Author Topic: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion  (Read 225056 times)

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #900 on: February 07, 2018, 04:20:16 PM »
This is pretty insane. There are a lot of people (mostly millenials) investing in small transactions for stocks using RobinHood. Now they will do the same with crypto. This also puts massive pressure on existing exchanges to do better and lower fees. As millenials grow in their careers (which I see all over the tech space) they make huge leaps in earning power that will be pooring in for the next 10 years. All of this is great for both crypto and stocks.

https://cointelegraph.com/news/over-1-mln-people-sign-up-for-early-access-to-robinhoods-zero-fees-trading-service

Look at the recent robinhood user growth!
https://techcrunch.com/2017/04/26/robincorn/

Robinhood has literally the stupidest business model I've ever heard:

Robinhood has gone straight for this problem, and made it zero-fee, even though it will essentially be a ‘loss leader’ meaning they will not be making money off of this feature. Robinhood are more interested in growing their crypto community base, and by growing their base, they will also be taking users away from those who are profiting from the fees.


"What we lose on every transaction we make up for in volume..."

Re:  The Winklevie Twins.  The first Winklevie Twin clearly has no concept about what money is or how it works.  Gold doesn't work very well as currency, in part because the supply is fixed, or at least it is hard to grow it at the same rate as the economy, which leads to all sorts of problems.  I mean, if gold worked well, how come nobody uses for currency?  Hint:  It doesn't work well. 

The second Winklevie Twin spouted a bunch smug blather that sounded like English, but had no meaning. 



PDXTabs

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #901 on: February 07, 2018, 04:42:08 PM »
@trollwithamustache @sol,

Do you know any unbanked people? My local credit union definitely has fee free options for people with irregular income. Everyone I know that is unbanked is unbanked because they have some sort of unpaid debt that would get collected from their accounts. Cryptocurrency can solve this problem, but not in any great way (stable value, etc).

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #902 on: February 07, 2018, 04:53:43 PM »
@trollwithamustache @sol,

Do you know any unbanked people? My local credit union definitely has fee free options for people with irregular income. Everyone I know that is unbanked is unbanked because they have some sort of unpaid debt that would get collected from their accounts. Cryptocurrency can solve this problem, but not in any great way (stable value, etc).

It could solve that problem, if there was reasonable acceptance of cryptocurrency as payment.  But no grocery stores, gas stations, landlords, utility companies, etc. accept crypto for payment.  They do however, accept cash.  And as you point out, cash is unlikely to lose half its value in two months like we saw with Bitcoin.




sol

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #903 on: February 07, 2018, 05:12:40 PM »
@trollwithamustache @sol,

Do you know any unbanked people?

Yes, many.

Most of them work in cash, to avoid paper trails.  Illegal immigrants and drug dealers, for example, typically avoid bank accounts.

I've also met more than my fair share of people living in poverty around the world, which is by far the larger share of the unbanked population.  They don't have electricity or indoor plumbing, but lots them have gardens that produce food they can sell (and eat) or tools that they use to perform labor.  They also mostly deal in cash, or sometimes with local credit arrangements within neighborhoods or communities.  Like I'll share my nut harvest if you share your goat milk, or I'll help you replace your roof if you help me repair my fence.

Some of them have cell phones, which in the developing world can now be used for electronic banking.  That was true long before crypto came along.

I just don't see how blockchain helps any of these people.  Their problems are not solved by distributed encryption.

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #904 on: February 07, 2018, 05:34:18 PM »
I just don't see how blockchain helps any of these people.  Their problems are not solved by distributed encryption.

Yes!!  Block chain is a distributed ledger that everyone can read.  So, what types of problems might block chain solve? I can see internal transactions between divisions of a company, chain-of-title for real estate, provenance for works of art, supply chain,  aircraft maintenance, stuff like that.  It isn't hard to think up of lots of areas where block chain might be helpful. 

So why does the under banked population need a distributed ledger that everyone can read?   They don't!!  These are not hard concepts. 


Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #905 on: February 12, 2018, 01:02:15 AM »
MMM is an awesome resource! I had moderately mustachian financial habits already - I never carry revolving credit debt, aggressively pay down mortgage/long term debt, buy reliable cars and keep them for long periods, exercise environmental stewardship through reuse and purchasing used items, insource as many tasks as possible, etc.  I've been powering through these blog / forum posts and it's really given me a push to make further strides as there is so much more to learn and do.  Really grateful for all the info on here and this community!

I was excited to see a crypto discussion thread here on MMM forum, it's disappointing it's devolved so much.  I have been researching cryptocurrencies and will do my best to provide some useful information.   Disclaimer: I hold BTC and a selection of alts, in an amount that I'm comfortable losing.

My personal interpretation of Mustachianism is to work hard and live frugally such that we will be financially sound across as many possible future scenarios as possible.

By design this eliminates a host of get-rich-quick schemes as they will only yield financial security in a small handful of possible futures.  This includes cryptocurrencies.  If you aren't already maxing out 401ks and paying down high interest debt, save this for later.

So you're building your 'stash, paid down your high interest debt, and living frugally. So why bother with crypto?

Cryptocurrencies' main role in a modern portfolio is diversification

In some potential futures crypto growth outstrips that of conventional investments and having a small piece adds to overall profitability of one's portfolio.

A reasoned analysis of blockchain tech impact in the modern world by harvard business review, turning the "disruptive technology" idea on its head:
https://hbr.org/2017/01/the-truth-about-blockchain

tl;dr: Blockchain's utility is not to overthrow traditional institutions, it is to create new foundations for better versions of traditional institutions. This is a gradual process that will take years/decades.

The vast majority of future timelines contain a continued and successful traditional financial market, along with streamlined digital transactions that save users money and make currently difficult tasks much easier such as payments, digital identity verification, and proof of ownership.  This is an entire new sector and having it represented in one's portfolio may offer advantages, though at increased risk.

It can be unpleasant to contemplate highly unlikely yet highly impactful future outcomes such as hyperinflation.   All our eggs are in one giant basket - the traditional financial markets.  Crypto may provide a hedge against the traditional markets in the event the worst should happen. Precious metals have a place in this space as well, even though they can be difficult to transact with.  Being able to do business with anyone using only your cell phone is vastly more practical than carrying around chunks of metal.

Do your research before choosing a cryptocurrency. Things to look out for:
-what is the circulating supply? Total supply? Was the coin "pre-mined" (created out of thin air, usually founders take a huge cut)
-verify mechanistic and political levels of decentralization.  How distributed is the mining / staking that supports it? does a private entity control the ledger?  Is there any evidence that the ledger is not immutable?

Some practical measures:

-only use exchanges for the short term purpose of obtaining the desired currency.  Immediately transfer tokens to a local software or hardware wallet on your computer.
-backup your wallet, preferably offline.  there are many online tutorials for how to do this.

There is a wealth of information out there for security best practices when it comes to managing your own crypto assets.  Do your homework.  And don't use money you cannot afford to lose.
« Last Edit: February 13, 2018, 11:19:06 PM by Surf »

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #906 on: February 12, 2018, 06:09:22 AM »

So you're building your 'stash, paid down your high interest debt, and living frugally. So why invest in crypto?

Cryptocurrencies' main role in a modern portfolio is diversification

Facepunch.

If you assume that crypto currencies are actually currencies (which is a stretch, but let's assume that for now), then crypto should replace or supplement the portion of your portfolio that is currently held in non-dollar currencies.  That portion of your portfolio should equal exactly zero to begin with.  Unless you are currency speculator, but that's speculating, not investing. 

