Author Topic: Our Crypto Investment strategy (slow and steady investing for the win)  (Read 12744 times)

jojoguy

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I am starting to dabble in crypto-banking recently. Something that is really catching my eye is Terra Luna. There are so many things attractive about it for diversity on both the conservatively low-risk side and higher risk side.

BicycleB

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ETA: Re-reading @Eco_eco 's original post, I see that two of his/her original yield strategies was defi (decentralized) lending and cefi (centralized) lending. I think that lending here means issuing more stablecoins than actual dollars received, effectively re-inventing fractional reserve banking under a different name in a so-far-somewhat-unregulated space. Obviously IF it works, could be profitable. Depends on details. I admit that I don't quite follow the interest mechanism exactly, or whatever replaces borrower interest in these models. As stated, awaiting wiser posters' insight.

The other yield strategies OP mentioned were both mining. I suppose that the "yield" there isn't interest like a bond, but rather a description of some process where the investor actually calculates part of the blockchain and sells the resulting coins, presumably at a profit compared to the calculating/mining cost. I guess the gain could either be due to mining efficiency, or price increases if the coin value rises for some reason. Maybe OP will clarify?

I’m a he.

I’ve answered some of this in my post just above this one about where the value in cryptos comes from.

I was thinking of yield as any increase in value which is derived from the underlying investment (as opposed to profit from a sale of the initial investment it’s self). Ie for a rental property the rent is my yield, for a stock the dividend is my yield. As per my first post I’m not chasing speculative gain, I generally have a ‘never sell the capital’ approach to investing.

In crypto world I currently make yield from the following. There are many ways to generate yield, but these are the ones that I use:

Defi: 
- transaction fees from decentralised exchanges
- interest from decentralised lending (ie I lend some of my Bitcoin and get an interest payment)

Cefi:
- interest paid by various providers such as Celsius and BlockFi. These providers act like a hedge fund and pay some of the profits as interest to depositors

Mining:
- proof of stake ‘mining’. Ie acting as a nominator in proof of stake networks which help (in a very small way) for the blockchain to be secured. This gains me inflationary rewards as in return of locking up my deposit in the network.

Sorry for the crypto jargon but hopefully this helps explain where I’m coming from.


Sent from my iPhone using Tapatalk

Thanks, @Eco_eco, and for your reply to @ysette9. This is helping.

onecoolcat

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Crypto = speculating, not investing.  GL.

Investing = speculating.  GL.
No, they are different.

Investing is putting money in something that has the capacity to produce value, whether through income streams or appreciation due to business growth, or paying back a loan (bond), etc.

Speculation is buying something in hopes that other people will be willing to pay more for the same thing at some point in the future.

"If you don't believe it or don't get it, I don't have the time to try to convince you, sorry" - Satoshi

theoverlook

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"If you don't believe it or don't get it, I don't have the time to try to convince you, sorry" - Satoshi

"It's a proprietary strategy. I can't go into it in great detail." -Madoff

EvenSteven

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"If you don't believe it or don't get it, I don't have the time to try to convince you, sorry" - Satoshi

"It's a proprietary strategy. I can't go into it in great detail." -Madoff

"You're either with us, or against us." -Rumsfeld

Glenstache

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"If you don't believe it or don't get it, I don't have the time to try to convince you, sorry" - Satoshi

"It's a proprietary strategy. I can't go into it in great detail." -Madoff

"You're either with us, or against us." -Rumsfeld
"We will never hear about people's Bitcoin accounts being frozen or seized by a government agency." - Roger Ver
https://www.justice.gov/opa/pr/department-justice-seizes-23-million-cryptocurrency-paid-ransomware-extortionists-darkside

effigy98

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Should have used a hardware wallet. That was not a bitcoin account Roger was talking about...  Why don't you do 5 minutes of research before you follow the propaganda herd. There are countless youtube videos for you scared of technology types that tell you how to program your VCR clock... er I mean hardware wallet.
« Last Edit: July 01, 2021, 11:09:44 AM by effigy98 »

theoverlook

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Yeah, that's the way to convince people.. insult them as luddites instead of treating them as people with legitimate concerns about the security of a financial instrument that has had literal billions of dollars worth of it stolen without recourse over the last few years.

If I had to have a "hardware wallet" to keep my vtsax safe, guess what - I wouldn't own vtsax. That's a dodge by someone that has no way to support their position.

Eco_eco

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Yeah, that's the way to convince people.. insult them as luddites instead of treating them as people with legitimate concerns about the security of a financial instrument that has had literal billions of dollars worth of it stolen without recourse over the last few years.

If I had to have a "hardware wallet" to keep my vtsax safe, guess what - I wouldn't own vtsax. That's a dodge by someone that has no way to support their position.
As crypto matures the need to hold your own coins in a hardware wallet is decreasing. There are now a fair number of well regulated companies which you can deposit with. In some ways putting crypto savings with several of them is as safe, or safer than using a hardware wallet (which you can make a mistake with, or loose and have forgotten to backup with a seed written on paper). These companies are making it a lot easier for people to access and use crypto.

That said, if you keep all of your crypto in one place, or on an exchange which is run by two guys in Africa, don’t be surprised when the money disappears.


