2:3).* But that 1:1 link is what you'd need for transaction fees to stay constant in terms of satoshis/byte.

*Technically it's not the number of people, it's the number of transactions. A single new user who is going to make 30 bitcoin transactions a month is going to increase the demand curve for bitcoin transactions more than twenty new users who are going to make 1 transaction a month each.

I wasn't trying to imply that the increase in the price of bitcoin is the sole reason why transaction fees have drastically risen over the last year (as priced in USD), but I do feel that it is the largest driver thus far given the fact that the price in bitcoin has increased at a much faster rate than the total number of transactions has. Coffee transactions don't just have to compete with other coffee transactions. They have to compete for block space with other large monetary transactions as well. Obviously a fair fee for larger monetary transactions is much higher than that of a fair fee for a small coffee payment. There will always need to be competition for block space. If there is no competition, then there is no need to apply a fee to any transaction at all, regardless of the size. Therefore, if the fee market requires a block size that forces certain transactions to wait to be confirmed in order to promote a fee market, then it will always be the smallest transactions (priced in USD) that are forced out of the block and be suspended in the mempool for a given duration because of the limited willingness to use a higher fee for such a small monetary transaction. This very model makes it unsuitable to scale for micro-transactions.

In the instance of bitcoin cash, since block size is essentially being used as the sole means of scalability, this means that the fee market is a delicate balance between ensuring that the mempool isn't always empty and that the blocks aren't always full. As I said above, since large monetary transactions are competing for the same block space as micro-transactions, then it will always be the micro-tranactions that are priced out of the block first. Now, that doesn't mean that in the long term the fee rate won't go down if it were to ever reach mainstream adoption and the adoption S-curve stabilized. However, reaching mainstream adoption depends directly on a token price that increases dramatically in order to support billions of users and a massive influx of money. This also means that the number of transactions will sky-rocket and the block size would need to be adjusted accordingly. In order to maintain a fee market during this phase of increasing adoption, it would absolutely require micro-transactions to be priced out of the block space since the fee rate would likely not decrease correspondingly since large monetary transactions are willing to pay those fee rates.

As you said in your last paragraph, there is a difference between the number of users versus the number of transactions. There is certainly a correlation between the two, but likewise there is a correlation between the value of the token and the number of users. So if there are 100 users on the network, the token will likely have a higher value than a network with only 10 users (regardless of the number of transactions taking place). This is the network effect that has been shown to essentially explain about 90% of bitcoin's price movement since inception. So if we are to expect that a network like bitcoin cash is to scale to accomodate a certain number of users as its adopted, then it should be expected that the value of the token would rise in relation. Since the fee market depends on forcing some transactions out of the block, then again micro-transactions will