Your whole analysis breaks down breaks because you are assuming there is such a thing as adoption of Bitcoin.  There isn't.  Almost no one uses it for anything.   The only people who need Bitcoin are child pornographers and drug dealers.  For everybody else, the USD works perfectly.  And even if you are a child pornographer or drug dealer, you still don't need Bitcoin.  You could use Litecoin, or Dogecoin, or Etherium, or Fidleius, or any of a zillion cryptos out there. 

No one, repeat no one, invests in Bitcoin.  People speculate in Bitcoin.  If you want to speculate, more power to ya.  But you are a damn fool if you think speculation is the same as diversification. 

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #907 on: February 12, 2018, 06:47:26 AM »
It can be unpleasant to contemplate highly unlikely yet highly impactful future outcomes such as hyperinflation. 

I swore I wasn't going to nitpick your post, but I just have to comment on this. 

Let's go ahead and contemplate the unpleasant topic of hyperinflation.  BTC has lost 50% of its value in two months.  That is hyperinflation. 

So you are touting a hyperinflating currency as a hedge against hyperinflation?

Really?  That's a selling point?  A primary feature of Bitcoin is that instead of highly unlikely hyperinflation of the USD in the future you can enjoy actual hyperinflation of BTC right now. Sign me up!


sol

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #908 on: February 12, 2018, 07:48:04 AM »
Don't be discouraged, Surf.  You're unlikely to get a warm welcome here if you show up sounding like a paid Bitcoin promoter, but if you are a real person who understands the MMM message then you'll find the form generally welcoming and supportive.

trollwithamustache

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #909 on: February 12, 2018, 08:12:59 AM »
@trollwithamustache @sol,

Do you know any unbanked people? My local credit union definitely has fee free options for people with irregular income. Everyone I know that is unbanked is unbanked because they have some sort of unpaid debt that would get collected from their accounts. Cryptocurrency can solve this problem, but not in any great way (stable value, etc).

I have no argument with the statement that my bank sucks.  what is the minimum balance for a free account at your credit union?

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #910 on: February 12, 2018, 09:01:56 AM »
Don't be discouraged, Surf.  You're unlikely to get a warm welcome here if you show up sounding like a paid Bitcoin promoter, but if you are a real person who understands the MMM message then you'll find the form generally welcoming and supportive.

Thanks Sol, I appreciate that!

The MMM blog and forums have resonated deeply with me.  I'm learning so much every day from it that and I wanted to contribute.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #911 on: February 12, 2018, 09:09:32 AM »

So you're building your 'stash, paid down your high interest debt, and living frugally. So why invest in crypto?

Cryptocurrencies' main role in a modern portfolio is diversification

Facepunch.

If you assume that crypto currencies are actually currencies (which is a stretch, but let's assume that for now), then crypto should replace or supplement the portion of your portfolio that is currently held in non-dollar currencies.  That portion of your portfolio should equal exactly zero to begin with.  Unless you are currency speculator, but that's speculating, not investing. 

Your whole analysis breaks down breaks because you are assuming there is such a thing as adoption of Bitcoin.  There isn't.  Almost no one uses it for anything.   The only people who need Bitcoin are child pornographers and drug dealers.  For everybody else, the USD works perfectly.  And even if you are a child pornographer or drug dealer, you still don't need Bitcoin.  You could use Litecoin, or Dogecoin, or Etherium, or Fidleius, or any of a zillion cryptos out there. 

No one, repeat no one, invests in Bitcoin.  People speculate in Bitcoin.  If you want to speculate, more power to ya.  But you are a damn fool if you think speculation is the same as diversification.

Hey Telecaster! 

I won't debate whether the USD works perfectly or whether people are actually using BTC.  The idea is simply that in some potential future timelines there are scenarios where bitcoin adoption becomes widespread, and since its value is tied to usage rate, in those scenarios the value will likely be quite high.  Owning some will provide financial advantages in those timelines. 

I see from the child pornographer comment that you have strong emotional responses to crypto.  This post isn't for you, then, as you don't seem to want to understand it, and that's okay.

Thanks for the warm welcome. :)

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #912 on: February 12, 2018, 09:13:27 AM »


I was excited to see a crypto discussion thread here on MMM forum, it's disappointing it's devolved so much. I have been researching cryptocurrencies and will do my best to provide some useful information.  Disclaimer: I hold BTC and a selection of alts, in an amount that I'm comfortable losing.



Wow.  First post is a bit of lip-service to MMM principles followed by a long articulate defense of cryptos on what I'm sure many of us were hoping would become a dead thread.  Bravo... Slow clap...

Your devolution is another's evolution.  I'm frankly glad that the resident crypto shills had mostly given up... or at least given it a rest for the time being.  The MMM investing forum was turning into a crypto battleground, that I think was distracting forum members from the true goal of investing which is to become financially secure and/or independent.

Since you have been "powering through the blog," then I'm sure you are by now aware that MMM himself has called bullshit on bitcoin ( http://www.mrmoneymustache.com/2018/01/02/why-bitcoin-is-stupid/ ). So you should not be surprised to find folks around here to be against cryptos.  If you want to talk cryptos, you can save yourself the trouble and just move along.  Or stay here but talk about literally anything else related to investing.  Expect to get horribly flamed if you continue to try to advance the pro-crypto agenda.  The anti-crypto members have a few things going for them: (1) foremost they are right, cryptos are basically B.S. and therefore it will be impossible to prove otherwise,  (2) many are much more intelligent and educated than you and have done more research than you and will systematically dissect any B.S. pro-crypto argument, and (3) many have likely been investing longer than you have been alive and have the experience needed to repel this sort of baloney.

Thank you for disclosing that you own cryptos and have a pecuniary interest*.  I think that is the most important part of your first post.  It's helpful for everyone to know that you are here talkin' your book and will profit if bitcoin goes back up.  There is basically no way for you to be objective.  We know that you will be completely unconvinced by any argument which would would suggest, imply, or prove that they shouldn't go up in price.   

*Disclaimer: I do not own an interest, long or short, in any bitcoins or other shit-coins.  I try to talk people out of them because they are used to finance criminal activity, terrorism, and rogue states.  And I think that they divert capital from legitimate financial markets where it would have been used to finance true economic growth.

Hey LAS,

There's a mod post on the first or second page of this thread asking users to refrain from flaming so that an objective discussion can take place.  I didn't know the consensus was that logical discussion should die.

I did read MMM's blog post about bitcoin.  He seems very good at creating content that will generate heaps of views, which is great because the majority of what is on here is extremely valuable info that should be mandatory reading in high school economics classes.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #913 on: February 12, 2018, 09:19:00 AM »
My personal interpretation of Mustachianism is to work hard and live frugally such that we will be financially sound across as many possible future scenarios as possible.

You've missed the sustainability and environmental aspects of MMM.  These are fundamental values of MMM.  Cryptos are so incredibly wasteful when it comes to the energy.

Supporting crypto is like driving a gigantic gas guzzling $100k SUV to work 100 miles each way and say it's ok because you can easily afford it.  Also, you leave it running all day while you work.

Hey bender,

Environmental sustainability is the most important issue facing everyone alive today.

Sustainable energy is often the cheapest energy, and thus mining companies are gravitating towards it faster than traditional companies.

It's difficult to use the eco argument as a pro-finance, anti-crypto stand as owning a US stock index means you directly profit off of the countless oil/gas/coal fossil fuel companies that are destroying our planet and lobbying our government for the rights to do so at greater rates.

Personally I do not run any mining rigs, and I am extremely conscious of my own carbon footprint.  If everyone in america behaved in a mustachian way we could be well on our way to reversing co2 emmisions imo.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #914 on: February 12, 2018, 09:37:14 AM »

Facepunch.