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CrankAddict

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I laugh at how people debate what kind of wallet you need or which coin is most energy efficient but just gloss over the elephant in the room regarding this entire sector.  For context, I am a developer of complex software systems which secure the data of many of the world's largest companies.  I have been in this field for over 20 years.  Let me just make a blanket statement - software is shit.  I can leave it there, without qualification, and still be right 100% of the time with some minor rounding.  There is no other form of "engineering" in this world that is so sloppy.  You want to build a bridge or airplane, or develop a drug, or do pretty much anything other than software?  There are black and white practices, certifications, ISO standards, government agencies which act as watchdogs and on and on.  Sure, sometimes they miss the mark and things still fail.  But usually when a bridge or condo collapses we quickly hear about the failed inspection reports and we can see that the problem could at least be detected, even if people were too apathic to resolve it.  But for software?  Forget it.  Total wild west.  Littered with problems we don't even know about.  But hey, we've got auto-downloading updates!  If Ford put out a car and said "the wheels are probably going to fall off, but don't worry, we ship you new wheels every Friday for free" who would buy it?  They be sued and/or jailed, it's almost unthinkable.  But when my mother-in-law is in the hospital and they can't figure out which meds they have given her because their computers are currently down due to a ransomware attack (which exploited obvious and ridiculous flaws in their systems) who is on the hook?  The company being attacked gets to play the victim card.  None of the makers of any of the flawed software they were using are culpable.  We live in an insane world that keeps pushing more and more facets of our life towards software-based "solutions".  None of which work very well.  Do we really want to add national or global currency to that list?

Glenstache

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I laugh at how people debate what kind of wallet you need or which coin is most energy efficient but just gloss over the elephant in the room regarding this entire sector.  For context, I am a developer of complex software systems which secure the data of many of the world's largest companies.  I have been in this field for over 20 years.  Let me just make a blanket statement - software is shit.  I can leave it there, without qualification, and still be right 100% of the time with some minor rounding.  There is no other form of "engineering" in this world that is so sloppy.  You want to build a bridge or airplane, or develop a drug, or do pretty much anything other than software?  There are black and white practices, certifications, ISO standards, government agencies which act as watchdogs and on and on.  Sure, sometimes they miss the mark and things still fail.  But usually when a bridge or condo collapses we quickly hear about the failed inspection reports and we can see that the problem could at least be detected, even if people were too apathic to resolve it.  But for software?  Forget it.  Total wild west.  Littered with problems we don't even know about.  But hey, we've got auto-downloading updates!  If Ford put out a car and said "the wheels are probably going to fall off, but don't worry, we ship you new wheels every Friday for free" who would buy it?  They be sued and/or jailed, it's almost unthinkable.  But when my mother-in-law is in the hospital and they can't figure out which meds they have given her because their computers are currently down due to a ransomware attack (which exploited obvious and ridiculous flaws in their systems) who is on the hook?  The company being attacked gets to play the victim card.  None of the makers of any of the flawed software they were using are culpable.  We live in an insane world that keeps pushing more and more facets of our life towards software-based "solutions".  None of which work very well.  Do we really want to add national or global currency to that list?
Honest question: Do you differentiate between "software is shit" vulnerabilities for blockchain/digital currencies versus the software under the rest of our banking and financial transaction system? 

GuitarStv

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I laugh at how people debate what kind of wallet you need or which coin is most energy efficient but just gloss over the elephant in the room regarding this entire sector.  For context, I am a developer of complex software systems which secure the data of many of the world's largest companies.  I have been in this field for over 20 years.  Let me just make a blanket statement - software is shit.  I can leave it there, without qualification, and still be right 100% of the time with some minor rounding.  There is no other form of "engineering" in this world that is so sloppy.  You want to build a bridge or airplane, or develop a drug, or do pretty much anything other than software?  There are black and white practices, certifications, ISO standards, government agencies which act as watchdogs and on and on.  Sure, sometimes they miss the mark and things still fail.  But usually when a bridge or condo collapses we quickly hear about the failed inspection reports and we can see that the problem could at least be detected, even if people were too apathic to resolve it.  But for software?  Forget it.  Total wild west.  Littered with problems we don't even know about.  But hey, we've got auto-downloading updates!  If Ford put out a car and said "the wheels are probably going to fall off, but don't worry, we ship you new wheels every Friday for free" who would buy it?  They be sued and/or jailed, it's almost unthinkable.  But when my mother-in-law is in the hospital and they can't figure out which meds they have given her because their computers are currently down due to a ransomware attack (which exploited obvious and ridiculous flaws in their systems) who is on the hook?  The company being attacked gets to play the victim card.  None of the makers of any of the flawed software they were using are culpable.  We live in an insane world that keeps pushing more and more facets of our life towards software-based "solutions".  None of which work very well.  Do we really want to add national or global currency to that list?
Honest question: Do you differentiate between "software is shit" vulnerabilities for blockchain/digital currencies versus the software under the rest of our banking and financial transaction system?

I've worked on some of the code running under the banking and financial transaction systems.  It's shitty and super old (written in obsolete programming languages) . . . but has been so well tested over the decades that errors and bugs have mostly been worked out.  There's tremendous resistance to change in the industry for this reason.  Strangely similar to the software used to run nuclear control systems in plants actually.

Juan Ponce de León

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I laugh at how people debate what kind of wallet you need or which coin is most energy efficient but just gloss over the elephant in the room regarding this entire sector.  For context, I am a developer of complex software systems which secure the data of many of the world's largest companies.  I have been in this field for over 20 years.  Let me just make a blanket statement - software is shit.  I can leave it there, without qualification, and still be right 100% of the time with some minor rounding.  There is no other form of "engineering" in this world that is so sloppy.  You want to build a bridge or airplane, or develop a drug, or do pretty much anything other than software?  There are black and white practices, certifications, ISO standards, government agencies which act as watchdogs and on and on.  Sure, sometimes they miss the mark and things still fail.  But usually when a bridge or condo collapses we quickly hear about the failed inspection reports and we can see that the problem could at least be detected, even if people were too apathic to resolve it.  But for software?  Forget it.  Total wild west.  Littered with problems we don't even know about.  But hey, we've got auto-downloading updates!  If Ford put out a car and said "the wheels are probably going to fall off, but don't worry, we ship you new wheels every Friday for free" who would buy it?  They be sued and/or jailed, it's almost unthinkable.  But when my mother-in-law is in the hospital and they can't figure out which meds they have given her because their computers are currently down due to a ransomware attack (which exploited obvious and ridiculous flaws in their systems) who is on the hook?  The company being attacked gets to play the victim card.  None of the makers of any of the flawed software they were using are culpable.  We live in an insane world that keeps pushing more and more facets of our life towards software-based "solutions".  None of which work very well.  Do we really want to add national or global currency to that list?