I just punched myself in the face on accident putting my wetsuit on.  Chipped my incisor a bit. :(   Message received lol.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #915 on: February 12, 2018, 09:47:48 AM »
LAS,

It's also worth a bit of perspective that everyone here, and in every finance forum, is "talkin their own book" as you call it, in that they all benefit if new investors join the stock market investing pool.  We do not write off their expertise because of financial self-interest.

There are many possible future scenarios.  I'd like to be set in all of them. 

Several scenarios, with wildly different probabilities:

1) Status quo maintained, cryptos eventually wither to nothingness.  (likely)

2) Status quo maintained, cryptos eventually boom.  (likely)

3) Stock markets falter (very unlikely)

4) USD falters (exceedingly unlikely)

 

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #916 on: February 12, 2018, 10:09:32 AM »
The anti-crypto members have a few things going for them: (1) foremost they are right, cryptos are basically B.S.

I'll voice the opposite.

Anti-crypto and skeptics are wrong. I predict a future where most of the modern world will be using crypto, whether they are aware of it or not.

TheAnonOne

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #917 on: February 12, 2018, 10:27:58 AM »
I own maybe 20k worth of LITECOIN.

That being said I own 400k worth of VTSAX.


I don't get why people feel so strongly either way, Litecoin is actually being taken as tax payment in Arizona and can be used for transactions at some stores.

LITEPAY already soft-launched with a bigger release in the next few weeks. Given a 1-3% discount I may choose LTC over my rewards card.

I don't expect it to go "To the moon" but it's hardly devoid of value or uses.


EDIT: I don't want this to sound like an advert. It isn't I really don't care at this point what it does price wise. When I re-read this, it came off that way. Apologize for that. Also: LTC is basically just a less pricy BTC, the prices are linked in a soft sort-of-way and it is one of the main "non-scammy" alt-coins
« Last Edit: February 12, 2018, 10:35:20 AM by TheAnonOne »

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #918 on: February 12, 2018, 10:40:19 AM »
I own maybe 20k worth of LITECOIN.

I don't expect it to go "To the moon" but it's hardly devoid of value or uses.

I'm curious - why do you have $20k worth of it, if you don't expect it to appreciate in value? I have maybe $500 in actual cash at any given time, plus maybe $10k in a checking account, just because I'm too lazy to keep careful track of the balance and want to make sure I don't bounce any checks. And that's arguably way too much cash, really. I should have more of it invested in something.

So why $20k worth of crypto? Do you expect to pay $20k in AZ taxes in April or something? Do you have massive amounts of litecoin going in/out at any given time and need that balance to make sure you don't get caught short? Something else?

-W

Travis

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #919 on: February 12, 2018, 10:56:40 AM »
My personal interpretation of Mustachianism is to work hard and live frugally such that we will be financially sound across as many possible future scenarios as possible.

You've missed the sustainability and environmental aspects of MMM.  These are fundamental values of MMM.  Cryptos are so incredibly wasteful when it comes to the energy.

Supporting crypto is like driving a gigantic gas guzzling $100k SUV to work 100 miles each way and say it's ok because you can easily afford it.  Also, you leave it running all day while you work.

Hey bender,

Environmental sustainability is the most important issue facing everyone alive today.

Sustainable energy is often the cheapest energy, and thus mining companies are gravitating towards it faster than traditional companies.

It's difficult to use the eco argument as a pro-finance, anti-crypto stand as owning a US stock index means you directly profit off of the countless oil/gas/coal fossil fuel companies that are destroying our planet and lobbying our government for the rights to do so at greater rates.

Personally I do not run any mining rigs, and I am extremely conscious of my own carbon footprint.  If everyone in america behaved in a mustachian way we could be well on our way to reversing co2 emmisions imo.

So we're clear on this point: the consumption of oil/gas/coal that drive the economies of most of the world and have tangible daily benefits is comparable to a speculative barely-used currency with little immediate economic benefit that has been consuming so much energy it would rank in the upper third of nations if it were a nation itself?  Crypto mining has had sketchy profitability lately, and even if Bitcoin went mainstream as a currency like you suggest where does the mining/energy consumption end?  The models suggest mining could take decades with energy consumption increasing exponentially. 

thenextguy

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #920 on: February 12, 2018, 12:34:23 PM »
Quote
In a new post today, Microsoft announced their embrace of public blockchains, such as Bitcoin and Ethereum, for use in decentralized identity systems. Initially, the longtime tech giant will support blockchain-based decentralized IDs (DIDs) through the Microsoft Authenticator app.

More: Microsoft To Embrace Decentralized Identity Systems Built On Bitcoin And Other Blockchains

Finallyunderstand

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #921 on: February 12, 2018, 12:54:47 PM »
I own maybe 20k worth of LITECOIN.

I don't expect it to go "To the moon" but it's hardly devoid of value or uses.

I'm curious - why do you have $20k worth of it, if you don't expect it to appreciate in value? I have maybe $500 in actual cash at any given time, plus maybe $10k in a checking account, just because I'm too lazy to keep careful track of the balance and want to make sure I don't bounce any checks. And that's arguably way too much cash, really. I should have more of it invested in something.

So why $20k worth of crypto? Do you expect to pay $20k in AZ taxes in April or something? Do you have massive amounts of litecoin going in/out at any given time and need that balance to make sure you don't get caught short? Something else?

-W

I would venture to guess he didn't start with $20k worth of litecoin but that it grew to that amount.  I did the same thing last summer.  Bought 100 litecoin around $60-70 per coin and then sold out around $210.  It was a venture into something new and pure speculation on my part.  I don't know what to believe will happen in the future.  I made money on crypto and got out.  I didn't get out at the top because litecoin went up to $360 or so and then back to $140 and then up to $305 and then back to $104 and now at $160.  I sold during that rollercoaster somewhere.

BattlaP

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #922 on: February 12, 2018, 02:29:20 PM »
LAS,

It's also worth a bit of perspective that everyone here, and in every finance forum, is "talkin their own book" as you call it, in that they all benefit if new investors join the stock market investing pool.  We do not write off their expertise because of financial self-interest.

There are many possible future scenarios.  I'd like to be set in all of them. 

Several scenarios, with wildly different probabilities:

1) Status quo maintained, cryptos eventually wither to nothingness.  (likely)

2) Status quo maintained, cryptos eventually boom.  (likely)

3) Stock markets falter (very unlikely)

4) USD falters (exceedingly unlikely)

If you allocated 1% of your portfolio to every scheme or technology that could theoretically boom in value you’ll very quickly have a portfolio that is 100% rubbish. Even if your number 2 outcome came about (and I also thoroughly disagree with your ridiculous assessment there of ‘likely’) the chance of ‘cryptos eventually boom’ meaning that the Bitcoin you’re holding today specifically represents that future value is exceedingly unlikely.

Also love your unsubtle accusation that MMM’s bitcoin post was clickbait. Your eyes obviously glazed over when reading the actual content of the article.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #923 on: February 12, 2018, 03:18:30 PM »

If you allocated 1% of your portfolio to every scheme or technology that could theoretically boom in value you’ll very quickly have a portfolio that is 100% rubbish. Even if your number 2 outcome came about (and I also thoroughly disagree with your ridiculous assessment there of ‘likely’) the chance of ‘cryptos eventually boom’ meaning that the Bitcoin you’re holding today specifically represents that future value is exceedingly unlikely.

Also love your unsubtle accusation that MMM’s bitcoin post was clickbait. Your eyes obviously glazed over when reading the actual content of the article.

Agree completely that if you allocate even 0.5%-1% of your portfolio to every random scheme that could theoretically boom it would quickly become diluted.  It's imperative to make every financial decision based on logic and sound reasoning rather than emotions.