Yet you can't even use paragraphs.

[MOD NOTE: unnecessary.  Forum Rule #1]
« Last Edit: July 04, 2021, 07:07:49 AM by FrugalToque »

BicycleB

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I laugh at how people debate what kind of wallet you need or which coin is most energy efficient but just gloss over the elephant in the room regarding this entire sector.  For context, I am a developer of complex software systems which secure the data of many of the world's largest companies.  I have been in this field for over 20 years.  Let me just make a blanket statement - software is shit.  I can leave it there, without qualification, and still be right 100% of the time with some minor rounding.  There is no other form of "engineering" in this world that is so sloppy.  You want to build a bridge or airplane, or develop a drug, or do pretty much anything other than software?  There are black and white practices, certifications, ISO standards, government agencies which act as watchdogs and on and on.  Sure, sometimes they miss the mark and things still fail.  But usually when a bridge or condo collapses we quickly hear about the failed inspection reports and we can see that the problem could at least be detected, even if people were too apathic to resolve it.  But for software?  Forget it.  Total wild west.  Littered with problems we don't even know about.  But hey, we've got auto-downloading updates!  If Ford put out a car and said "the wheels are probably going to fall off, but don't worry, we ship you new wheels every Friday for free" who would buy it?  They be sued and/or jailed, it's almost unthinkable.  But when my mother-in-law is in the hospital and they can't figure out which meds they have given her because their computers are currently down due to a ransomware attack (which exploited obvious and ridiculous flaws in their systems) who is on the hook?  The company being attacked gets to play the victim card.  None of the makers of any of the flawed software they were using are culpable.  We live in an insane world that keeps pushing more and more facets of our life towards software-based "solutions".  None of which work very well.  Do we really want to add national or global currency to that list?

Yet you can't even use paragraphs.

I don't think making an ad hominem attack on someone who asked a perfectly legitimate question is helpful (or within forum rules).
« Last Edit: July 01, 2021, 08:28:54 PM by BicycleB »

onecoolcat

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Yeah, that's the way to convince people.. insult them as luddites instead of treating them as people with legitimate concerns about the security of a financial instrument that has had literal billions of dollars worth of it stolen without recourse over the last few years.

If I had to have a "hardware wallet" to keep my vtsax safe, guess what - I wouldn't own vtsax. That's a dodge by someone that has no way to support their position.

I don't care to convince anyone about Bitcoin because its going to do what it has for the past decade regardless of what the resentful think. 

ysette9

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And that is fine. If it ends up being as great as you think it will then the late adopters will come on board eventually as it gains acceptance and bugs get worked out, just like any new technology. I didn’t have to be an early adopter of cell phones to reap the benefits of them when I finally decided to buy one, as an example. If crypto is going to be the game changer you think it will then I can enjoy its benefits when they come about.

But that is different from investing. I’ll continue to invest in boring things I understand because that is what my investment policy statement tells me to do.

onecoolcat

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There are no known bugs in Bitcoin; just a lot of misinformation and qualities that some people don't like (but are purposeful).

Moreover, crypto is not a zero-sum investment.  I personally only put in, at most, 5% of my investment money into it and the other 95% goes mostly into VTSAX.  I think it is dumb to go all into crypto but I think it is almost as dumb to write it off completely.

effigy98

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What bugs? Bitcoin is probably the most robust software ever made. It runs a service 24/7 for over a decade, has had multiple attacks including the latest massive hardware removal with NO downtime. I have never seen anything like it in my long software career working on some of the biggest networks in the world.

effigy98

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I laugh at how people debate what kind of wallet you need or which coin is most energy efficient but just gloss over the elephant in the room regarding this entire sector.  For context, I am a developer of complex software systems which secure the data of many of the world's largest companies.  I have been in this field for over 20 years.  Let me just make a blanket statement - software is shit.  I can leave it there, without qualification, and still be right 100% of the time with some minor rounding.  There is no other form of "engineering" in this world that is so sloppy.  You want to build a bridge or airplane, or develop a drug, or do pretty much anything other than software?  There are black and white practices, certifications, ISO standards, government agencies which act as watchdogs and on and on.  Sure, sometimes they miss the mark and things still fail.  But usually when a bridge or condo collapses we quickly hear about the failed inspection reports and we can see that the problem could at least be detected, even if people were too apathic to resolve it.  But for software?  Forget it.  Total wild west.  Littered with problems we don't even know about.  But hey, we've got auto-downloading updates!  If Ford put out a car and said "the wheels are probably going to fall off, but don't worry, we ship you new wheels every Friday for free" who would buy it?  They be sued and/or jailed, it's almost unthinkable.  But when my mother-in-law is in the hospital and they can't figure out which meds they have given her because their computers are currently down due to a ransomware attack (which exploited obvious and ridiculous flaws in their systems) who is on the hook?  The company being attacked gets to play the victim card.  None of the makers of any of the flawed software they were using are culpable.  We live in an insane world that keeps pushing more and more facets of our life towards software-based "solutions".  None of which work very well.  Do we really want to add national or global currency to that list?
Honest question: Do you differentiate between "software is shit" vulnerabilities for blockchain/digital currencies versus the software under the rest of our banking and financial transaction system?

I've worked on some of the code running under the banking and financial transaction systems.  It's shitty and super old (written in obsolete programming languages) . . . but has been so well tested over the decades that errors and bugs have mostly been worked out.  There's tremendous resistance to change in the industry for this reason.  Strangely similar to the software used to run nuclear control systems in plants actually.

How about ATM machines running Windows XP after end of life (with many security vulnerabilities) because banks refused to upgrade even when they went out of service. I don't think this was for robustness.

DaKini

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Moreover, crypto is not a zero-sum investment.  I personally only put in, at most, 5% of my investment money into it and the other 95% goes mostly into VTSAX.  I think it is dumb to go all into crypto but I think it is almost as dumb to write it off completely.
Hi, I would like to know where value comes from, specifically, for sources not beeing the next buyer hoping it will be worth more.

Mining surely couldn’t be it: in a world where the price would be stable, there should be negative price pressure because the new btc created would dilute the already present stack?

GuitarStv

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I laugh at how people debate what kind of wallet you need or which coin is most energy efficient but just gloss over the elephant in the room regarding this entire sector.  For context, I am a developer of complex software systems which secure the data of many of the world's largest companies.  I have been in this field for over 20 years.  Let me just make a blanket statement - software is shit.  I can leave it there, without qualification, and still be right 100% of the time with some minor rounding.  There is no other form of "engineering" in this world that is so sloppy.  You want to build a bridge or airplane, or develop a drug, or do pretty much anything other than software?  There are black and white practices, certifications, ISO standards, government agencies which act as watchdogs and on and on.  Sure, sometimes they miss the mark and things still fail.  But usually when a bridge or condo collapses we quickly hear about the failed inspection reports and we can see that the problem could at least be detected, even if people were too apathic to resolve it.  But for software?  Forget it.  Total wild west.  Littered with problems we don't even know about.  But hey, we've got auto-downloading updates!  If Ford put out a car and said "the wheels are probably going to fall off, but don't worry, we ship you new wheels every Friday for free" who would buy it?  They be sued and/or jailed, it's almost unthinkable.  But when my mother-in-law is in the hospital and they can't figure out which meds they have given her because their computers are currently down due to a ransomware attack (which exploited obvious and ridiculous flaws in their systems) who is on the hook?  The company being attacked gets to play the victim card.  None of the makers of any of the flawed software they were using are culpable.  We live in an insane world that keeps pushing more and more facets of our life towards software-based "solutions".  None of which work very well.  Do we really want to add national or global currency to that list?
Honest question: Do you differentiate between "software is shit" vulnerabilities for blockchain/digital currencies versus the software under the rest of our banking and financial transaction system?

I've worked on some of the code running under the banking and financial transaction systems.  It's shitty and super old (written in obsolete programming languages) . . . but has been so well tested over the decades that errors and bugs have mostly been worked out.  There's tremendous resistance to change in the industry for this reason.  Strangely similar to the software used to run nuclear control systems in plants actually.

How about ATM machines running Windows XP after end of life (with many security vulnerabilities) because banks refused to upgrade even when they went out of service. I don't think this was for robustness.

No experience with front end, just the back end server stuff.

chesebert

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Be a miner (a bit late now if you are just starting). You win when the market goes up and down and sideways.

Juan Ponce de León

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Moreover, crypto is not a zero-sum investment.  I personally only put in, at most, 5% of my investment money into it and the other 95% goes mostly into VTSAX.  I think it is dumb to go all into crypto but I think it is almost as dumb to write it off completely.
Hi, I would like to know where value comes from, specifically, for sources not beeing the next buyer hoping it will be worth more.

Mining surely couldn’t be it: in a world where the price would be stable, there should be negative price pressure because the new btc created would dilute the already present stack?

It's a bit late now to question whether bitcoin has value.  Obviously it has value, it's been trading on exchanges for over 10 years and this year has traded up to $64000.  Something is only worth what others are prepared to pay.  So now that we've established that it clearly has value, the only question is, how much value and how much value is it likely to have in the future?  Now when are pricing something that has value and has a limited supply (21 million) and we are pricing it in a fiat currency that is being printed at an ever increasing rate and which is clearly losing value the last few years compared to stocks, real estate and cryptocurrencies I believe it's not an extreme opinion to say that Bitcoin has a very good chance of continuing to increase in value vs US dollars and other fiat.  That's my opinion, you make your own, but at least try to base it on reality.

Radagast

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It's a bit late now to question whether bitcoin has value.  Obviously it has value, it's been trading on exchanges for over 10 years and this year has traded up to $64000.  Something is only worth what others are prepared to pay.  So now that we've established that it clearly has value, the only question is, how much value and how much value is it likely to have in the future?  Now when are pricing something that has value and has a limited supply (21 million) and we are pricing it in a fiat currency that is being printed at an ever increasing rate and which is clearly losing value the last few years compared to stocks, real estate and cryptocurrencies I believe it's not an extreme opinion to say that Bitcoin has a very good chance of continuing to increase in value vs US dollars and other fiat.  That's my opinion, you make your own, but at least try to base it on reality.
This is not what I would call value though. It is a type of value, but the weaker one. There are two types of value: intrinsic, and speculative. I have an old 500ml titanium cup, height equal to diameter, light weight, perfect size to heat on a cat can stove. At first I used it for backpacking, then I used it for tea. For a while I'd fill it with 500ml frozen blueberries and eat them with chopsticks, then fill it with 500ml blueberry flavored milk. I use it a lot for 500ml water which is the perfect serving size. As I write my toothbrush is on it. What would someone give me for it? I don't know but it would be certainly less than its intrinsic value, so I wouldn't sell.

Similar with my house: it has a value in giving us a place to shelter, eat, and hang out. Even without electricity I could keep its temperature 10 degrees cooler than summer highs and 20 degrees warmer than winter lows. Or a car. Or a dividend paying stock. These all have value regardless of what someone will pay for them.

I notice internet bitcoin and gold proponents often fixate on the price someone will give for something, to the exclusion of intrinsic value (btw gold actually does have some level of intrinsic value, but crypto does not). Which isn't to say that that a crypto currency cannot have value, only that it is the fickle form of value, useful only to the extent you can trade it for something useful.