Most of MMM's posts have catchy, emotionally charged titles that attract viewership.  A big part of his success is his showmanship and ability to portray financial responsibility and consumer restraint as something awesome, which it is.

I thoughtfully read his bitcoin post.  He said he did extensive research, and I believe him. 

His response was emotionally charged and included straw man arguments.  He was either unable to see past his own filters, something that happens to all of us at different times, or chose to express a wholehearted condemnation in an effort to protect those of the community that might do something foolish such as sink their net worth into such a high volatility instrument.  Either way it was not an analytical assessment so much as an emotional one.

So far all the responses include assumptions about who I am and what I believe. I'm about as logical a person as you might ever come across and will be happy to consider analysis to the contrary and incorporate it when it has higher value.

Your point about the likelihood of bitcoin representing the primary value added in the end is an important one.  There are countless alts out there and history has shown that the earliest entrant into a space is not always, or even often, the eventual winner.

Firstly, the road between where we are and the ultimate end point is a continuous one.  New data come to light and revisions can be made along the way.  If other technologies show advantages over btc an educated investor can migrate ownership to the more promising projects and sell his/her btc.

Secondly, btc is closer in entity to the linux project(open source community backed) than it is to facebook(closed source privately held corporation).  We're not waiting for the next great linux project to come along because it already provides the highest value in the space it occupies. 
Additionally the properties of network value(see metcalfe's law) indicate that the largest and most widely supported networks provide the highest value.  So long as that continues to be the case w/ btc then it is the leader and likely winner, as being the highest value network attracts more adoption and developer support.  This may change at some point and again, an educated investor will move to the most promising project at such a time.

As with all things, it's about risk management and estimations of outcomes based on a logical, statistical appraisal.

So you are correct, there are a host of other options and some of them may contain superior technology that eventually may overtake btc in utility, or may provide inspiration for btc improvements.  If one chooses to get into crypto it is important to keep tabs on the nearest competitors.

TheAnonOne

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #924 on: February 12, 2018, 03:29:41 PM »
I own maybe 20k worth of LITECOIN.

I don't expect it to go "To the moon" but it's hardly devoid of value or uses.

I'm curious - why do you have $20k worth of it, if you don't expect it to appreciate in value? I have maybe $500 in actual cash at any given time, plus maybe $10k in a checking account, just because I'm too lazy to keep careful track of the balance and want to make sure I don't bounce any checks. And that's arguably way too much cash, really. I should have more of it invested in something.

So why $20k worth of crypto? Do you expect to pay $20k in AZ taxes in April or something? Do you have massive amounts of litecoin going in/out at any given time and need that balance to make sure you don't get caught short? Something else?

-W

I would venture to guess he didn't start with $20k worth of litecoin but that it grew to that amount.  I did the same thing last summer.  Bought 100 litecoin around $60-70 per coin and then sold out around $210.  It was a venture into something new and pure speculation on my part.  I don't know what to believe will happen in the future.  I made money on crypto and got out.  I didn't get out at the top because litecoin went up to $360 or so and then back to $140 and then up to $305 and then back to $104 and now at $160.  I sold during that rollercoaster somewhere.


Pretty much this, I have no real intention of selling it yet. The big "Crash" seems to mostly be over and it could conceivably skyrocket in another speculation explosion. So I guess I am speculating after all.

Oh well.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #925 on: February 12, 2018, 03:51:29 PM »
So we're clear on this point: the consumption of oil/gas/coal that drive the economies of most of the world and have tangible daily benefits is comparable to a speculative barely-used currency with little immediate economic benefit that has been consuming so much energy it would rank in the upper third of nations if it were a nation itself?  Crypto mining has had sketchy profitability lately, and even if Bitcoin went mainstream as a currency like you suggest where does the mining/energy consumption end?  The models suggest mining could take decades with energy consumption increasing exponentially.

To clear up a couple points:
-energy consumption did increase during 2017, mostly due to new mining companies.  It is not required, however, for it to continue to increase.  Second layer protocols would allow for using the current energy consumption to stay flat and number of transactions to increase exponentially.
-more transactions do not require more electricity. the hash difficulty is adjusted automatically regularly based on the mining available which is independent of the number of transactions
-as crypto mining profitability drops off, so does the number of crypto miners.  This will reduce energy consumption.
-most new crypto mining facilities are being centered around sustainable energy sources, moving off of fossil fuels at a very rapid pace.
-one core of MMM philosophy is that the current state of fossil fuel addiction in our society is both wasteful and unsustainable, and I agree.  Every single person who drives an AWD SUV around alone with no cargo is getting plenty of value from his waste, that value is just completely useless in our well-paved society. . 
-many of the companies in the index funds we all enjoy are making staggering amounts of money turning fossil fuels into plastics that pollute our planet at an ever increasing rate.  If environmental stewardship is important to you there's far more low hanging fruit for improvements to our world in existing wasteful industries than there is in crypto, which is deriving larger and larger shares of the electricity from sustainable sources and produces no physical waste products for consumption.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #926 on: February 12, 2018, 03:55:42 PM »
I really wanted to offer useful information to the community after reading the first page and seeing countless people expressing interest.  I was not wearing my flamesuit and this has been a rather unpleasant experience.

If anyone is interested I'd be happy to go into more detail about btc and alts, how to scout an alt and know what to avoid, etc.

If anyone would like to have a logical discussion about it or has new / useful information I would be excited to hear that as well.

My wife is encouraging me to step away from the computer as she says I have a "helping addiction." I'm currently sweating through my shirt going through these vitriolic replies.  I'm glad I tried to provide value even if this didn't go well.

Thanks again for all the value this forum provides in all the other threads, I'm excited to be here and hoping to not get flamed out of my chair in other threads, though I tend to mostly lurk in forums.

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #927 on: February 12, 2018, 04:18:34 PM »
Next time, you might want to read a bit further, given that the first page of posts is ~8 months old. All the logical discussions you want to have have already happened. If you want to speculate on "currency", have at it. Lots of people like to pick stocks, play the options game, play nickel slots, etc. They're all bad ideas in general, but you can get lucky, too.

Now, if you have some Microsoft stock, blockchain might actually be making you richer soon...

-W

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #928 on: February 12, 2018, 05:00:32 PM »
Next time, you might want to read a bit further, given that the first page of posts is ~8 months old. All the logical discussions you want to have have already happened. If you want to speculate on "currency", have at it. Lots of people like to pick stocks, play the options game, play nickel slots, etc. They're all bad ideas in general, but you can get lucky, too.

Now, if you have some Microsoft stock, blockchain might actually be making you richer soon...

-W

The first attempts to discuss the merits of different cryptos devolved quickly into back and forth ad hominem attacks and useless debates on semantics. There was very little utility for anyone interested in actually learning how to get involved in the space.

My aim was to bring quality information as there's a learning curve and I felt I could offer value back to a site that had given me much value.  The first couple pages had many one line responses to the effect of "interested" or "following" and that high quality discussion never materialized.
Ripple, for example, has a huge market cap relative to other alts yet has pretty dismal fundamentals and is worth avoiding.

My retirement account includes funds that contain microsoft stock, as with most of you, so that's good news for all of us.

BattlaP

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #929 on: February 12, 2018, 05:33:09 PM »
Next time, you might want to read a bit further, given that the first page of posts is ~8 months old. All the logical discussions you want to have have already happened. If you want to speculate on "currency", have at it. Lots of people like to pick stocks, play the options game, play nickel slots, etc. They're all bad ideas in general, but you can get lucky, too.

Now, if you have some Microsoft stock, blockchain might actually be making you richer soon...

-W

The first attempts to discuss the merits of different cryptos devolved quickly into back and forth ad hominem attacks and useless debates on semantics. There was very little utility for anyone interested in actually learning how to get involved in the space.