Rosy

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Moreover, crypto is not a zero-sum investment.  I personally only put in, at most, 5% of my investment money into it and the other 95% goes mostly into VTSAX.  I think it is dumb to go all into crypto but I think it is almost as dumb to write it off completely.
Hi, I would like to know where value comes from, specifically, for sources not beeing the next buyer hoping it will be worth more.

Mining surely couldn’t be it: in a world where the price would be stable, there should be negative price pressure because the new btc created would dilute the already present stack?

1. Not at all, BTC is limited to a supply of 21 Million. That is how it is designed and it cannot be reversed.
$18 Million of it is already mined, a good portion of it lost or missing. Over the years mining became harder because the puzzle that has to be solved is designed to become more difficult. Now 12 years in, it takes longer to mine less bitcoin.
It is ingenious really.

When the number of miners drops - like it just did because of miners leaving China - BTC re-sets it's code and for the next two weeks mining will be easier and more profitable for miners. The code re-sets every two weeks based on activity.

Billionaires and institutions are hoarding it - so my money is on appreciating value.

2. Crypto is global. Sold OTC to private and corporate investors, billionaires, to prevent the market from de-stabilizing:)
Naw, to get better prices and keep the public from knowing how much and who is really stacking up the satoshis, so they can lie and talk trash about crypto in public while filling their vault with it.

Plebs like me can currently still buy crypto on the open exchanges around the world. Well, not quite.
Americans can only buy crypto at US approved exchanges.
Contrary to popular opinion there is a damn regulation about crypto every time you look.

3. You know who has assigned value - Goldman Sachs, Morgan Stanley, JP Morgan, NCR, State Bank, Visa, Mastercard, Paypal, Private funds and trusts, the Crypto Mafia aka Grayscale, hedgefunds, BNY Mellon, Robinhood.....The list is long and keeps getting longer every day. 

Chillingly, the infamous billionaire George Soros, that ice-cold, conniving old man has officially entered the crypto universe with his fund.
Soros in crypto space makes me afraid, very afraid.

As one of the banks spelled out in their official announcement:
"we can't afford to ignore a financial sector generating $2 Trillion" - note that's Trillions, not Billions.

It boils down to one thing Follow the Money.
There is a major shift taking place right in front of our eyes.

Rosy

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I am starting to dabble in crypto-banking recently. Something that is really catching my eye is Terra Luna. There are so many things attractive about it for diversity on both the conservatively low-risk side and higher risk side.

@jojoguy
No dabbling allowed - we are on MMM and MMMrs always have a strategy for the win:).

@Eco_eco - is Terra Luna on your radar? What do you think of the risks involved? You mentioned you were interested in altcoins, what are your criteria?   

PRO
Terra Luna happens to be on my list of altcoins I want to ultimately speculate in. I was unable to dig up anything negative about them, a rarity indeed.
They have a great team, can boast a three year uber-active competent leadership, solid investor backing like Coinbase and Galaxy, an interesting staking pool and a unique algorithm for their stable coin.
Three times now I've heard that ten X is a possibility - of course I take that with a pinch of salt, but it prompted me to take another look. 

What I like best about them is that they have an incredibly successful payment systems already in place in the real world. It is saying something that they carved out a niche in the highly competitive Asian market competing with Samsung Pay and Apple Pay. Their staking system looks good and better yet everyone who deep dives into their eco system is happy with them.
 
https://academy.shrimpy.io/post/what-is-terra-luna-terra-defi-blockchain-explained
How the Terra token balancing mechanism works -  https://www.youtube.com/watch?v=KqpGMoYZMhY&t=157s
Discussion on reddit - https://www.reddit.com/r/CryptoCurrency/comments/mnnxs4/lets_talk_about_terra_luna/

 The tech, bridges and interoperability between networks is close to seamless and all-encompassing.
Oracle, Cosmos, ETH, Anchor and Mirror - it is all there.
Their Market Cap is in the Billions and they have none of the tell-tale signs of a rug-pull scenario. 

CON
Since they are not US-centric they are hardly ever discussed which means I would need to find a reliable media outlet that reports about Asia.
They are based in South Korea and they are tightening the screws on crypto - I'm not keen on losing my money.

One of the few youtubers I trust mentioned that algorythm based stable coins can be problematic and indeed I saw they had a hiccup with that which they promptly fixed - but until I understand their system better and know for sure I am not getting stuck holding a coin I don't want to in the process of navigating their system I will not buy in.

Last but not least, coinbase is one of their investors yet this coin is not listed on coinbase. I want to know why - could be conflict of interest or some US regulation since coinbase is pretty much fully regulated.
It means I will use the Voyager exchange.

OVERALL
Like I said I am not ready to 'dabble' in altcoins yet but if Voyager has all the other altcoins on my list that Gemini does not offer that will be the route I take. I'm steering clear of Binance.US and KuCoin until all the rumble with regulation is over.
The goal is to keep it clean and simple, except for the one and only Small Cap on my list which might be difficult to get - it will be my secret bet:).
STRATEGY
My strategy is BTC, ETH coins first along with Crypto-related Stocks and Crypto Index funds.
With any luck I might be done with Phase One of my Plan by the end of July.

Starting in August everything will be DCA except for X-amt to start on my list of altcoins.
I am tempted to move a little sooner on my top three altcoins because they are doing so well. Damn FOMO:).
We'll see, maybe just one of them - my fun money is not that abundant.

So what risks or benefits did you uncover? Any juicy news or exciting new projects?

BattlaP

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Chillingly, the infamous billionaire George Soros, that ice-cold, conniving old man has officially entered the crypto universe with his fund.
Soros in crypto space makes me afraid, very afraid.

Top, top content guys. Really great stuff.

Rosy

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Chillingly, the infamous billionaire George Soros, that ice-cold, conniving old man has officially entered the crypto universe with his fund.
Soros in crypto space makes me afraid, very afraid.

Top, top content guys. Really great stuff.

@BattlaP
To clarify, this was meant as ...Tongue in Cheek...
because I hope to God he will not pull another currency-crushing stunt like when he broke the Bank of England.

How Soros broke the British Pound https://theeconreview.com/2018/10/16/how-soros-broke-the-british-pound/
Quote
On September 16th 1992, George Soros made one of the most audacious trades in recent times when he bet an enormous sum of money against the British sterling. In the process, he pocketed over a billion dollars and brought the Bank of England to its knees. Making a billion dollars is by all means no small feat, but to destroy the monetary system of Great Britain in one single day is something else altogether.

I still remember that day quite well I was living back in Europe at the time. The equivalent of 911 in the currency market. 

https://www.investopedia.com/ask/answers/08/george-soros-bank-of-england.asp
Quote
For his part in "enforcing" market dynamics, Soros pocketed $1 billion on the deal and cemented his reputation as the premier currency speculator in the world.

I'd say this is worth raising an eyebrow - you don't have to be a financial wizard to at least take notice and question, right?

Ultimately Soros is no different from JP Morgan or Goldman Sachs - they are all there for a reason.
I would simply like to know more about what is really happening here because I feel like I'm missing a piece of the puzzle.
The big picture is there but I haven't connected all the dots yet.

https://www.coindesk.com/podcasts/the-breakdown-with-nlw/george-soros-steve-cohen-bitcoin
One of the talking points
Quote
Troublesome possibility of regulation forming around institutional trading habits

Maybe all it means is that the banking community has agreed on how to move forward, which narrative and regulations to push.
They obviously have a plan involving regulations favoring them.

Soros is a legendary, ruthless financier who will not hesitate to execute the rug-pull of the century, he has already proven that.
It took balls and nerves of steel to bring down the Bank of England.
So I think I am justified in asking what chaos he might bring to crypto - makes a small retail investor feel like a mouse trapped in the paws of a cat.
« Last Edit: July 05, 2021, 08:17:43 AM by Rosy »

DaKini

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I did not ask if btc has value, but where did it come from?
My question was not answered.
What is the baseline source of its value?

Eco_eco

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I did not ask if btc has value, but where did it come from?
My question was not answered.
What is the baseline source of its value?
Here’s a good article on where Bitcoin’s value comes from:

https://aithority.com/guest-authors/bitcoin-has-no-intrinsic-value-then-what-gives-bitcoin-value/


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Eco_eco

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@Eco_eco - is Terra Luna on your radar? What do you think of the risks involved? You mentioned you were interested in altcoins, what are your criteria?   

Thanks @Rosy - is really great to have a chance to talk about strategy, rather than just a back and forth on crypto as a whole. I’ve very much appreciated your lifting the tone in each post on this thread.

I think Terra and their sub products (Mirror and Anchor) have real potential. There are a couple of good podcast interviews with their founders that give insight into their goals and how they have set up their business. They are on my list for investment, once I’ve built out my position in a few other protocols. I’m also waiting to see how well they do over the next six months as Korea goes through one of is periodic crypto contractions.

Their exposure to Korea is a good thing. They are well positioned for growth throughout all of south east Asia and like you said their coin is used by millions of people for everyday payments. But the value of LUNA is really hard to pick because Korea is its own crypto market which has a lot of swings. I don’t care that much about the price though I’m a long term holder by nature. I’m here for the network rewards and income, not capital growth. I don’t try to time the market much or pick the next big winner.

Here’s my take on network coins including Luna - this describes how I’ve chosen to invest in this part of the market and my picks for this crypto cycle:

Premise
Over the next few years the network layer segment will mature. It’s not yet clear if this will end up with one or two big players with most of the global network activity, or if the market will be more even with many smaller to mid size networks.

For 2021 I’ve developed a ranking system to guide our investment choice:

A grade - ETH: the global computer:
Over 2019, 2020 and 2021 Ethereum has proven how much of the value of transactions in the Cryptoverse can end up in underlying network layer (unlike say the Internet when most of the value sits at the application layer). This makes investments in the network worthwhile. ETH has significant first mover advantage and its ecosystem is very mature. This locks in value as apps like Uniswap wouldn’t really function if there weren’t so much demand to swap the many many tokens which all sit on Ethereum’s network.

However, we are rapidly approaching interoperability where the choice of network doesn’t matter and tokens can be traded on whichever network offers the lowest fees. Likewise layer two solutions will soon be easy and reliable enough to avoid using the Ethereum network for the large majority of transactions.

When this happens it will be interesting to see what happens to ETH. There is a talk of ETH transitioning to become a store of value similar to bitcoin, once there is little reason to use ETH and pay its network fees.

Because of this I hold short term bullish and long term bearish views of ETH and don’t think its wise to hold only ETH as your network play.

B grade:
BInance chain (BNB), Cardano (ADA), Polkadot (DOT)

I think these three make up a strong second tier. All three are very likely to take a big portion of the overall crypto network transactions in 2021 and 2022. Each one has a slightly different strategic position. I’m basically as bullish on these three as I am on Ethereum.

BNB - Binance has proven to be a very strong player with a commitment to building out its network over many years. It has the size, income and market presence necessary to build an ecosystem. Its also basically bought network activity over the past 24 months by heavily incentivising projects to use the Binance chain. This is just proving itself now as the Binance chain based DEFI sector starts to scale.

ADA - Cardano operates as a corporate entity which is looking to beat the incumbent at its own game. ADA is going after Ethereum in a very blatant way - by the end of this year smart contracts on ADA will be interoperable and easy to code without having to learn solidity. Cardano is also very active in making itself attractive to business and government platforms - it is leveraging its ‘academic’ first approach to sell ADA as reliable and well founded. The academic rigour applied to the network makes it very attractive to people who are rewarded by choosing stability over innovation (such as people setting up projects for nationstate).