My aim was to bring quality information as there's a learning curve and I felt I could offer value back to a site that had given me much value.  The first couple pages had many one line responses to the effect of "interested" or "following" and that high quality discussion never materialized.
Ripple, for example, has a huge market cap relative to other alts yet has pretty dismal fundamentals and is worth avoiding.

My retirement account includes funds that contain microsoft stock, as with most of you, so that's good news for all of us.

You don’t seem to understand or want to acknowledge that the actual ‘quality information’ available on the topic inevitably leads to the conclusion that your money is better placed elsewhere. Discussion of how to get involved has rightly been trumped in this thread by the discussion about why you should even bother.

This thread needs to stay dead. I especially despair at it being revived by people whose only posts on the entire forum have been solely about crypto. Start somewhere else man, I’m sure you’ve got plenty other contributions to make.

Travis

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #930 on: February 12, 2018, 05:56:53 PM »

-many of the companies in the index funds we all enjoy are making staggering amounts of money turning fossil fuels into plastics that pollute our planet at an ever increasing rate.  If environmental stewardship is important to you there's far more low hanging fruit for improvements to our world in existing wasteful industries than there is in crypto, which is deriving larger and larger shares of the electricity from sustainable sources and produces no physical waste products for consumption.

I can multitask.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #931 on: February 12, 2018, 09:31:34 PM »
News broke today that JP Morgan's global research division published a report that cryptocurrency "could potentially have a role in diversifying one's global bond and equity portfolio."

They are quite cautious about it, rightly so.  The volatility now is intense as the market is so young, and their vision is towards a near future when the market is more mature and more widely acceptable for everyday investment.
 
IMO anyone with a short timeline is either gambling, or daytrading, or both. 

https://www.americanbanker.com/news/jpmorgan-cryptocurrencies-could-potentially-have-a-role-in-investor-portfolios

Also from JP Morgan global research division, bullet point #10 highlights cryptocurrencies in their "10 facts for corporate decision making for 2018":

https://www.jpmorgan.com/country/US/EN/cib/investment-banking/corporate-finance-advisory/striking-facts-2018?source=cib_di_jp_2dis917

And that's it, I'm out.  If anyone wants to talk feel free to msg me, I'm done being flamed for trying to help, and then being trolled for a sincere post about how I was trying to add value to the forums.  Class acts all around.

We all have step 4 lurking over us:
https://waitbutwhy.com/2014/10/religion-for-the-nonreligious.html

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #932 on: February 12, 2018, 09:51:15 PM »
I think owning index funds already gives you exposure to whatever utility/value blockchain tech eventually provides (or not). I don't have any interest in owning tokens that may or may not be worth anything in the future (that includes dollars) - I want to own companies, or real estate, or commodities that have actual uses. The minimum number of dollars/yen/Chuck-E-Cheese money to allow me to buy and sell stuff without hassle is plenty.

Assuming you're sincere in your belief that you want to help people out, spend a few months participating in the rest of the forum. Crypto is a sideshow of a sideshow here. Then read through any remaining crypto threads and see if you actually have something new to say. If you do, we'll all be interested to hear it.

-W

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #933 on: February 13, 2018, 10:26:50 AM »
And that's it, I'm out.

Great - let's all get out of crypto and out of this thread.  Mods please lock it down... 🔒

Man you sure are proud of yourself for your ability to stomp out logical discussions.

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #934 on: February 13, 2018, 12:55:43 PM »
Man you sure are proud of yourself for your ability to stomp out logical discussions.

Dude, you jumped into a HUGe thread that's 8 months old and regurgitated stuff that has already been said (and broadly rejected). What did you expect to happen?

Also, if you're gonna flounce, flounce, man!

-W

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #935 on: February 13, 2018, 01:09:59 PM »
Man you sure are proud of yourself for your ability to stomp out logical discussions.

Dude, you jumped into a HUGe thread that's 8 months old and regurgitated stuff that has already been said (and broadly rejected). What did you expect to happen?

Also, if you're gonna flounce, flounce, man!

-W

I get it, you and LAS and tele and sol are all fully anti-crypto and unwilling to absorb any new information at this point. That's fine, I didn't post for you, I posted for the dozens of other members who expressed interest in obtaining high quality information.

I presented many concepts found nowhere else in this thread - Metcalfe's law, harvard business review evaluation of blockchain/bitcoin impact on society and inversion of traditional blockchain disruption theory, core concept of diversification as a small percent of portfolio into crypto and the reasons why some may find it useful(which within the week found support from JPMorgan global review!), and began to offer my personal observations over several years of market trends having studied them in real time.  I have no TA background and purely approach from fundamentals / long term standpoint so I stuck to what I had studied.

The anti-crypto contingent stomped me into the ground, one guy literally said he was punching me in the face, replied with straw man attacks about child pornographers, without parsing ANY of the high quality information I provided. So YEAH, i'm a little frustrated that i spent hours trying to help and got this in return.

It is your right to put your money where you please.  Other members of the community may decide to look into crypto and I was trying to give high quality info to reduce the number of people who got burned making completely avoidable errors and help any who were interested in making more educated choices.  I got nowhere near that point because I got shouted down instantly.

As I said before, class acts all around.

edit: the last post prior to mine was 5 days ago. it was still on the front page. I didn't necro an 8 month gone thread.
edit2: this forum is under "Learning, Sharing, and Teaching" and I naturally gravitated to this section when I first decided I wanted to contribute.  Crypto is in my wheelhouse and anything I had to say about conventional investing would be worse than useless so I don't say anything there.
« Last Edit: February 13, 2018, 01:12:01 PM by Surf »

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #936 on: February 13, 2018, 01:25:05 PM »
"Facepunching" is a MMM forum term of art to refer to brutal honesty. Many threads are titled things like "Hair on fire debt emergency, facepunches solicited!"  Nobody was threatening you with any physical harm.

Again, if you'd bothered to read up a bit first and get familiar with this forum, you still probably wouldn't have found much agreement, but at least the general reaction wouldn't have surprised/upset you.

-W

sherr

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #937 on: February 13, 2018, 01:28:38 PM »
The anti-crypto contingent stomped me into the ground, one guy literally said he was punching me in the face, replied with straw man attacks about child pornographers, without parsing ANY of the high quality information I provided. So YEAH, i'm a little frustrated that i spent hours trying to help and got this in return.

You should know that a "facepunch" is MMM parlance for calling someone out for unmustachian behavior. Usually being unnecessarily spendy or purchasing flashy luxury goods, but can be applicable to other things too. And since MMM himself has come out as anti-crypto, it's probably not a stretch to call a pro-crypto position "unmustachian".

So that's not nearly as aggressive of a phrase as you seem to have taken it.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #938 on: February 13, 2018, 01:37:04 PM »
Thank you for the clarification I am fully aware of the MMM facepunching reference, I spent a week tearing through MMM blog posts and forum posts before feeling like the value I had obtained warranted me making an effort to give back. 

The poster said Facepunch not "I'm going to punch you in the face" so i got the distinction.  It is still a brutally unpleasant and unsolicited rejection of a reasoned and analytical gesture of goodwill that took me several hours to put together with the intention of adding value to this community.  It was not offered with good will, or with "hey let me help you out," but a closeminded rejection of my ability to contribute value because he disagreed with the fundamental premise that crypto is actually a thing.

Again there's this continuous undercurrent taht I'm some sort of outsider with assumptions about ulterior motives and whether or not I have hte right to contribute here that is xenophobic and disturbing.
« Last Edit: February 13, 2018, 01:41:03 PM by Surf »

sherr

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #939 on: February 13, 2018, 02:16:05 PM »
All right, I've got an honest question for you surf (but if you choose not to reply and bow out of the thread I understand).