DOT - Polkadot is moving fast, and in doing so is capturing developer excitement and energy. There will be a lot of cudos and market opportunity for projects that capture one of the first 100 slots in the parachain (as we’ve seen with Kusama).

C grade:
Avalanche (AVAX), STELLAR (XLM), Terra (LUNA) and Ripple (XRP)

I rate AVAX, XLM, LUNA and XRP as projects which could succeed and end up as major players, but which have not yet hit critical points of maturity to safely indicate they will thrive in the coming few years.

AVAX - is a great project with a fantastic founder, but I haven’t found the unique value proposition for the network which would make it more than just another great project.

XLM - is very likely to succeed if its enterprise model pays off, but (like with Ripple) I don’t know how much of the transaction value will end up with XLM holders.

XRP - the same as Stellar, but with legal and governance issues which might slow its innovation growth significantly.

LUNA - is a bit of an outsider but has captured a lot of the network share in its home market of Korea, and is now adding DeFi and synthetics to its ecosystem. It’s not well placed to incentivise teams to use its network and I haven’t found it capturing developer ‘mindshare’ and I think this will hold it back. But it is underpinned by a very strong payments network and usage of its payments app. It might turn out to gain value in the retail space, rather than as a network layer project.

You could also put SOL in this category - SOL is new but evolving fast and has a lot of support from the FTX exchange.

D grade:
EOS, WAVES, TEZOS, IOTA, NEO

Each of these are lagging behind the other projects in this list. Both EOS and Tezos raised huge amounts in the ICOs and have sufficient funding to last for years, but both do not seem to have used this in any meaningful way yet. WAVES looks to be largely dead in the water, with only the occasional spark of life every now and then. NEO continues to lag. IOTA has a hard journey ahead for adoption as its chosen a different technology to solve the challenges which blockchains address.

While each of these five might surprise and could be bubbling away with secret developments that haven’t been announced, they seem to be falling behind in the part of the Cryptoverse which has made huge progress over the past few years and which it is very likely we will see a few dominant players capture most of the market.

None of this is financial advice - it’s just my take on this part of the ever growing crypto marketplace.


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GuitarStv

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I did not ask if btc has value, but where did it come from?
My question was not answered.
What is the baseline source of its value?
Here’s a good article on where Bitcoin’s value comes from:

https://aithority.com/guest-authors/bitcoin-has-no-intrinsic-value-then-what-gives-bitcoin-value/


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According to that article, the only value that Bitcoin offers is the trust that people have in it as a useful currency?

Eco_eco

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I did not ask if btc has value, but where did it come from?
My question was not answered.
What is the baseline source of its value?
Here’s a good article on where Bitcoin’s value comes from:

https://aithority.com/guest-authors/bitcoin-has-no-intrinsic-value-then-what-gives-bitcoin-value/


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According to that article, the only value that Bitcoin offers is the trust that people have in it as a useful currency?

Yes, that's about right. As others have said in this thread there is an ever increasing degree of confidence in Bitcoin as a currency, but its not like a national fiat currency which is backed by the economic output of the nation involved. Bitcoin is an exercise is applied economics and game theory.

Crypto as an asset class is well beyond Bitcoin alone. I'm increasingly focusing on the use of other blockchain technologies. When I first got interested in Bitcoin it was the only crypto I owned. These days I find it is only a piece of the portfolio and the challenge is guessing how much wighting Bitcoin should hold in a robust, longer term investment strategy.

Telecaster

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I did not ask if btc has value, but where did it come from?
My question was not answered.
What is the baseline source of its value?
Here’s a good article on where Bitcoin’s value comes from:

https://aithority.com/guest-authors/bitcoin-has-no-intrinsic-value-then-what-gives-bitcoin-value/


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From the article:

Quote
Adding to this, Today a cryptocurrency gets its utility as a mode of payment due to two key factors – Transaction Costs and Transaction Time. Cost to transfer a cryptocurrency like Bitcoin is near minimal as the number of parties involved is technically only two. It’s more like a cash transaction done digitally. This reduces the overall cost of transactions significantly. With the added security layer provided by Blockchain, this is perhaps the safest way to transfer value digitally.

Transaction Time or time to realize the payment in the seller’s account is in the tune of a few minutes at max with crypto-currencies. Compare this with days with traditional fiat currencies. A global e-commerce major like Amazon, which has millions of transactions in a day globally cannot afford such high costs as well as cash-flow challenges. Hence, today globally, many companies have started collecting payments using Bitcoin or similar cryptocurrencies.

These claims are objectively false.  Bitcoin transaction times and costs in almost all cases are higher than traditional payment systems. 

Amazon doesn't accept Bitcoin and none of the largest retailers do either.  Actually, virtually no retailers do. The reasons are painfully simple:  Bitcoin is too slow, too expensive, and too volatile.  Bitcoin's intrinsic value is this:  Some people like the idea of owning Bitcoin.  Nothing wrong with that!  But that's all there is. 

Eco_eco

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I did not ask if btc has value, but where did it come from?
My question was not answered.
What is the baseline source of its value?
Here’s a good article on where Bitcoin’s value comes from:

https://aithority.com/guest-authors/bitcoin-has-no-intrinsic-value-then-what-gives-bitcoin-value/


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From the article:

Quote
Adding to this, Today a cryptocurrency gets its utility as a mode of payment due to two key factors – Transaction Costs and Transaction Time. Cost to transfer a cryptocurrency like Bitcoin is near minimal as the number of parties involved is technically only two. It’s more like a cash transaction done digitally. This reduces the overall cost of transactions significantly. With the added security layer provided by Blockchain, this is perhaps the safest way to transfer value digitally.