You've stated that you believe Bitcoin should be people's primary crypto investment because:
A) it is the coin-of-reference in the crypto world. Eg. people buy Bitcoin with USD, and then trade Bitcoin for other alts.
B) even if Bitcoin is not the long-term cryptocurrency the transition would be gradual, and that people should re-evaluate as more information comes to light.

It seems to me that A is entirely for historical reasons and is becoming less relevant all the time, and that B is not necessarily true at all.

Bitcoin is the coin-of-reference because it was first and was always the "biggest" (in mindshare at least) even after others entered the market. So the banked exchanges allowed you to purchase Bitcoin, and the unbanked exchanges gave you the opportunity to trade all the others. However that's becoming less true as time goes on. Coinbase for example now allows you to directly purchase Bitcoin, Etherium, and Litecoin. I can't imagine that that list will ever shrink; it doesn't take much effort to continue allowing already-written code to run. And more options will be added.

It seems to me that Bitcoin has no use other than as a coin-of-reference at the moment. Very few actual purchases are transacted through Bitcoin, and the merchant support for alts will grow. There are already other coins that are faster and cheaper by design than Bitcoin could ever be. Merchants will never price things directly in Bitcoin because of its volatility.

It seems to me that Bitcoin is already useless and has no future, and the only thing preventing its plummet is the mob mentality agreeing that it's valuable. And one day that will probably change, and everyone will abandon Bitcoin and jump to the New Thing (and then probably eventually the one after that, and the one after that, etc). Maybe it will be Litecoin, or Bitcoin Cash, or Dogecoin (probably not, but I'm rooting for that little guy), or Ripple, or something as-yet undeveloped. But it should eventually happen.

And when it does, there's no reason to think that it would be (B) slow or gradual and allow people the opportunity to rebalance their "investments". Crypto crashes happen incredibly quickly. Selling everything in the middle of a panic crash is usually something everyone tells you is incredibly foolish. Except it's not in this case. A crash in Bitcoin while another stronger coin surges probably would be the trigger that changes the mob mentality. If that happens, and people collectively decide that Litecoin (or whatever) is the new Bitcoin, then not selling in the middle of the crash (assuming you can find anyone to buy at any price) would be the wrong choice and would leave you owning a lot of nothing, forever.

So I guess my question is, why am I wrong?
« Last Edit: February 13, 2018, 02:19:15 PM by sherr »

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #940 on: February 13, 2018, 02:36:45 PM »
Again there's this continuous undercurrent taht I'm some sort of outsider with assumptions about ulterior motives and whether or not I have hte right to contribute here that is xenophobic and disturbing.

Haha! Xenophobic?!? Really? People disagreeing with you is actually allowed here, you know. You're not required to have a huge post count to be taken seriously, but when you post something that almost nobody agrees with, as your first post, and then you *whine* about things like xenophobia (after repeatedly claiming you aren't going to participate in the discussion anymore, then coming right back to whine more) and misinterpret a commonly used term from the forum... how do you think you end up looking?

-W

sol

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #941 on: February 13, 2018, 03:02:52 PM »
It's always hard for new people to learn the culture of an established community like this one. Unfortunately, surf jumped into this one head first without first reading enough to take the temperature of the room.

So I applaud the enthusiasm, but the planning was lacking and the execution fell flat.  Helpful posters with thoughtful content are always welcome, but you have to know your audience.  You'd get much the same reaction if you started out with a 5k word essay on which corvette is best for your mid life crisis, or the best city to buy a mcmansion, or the benefits of loan sharking.  Cryptocurrencies are just antithetical to the MMM philosophy. 

That should have been obvious from the blog, and it should have been obvious from reading forum posts.  In this case, it looks like surf was so keen to contribute that he/she didn't get far enough to figure that out.

Unfortunately, this forum is big enough and influential enough to have acquired a long history of paid shills who show up and promote a product or website under the guise of earnest friendly advice.  Like surf, they often post lengthy and well researched posts right out of the gate.  Like surf, they always deny they are paid advertisers.  Like surf, they are often treated unkindly by the forum members.

Surf, you write well and are welcome to join the community.  Would you still be interested if you were never allowed to talk about crypto again, or is that your only interest?  Because paid shills are usually single topic posters, which is what you appear to be now.

sol

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #942 on: February 13, 2018, 04:44:38 PM »
Stop the madness. 🔒

Oh, I don't know.  I think we benefit by swatting the flies.  Ridiculous posts need to be heard, and ridiculed.

Now I'm off to start a new thread about vitamix blenders.  Blenders have changed my life!

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #943 on: February 13, 2018, 06:51:09 PM »

I get it, you and LAS and tele and sol are all fully anti-crypto and unwilling to absorb any new information at this point.

For a guy who complains about ad ad hominems, you sure like to dish them out.  Go back and find an exactly where I attacked you, and not your argument.  Hint:  I only attacked your arguments.

Quote from: surf
The anti-crypto contingent stomped me into the ground, one guy literally said he was punching me in the face, replied with straw man attacks about child pornographers, without parsing ANY of the high quality information I provided. So YEAH, i'm a little frustrated that i spent hours trying to help and got this in return.

A "straw man" argument is misrepresenting someone's position in order to make it easier to attack.  The child pornographers bit wasn't a straw man, because it wasn't your argument.  It was my argument.  I was using hyperbole to make a point, namely there is very little legitimate use of Bitcoin.  Since your whole premise is based on the notion there will one day be wide adoption of Bitcoin, or at least some form of crypto, that's a critical point. 

Here's an example of a straw man:

Quote from: Surf
I won't debate whether the USD works perfectly or whether people are actually using BTC.

I never said the USD works perfectly.  You misrepresented what I said so you could avoid my point.  I just said that if you have concerns about hyperinflation, it makes no sense to invest in something that is currently experiencing hyperinflation.    That's just common sense, right?  But if that point is wrong, it would have a perfect time for you to explain how you arrived at that conclusion.  Showing your work, in other words.  Instead you just ran away. 

I appreciate it when some points out my fly is open.  If someone points out I'm doing something wrong, they are doing me a favor because then I can learn the right way to do it. 

Quote from: surf
It is your right to put your money where you please.  Other members of the community may decide to look into crypto and I was trying to give high quality info to reduce the number of people who got burned making completely avoidable errors and help any who were interested in making more educated choices.  I got nowhere near that point because I got shouted down instantly.

You got disagreed with instantly.   But instead of responding to those disagreements, you lashed out at the people disagreeing with you.   

That said, I'm here for the same reasons as you.  Help people avoid making mistakes. 

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #944 on: February 13, 2018, 09:08:09 PM »
All right, I've got an honest question for you surf (but if you choose not to reply and bow out of the thread I understand).

You've stated that you believe Bitcoin should be people's primary crypto investment because:
A) it is the coin-of-reference in the crypto world. Eg. people buy Bitcoin with USD, and then trade Bitcoin for other alts.
B) even if Bitcoin is not the long-term cryptocurrency the transition would be gradual, and that people should re-evaluate as more information comes to light.

It seems to me that A is entirely for historical reasons and is becoming less relevant all the time, and that B is not necessarily true at all.

Bitcoin is the coin-of-reference because it was first and was always the "biggest" (in mindshare at least) even after others entered the market. So the banked exchanges allowed you to purchase Bitcoin, and the unbanked exchanges gave you the opportunity to trade all the others. However that's becoming less true as time goes on. Coinbase for example now allows you to directly purchase Bitcoin, Etherium, and Litecoin. I can't imagine that that list will ever shrink; it doesn't take much effort to continue allowing already-written code to run. And more options will be added.

It seems to me that Bitcoin has no use other than as a coin-of-reference at the moment. Very few actual purchases are transacted through Bitcoin, and the merchant support for alts will grow. There are already other coins that are faster and cheaper by design than Bitcoin could ever be. Merchants will never price things directly in Bitcoin because of its volatility.

It seems to me that Bitcoin is already useless and has no future, and the only thing preventing its plummet is the mob mentality agreeing that it's valuable. And one day that will probably change, and everyone will abandon Bitcoin and jump to the New Thing (and then probably eventually the one after that, and the one after that, etc). Maybe it will be Litecoin, or Bitcoin Cash, or Dogecoin (probably not, but I'm rooting for that little guy), or Ripple, or something as-yet undeveloped. But it should eventually happen.

And when it does, there's no reason to think that it would be (B) slow or gradual and allow people the opportunity to rebalance their "investments". Crypto crashes happen incredibly quickly. Selling everything in the middle of a panic crash is usually something everyone tells you is incredibly foolish. Except it's not in this case. A crash in Bitcoin while another stronger coin surges probably would be the trigger that changes the mob mentality. If that happens, and people collectively decide that Litecoin (or whatever) is the new Bitcoin, then not selling in the middle of the crash (assuming you can find anyone to buy at any price) would be the wrong choice and would leave you owning a lot of nothing, forever.

So I guess my question is, why am I wrong?

Excellent points Sherr! 

On a periodic basis I re-evaluate if a bitcoin hold is still a logical proposition, I currently believe it is a profitable long term bet, but it is an admittedly risky one.  Healthy amounts of doubt about one's positions lead to analytic revision of incoming data.

A) bitcoin as coin-of-reference: it is more than just mechanics and btc facilitating transactions to other coins.

crypto traders value their investments using bitcoin as their frame of reference.  Entire crypto portfolios are valued by how much each alt is worth when it is converted to bitcoin, and when things get rough, or btc gets bullish that is what they do.  The "shitcoin" speculation of obscure alts within the crypto community is entirely based around creating an increased amount of bitcoin for the speculator/ TA trader.
 
There are other coins such as Eth that seek to offer a different type of value which can and do exist in parallel with btc.  They compete for investor money in the short term but occupy different tech territory in a longer timeline.  BTC currently cannot execute smart contracts the way eth can(though this is purportedly in the works), and eth is centralized and mutable and much more suitable as a platform for decentralized app development and an overall platform for incorporating blockchain tech esp into the corporate realm, rather than a global financial instrument.

The value of a blockchain can be best understood through metcalfe's law - the value of a communications network is the square of the participants.  This explains neatly (if imperfectly) why twitter is worth billions but the group chat with me and my aunt and grandma is worth nothing, other than to the 3 of us.

Market cap is misleading from this perspective. For example, bcash appears overvalued, it has a market cap 1/7th of btc.   

Number of transactions per day is one gauge of the overall participation rate on a blockchain. 

Bcash network averages roughly 20k transactions per day.  Bitcoin averages roughly 200k transactions per day.  Given a roughly equal number of users making transactions (which may be off by a moderate margin in either direction) Metcalfe's law indicates that this is not a 10 fold difference, rather an exponential difference in network utility.   The price gap is only a factor of 7, while from a value standpoint bitcoin may provide 100x utility(give or take reasonable calculation errors) over bcash!

This is purely on the network value, ignoring the infrastructure advantage bitcoin has over bcash(I can buy plane tickets or book hotels or buy goods online with btc, or convert to USD at bitcoin atms through the US, while bcash is much more difficult to spend. BTC is also legal tender in Japan) or the scaling issues bcash has - if it averaged the same number of transactions per day as bitcoin the fees would be higher by a factor of 2-4x depending on assumptions used.  Further this ignores the substantial developer community working on improving bitcoin protocols which is a large advantage over bcash's niche support.

Core features of bitcoins utility such as decentralization, immutability, and the game theory basis that maintains the integrity of the system originate from its design and utilization of Proof of Work. 
The microsoft blockchain analysis cited earlier in the thread assessed that alternate blockchains to btc sacrificed either decentralization or immutability or both in order to obtain advantages in speed and efficiency.  A SQL database on a server somewhere would vastly outperform bitcoin from a performance standpoint, but would have neither decentralization nor immutability and thus there would be no reason to trust it to authorize financial transactions.
 
Microsoft's conclusion was that second layer protocols to the bitcoin blockchain are the best solution for scaling without sacrificing the underlying fundamentals of btc and by and large the crypto community agrees.

B)  We don't know whether a theoretical flip to another dominant coin would be gradual or not.  If bitcoin were a valueless system that noone actually used then certainly the possibility for an extremely fast crash and replacement would be not just possible but probable.  Due to metcalfe's law if participation rate on the blockchains are 0 then all their values are 0 so substituting one for another should be probable and statistically happen by chance regularly.  That this has never happened or even come close certainly indicates that there are real humans obtaining real value and metcalfe's law has at least partial validity.

Humans are creatures of habit and as this entire crypto movement shows are slow to make change.  All the users out there utilizing btc for various reasons would have to abandon it at once, in unison.  That makes the "sudden plunge to 0" outcome less and less likely the more users are added to the base and the networks utility grows.  It is not impossible or even improbable, so "don't invest money you can't afford to lose" must be paramount.

It is important to consider that it can be very true that you personally have no use for bitcoin in its current form, and at the same time be true that people in other circumstances consider it invaluable.  And that in its future forms you may benefit from it substantially in either a passive or active capacity, or not, depending on its ultimate use cases.  The likelihoods of those various scenarios are where buying bitcoin to hold long term come into play.  Bitcoin's equilibrium value will depend directly on how many users it stabilizes at and only the future will tell what that is.

I will continue to keep tabs on the crypto space and will be prepared to move on from btc if or when such a time comes.  I will also be prepared to take small portions of btc and allocate them to potential tech that offers paradigm-shift style upgrades over bitcoin in the rare event that they come along.  I have only researched a couple dozen alts (there are 1500+) and acquired precious few.

As I proofread this post and review yours to make sure I responded to the important ideas you raised, it occurs to me that I may be Charlie Brown with the football here, and your entire post may have actually been an elaborate dismissal.   Fingers crossed!

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #945 on: February 13, 2018, 09:28:21 PM »

So I applaud the enthusiasm, but the planning was lacking and the execution fell flat.  Helpful posters with thoughtful content are always welcome, but you have to know your audience.  You'd get much the same reaction if you started out with a 5k word essay on which corvette is best for your mid life crisis, or the best city to buy a mcmansion, or the benefits of loan sharking.  Cryptocurrencies are just antithetical to the MMM philosophy. 

Surf, you write well and are welcome to join the community.  Would you still be interested if you were never allowed to talk about crypto again, or is that your only interest?  Because paid shills are usually single topic posters, which is what you appear to be now.

I Lol'd at the first part.  Well played sir.  The speculative frenzy surrounding cryptocurrencies is completely antithetical to the MMM philosophy, agreed.   The underlying technology is separate and it's one of the reasons it drives me nuts when my mom calls and says her friend told her to buy Ripple.(Anyone interested do some googling Ripple is basically everything bitcoin is not, and not in a good way)

FWIW there's no such thing as "paid shills" because there is no bitcoin corporation.

Finally I am excited to be a part of this community and if a mod forbade me from posting in crypto threads I would happily participate elsewhere.  FWIW I used the search function to look for existing threads on topics I have other expertise at, like surfing, with no success.  A finance forum is mostly about finance, I'm absorbing traditional finance info from you fine folks and have little to offer in that regard.  I guess I could start a thread asking for situation-specific help but I always feel weird leeching benefit from a community without contributing to it first.

Also, thank you for treating me like a human and not a troglodyte. It's refreshing.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #946 on: February 13, 2018, 09:42:42 PM »

So you're building your 'stash, paid down your high interest debt, and living frugally. So why invest in crypto?

Cryptocurrencies' main role in a modern portfolio is diversification

Facepunch.

If you assume that crypto currencies are actually currencies (which is a stretch, but let's assume that for now), then crypto should replace or supplement the portion of your portfolio that is currently held in non-dollar currencies.  That portion of your portfolio should equal exactly zero to begin with.  Unless you are currency speculator, but that's speculating, not investing. 

Your whole analysis breaks down breaks because you are assuming there is such a thing as adoption of Bitcoin.  There isn't.  Almost no one uses it for anything.   The only people who need Bitcoin are child pornographers and drug dealers.  For everybody else, the USD works perfectly.  And even if you are a child pornographer or drug dealer, you still don't need Bitcoin.  You could use Litecoin, or Dogecoin, or Etherium, or Fidleius, or any of a zillion cryptos out there. 

No one, repeat no one, invests in Bitcoin.  People speculate in Bitcoin.  If you want to speculate, more power to ya.  But you are a damn fool if you think speculation is the same as diversification.

I bolded the parts where you either insulted me directly, said "USD works perfectly" or made up an argument that btc's only use case is child pornographers/drug dealers.

Also Facepunch is not a useful way to begin a reasoned discussion.

Your reply was the FIRST one to a logic-driven analysis trying to open up high quality discussion following the parameters set by the mod on the first page.  That I foolishly spent hours on and literally lost sleep to write.

I've done my best to keep my replies civil but the wheels start to fall off after awhile. Helping others is a high value priority for me and every time I try to make it better and it gets worse and I see replies treating me like some sort of scum it is painful. I'm only still here "complaining" and changing my sweaty shirt regularly because I'm trying to not completely throw in the towel on providing some value to those who might be reading but not posting, as I often do.

Also it's really hard not to reply when people are harsh and then lord it over you when you give up. I'm human.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #947 on: February 13, 2018, 09:49:05 PM »
Again there's this continuous undercurrent taht I'm some sort of outsider with assumptions about ulterior motives and whether or not I have hte right to contribute here that is xenophobic and disturbing.

Haha! Xenophobic?!? Really? People disagreeing with you is actually allowed here, you know. You're not required to have a huge post count to be taken seriously, but when you post something that almost nobody agrees with, as your first post, and then you *whine* about things like xenophobia (after repeatedly claiming you aren't going to participate in the discussion anymore, then coming right back to whine more) and misinterpret a commonly used term from the forum... how do you think you end up looking?

-W

You're right, I do not take harsh criticism well.

Also I knew as soon as I was being all dramatic writing about the "Facepunch" comment that it was going to be mis interpreted as lack of understanding of the community.  It's hard to explain but I was so stunned that the first word of the first reply was an allusion to physical violence to me.  Even though I knew it was within the mustachian spirit(if certainly not kind), that I literally punched myself in the face putting my wetsuit on I was so shaken up. I've done that like twice in my entire life. 

(for non-surfers: when you pull on a thick wetsuit you have to grab the shoulder cuff area and stuff your arm through it.  If you pull too hard on the shoulder section as you slide your arm through, and simultaneously lose your grip, you can accidentally punch yourself in the face.  My sweaty palms didn't help I'm sure.)

I was having a bit of a dramatic moment as my hope to bring logical value and discussion to the messy back-and-forth was completing its implosions.  My apologies.

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #948 on: February 13, 2018, 09:57:39 PM »
crypto traders value their investments using bitcoin as their frame of reference.  Entire crypto portfolios are valued by how much each alt is worth when it is converted to bitcoin, and when things get rough, or btc gets bullish that is what they do.  The "shitcoin" speculation of obscure alts within the crypto community is entirely based around creating an increased amount of bitcoin for the speculator/ TA trader.

You can't qualify this for all crypto traders. These statements are not wholly true. Many people do not acquire other coins to increase their bitcoin stack.
 
Quote

There are other coins such as Eth that seek to offer a different type of value which can and do exist in parallel with btc.  They compete for investor money in the short term but occupy different tech territory in a longer timeline.  BTC currently cannot execute smart contracts the way eth can(though this is purportedly in the works), and eth is centralized and mutable and much more suitable as a platform for decentralized app development and an overall platform for incorporating blockchain tech esp into the corporate realm, rather than a global financial instrument.

Eth is not centralized. Eth is as immutable as bitcoin. Your statements about eth are untrue.

Quote
The value of a blockchain can be best understood through metcalfe's law - the value of a communications network is the square of the participants.  This explains neatly (if imperfectly) why twitter is worth billions but the group chat with me and my aunt and grandma is worth nothing, other than to the 3 of us.

Network effects are meaningless metric for bitcoin relative to other blockchains. In blockchains, network effect can be replicated and is not exclusive to bitcoin. Network effects, in the current phase of crypto, are also very fleeting.

Quote
Market cap is misleading from this perspective. For example, bcash appears overvalued, it has a market cap 1/7th of btc.   

Number of transactions per day is one gauge of the overall participation rate on a blockchain. 

Bcash network averages roughly 20k transactions per day.  Bitcoin averages roughly 200k transactions per day.  Given a roughly equal number of users making transactions (which may be off by a moderate margin in either direction) Metcalfe's law indicates that this is not a 10 fold difference, rather an exponential difference in network utility.   The price gap is only a factor of 7, while from a value standpoint bitcoin may provide 100x utility(give or take reasonable calculation errors) over bcash!

These are assumptions and are not conclusive.

Quote
The microsoft blockchain analysis cited earlier in the thread assessed that alternate blockchains to btc sacrificed either decentralization or immutability or both in order to obtain advantages in speed and efficiency.  A SQL database on a server somewhere would vastly outperform bitcoin from a performance standpoint, but would have neither decentralization nor immutability and thus there would be no reason to trust it to authorize financial transactions.
 
Microsoft's conclusion was that second layer protocols to the bitcoin blockchain are the best solution for scaling without sacrificing the underlying fundamentals of btc and by and large the crypto community agrees.

It's not clear yet how or which ones microsoft will coordinate layer 2 protocols on. "Some public blockchains (Bitcoin [BTC], Ethereum, Litecoin, to name a select few) provide a solid foundation for rooting DIDs, recording DPKI operations, and anchoring attestations....To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID system."

https://cloudblogs.microsoft.com/enterprisemobility/2018/02/12/decentralized-digital-identities-and-blockchain-the-future-as-we-see-it/

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #949 on: February 13, 2018, 10:04:04 PM »
I just said that if you have concerns about hyperinflation, it makes no sense to invest in something that is currently experiencing hyperinflation.    That's just common sense, right?  But if that point is wrong, it would have a perfect time for you to explain how you arrived at that conclusion.  Showing your work, in other words.  Instead you just ran away. 

My apologies, I didn't think you were actually trying to raise that as a logical point of discussion.  I did run away after all the facepunching. Actually, I went surfing. It was nice, and helped me clear my head.

Agreed, trying to protect from hyperinflation by investing in something hyperinflationary would make no sense whatsoever.

I can't tell if you really want me to answer this or if you are just throwing me a bone. Here goes:

Bitcoin experienced a speculative frenzy-bubble pop cycle at the end of Q4 '17 and beginning of Q1 '18. This has happened on multiple occasions across its history.
 
Using a tiny sample such as the prior 8 weeks of purchasing power loss without accounting for coin supply/cap, long term trends, or analysis of how a diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure appeared to be willful ignorance and signaled an end to logical debate.  I guess I misinterpreted?