Transaction Time or time to realize the payment in the seller’s account is in the tune of a few minutes at max with crypto-currencies. Compare this with days with traditional fiat currencies. A global e-commerce major like Amazon, which has millions of transactions in a day globally cannot afford such high costs as well as cash-flow challenges. Hence, today globally, many companies have started collecting payments using Bitcoin or similar cryptocurrencies.

These claims are objectively false.  Bitcoin transaction times and costs in almost all cases are higher than traditional payment systems. 

Amazon doesn't accept Bitcoin and none of the largest retailers do either.  Actually, virtually no retailers do. The reasons are painfully simple:  Bitcoin is too slow, too expensive, and too volatile.  Bitcoin's intrinsic value is this:  Some people like the idea of owning Bitcoin.  Nothing wrong with that!  But that's all there is.

Bitcoin's transaction time and costs are much faster than traditional transactions in some circumstances. For example - you can send any amount of Bitcoin internationally in 10 minutes to an hour (depending on how many confirmations you want) and for a few dollars, where as a wire transfer to do the same might take several days and cost much much more.

Bitcoin is not faster or better for small transactions. But I don't think it's a false claim that Bitcoin is a more efficient payment mechanism in many circumstances. Its also true that payment providers are increasing enabling payment by Bitcoin as adoption grows - PayPal is a good example of this:
https://www.paypal.com/us/smarthelp/article/cryptocurrency-on-paypal-faq-faq4398

The real innovation around payments is just getting started. It's now possible to stream bitcoin to a podcast provider for only the time that you listen to an episode of a podcast. The tech is clumsy and hard to configure, but it will get better quickly I imagine. Its easy to see that streaming services like Netflix or Xbox Cloud Gaming might one day move to a model where you pay for only the content that you consume - using bitcoin or some other cryptocurrency.

Telecaster

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Bitcoin's transaction time and costs are much faster than traditional transactions in some circumstances. For example - you can send any amount of Bitcoin internationally in 10 minutes to an hour (depending on how many confirmations you want) and for a few dollars, where as a wire transfer to do the same might take several days and cost much much more.

Yes, in some circumstances like the ones you mentioned Bitcoin transactions are superior.  However, the article you linked to specifically mentioned Amazon.  This is a false linkage.   Amazon does not accept Bitcoin because of the enormous risks, slow transaction time, and high fees associated with such transactions. 

And not just Amazon.  No major retailer, and almost no other retailers, accept Bitcoin.   From a retail perspective accepting Bitcoin makes almost no sense at all.   Again, this was the article you linked to.  I find it completely implausible that a tech company like Amazon would forget to look at Bitcoin as a payment system.  Maybe, just maybe, the claimed benefits in the article don't actually exist. 

Quote
Bitcoin is not faster or better for small transactions. But I don't think it's a false claim that Bitcoin is a more efficient payment mechanism in many circumstances. Its also true that payment providers are increasing enabling payment by Bitcoin as adoption grows - PayPal is a good example of this:
https://www.paypal.com/us/smarthelp/article/cryptocurrency-on-paypal-faq-faq4398

From Paypal's fine print:

All trades must be executed in USD.

USD is the medium of exchange, not Bitcoin.  Bitcoin is the payment system.  In what way is Bitcoin a superior payment system to what exists already?  Serious question.  I've asked this same question a number of times, and Bitcoin proponents always vanish when I ask it for some reason. 

Quote
The real innovation around payments is just getting started. It's now possible to stream bitcoin to a podcast provider for only the time that you listen to an episode of a podcast. The tech is clumsy and hard to configure, but it will get better quickly I imagine. Its easy to see that streaming services like Netflix or Xbox Cloud Gaming might one day move to a model where you pay for only the content that you consume - using bitcoin or some other cryptocurrency.

What problem does Bitcoin solve here?  Why do you need a cryptocurrency for this?  If you consume 75% of a movie, why does Netflix require Bitcoin to charge your credit card 75% of the rental price?  You don't need blockchain for that.

As an aside, most streaming/software services have gone to a subscription model where you don't pay for the content you consume.  You get unlimited of whatever it is they are selling.  I don't see that being reversed any time soon.  The system you describe might be an advantage for the consumer, but again you don't need blockchain for that. 

Rosy

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I did not ask if btc has value, but where did it come from?
My question was not answered.
What is the baseline source of its value?

1. Your question makes no sense to me because surely you know that BTC is nothing but a code - so why do you ask?

2. I have always accepted crypto for what it really is - part ideology and part code.
Both have changed over time and will continue to do so.

3. For me the baseline source of crypto's value lies in whatever value we ascribe to the ideology, the code and the implications that arise from it.
I embrace the ideology of freedom and brilliant technical innovation underlying this code.

I am well aware that Crypto threatens the governments and by extension, the banks' control of money and therefore power.
Therefore it cannot be allowed to exist, except as sanctioned by them.

@DaKini - Your question does a beautiful job of showing the difference in perspective between Crypto enthusiasts and
 those who remain stuck on this question.

@ysette9 - I know you too are stuck on the same question so I answered this as short and sweet as possible with you in mind as well.

Off to discuss Crypto Investment Strategy...       

Eco_eco

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Our Crypto Investment strategy (slow and steady investing for the win)
« Reply #87 on: July 06, 2021, 02:15:47 PM »

Yes, in some circumstances like the ones you mentioned Bitcoin transactions are superior.  However, the article you linked to specifically mentioned Amazon.  This is a false linkage.   Amazon does not accept Bitcoin because of the enormous risks, slow transaction time, and high fees associated with such transactions. 


I didn’t read this part of the article the same way you did. I think the author was using Amazon as an example of a major e-commerce site which processes millions of payments, not an example of a company which is accepting payment of Bitcoin today. It is conceivable that Amazon will accept Bitcoin in the future if it sees a market advantage in doing so. Who knows - Amazon might be a leader and announce it next year, or it might be laggard and start accepting Bitcoin in 10 years time.

Quote

And not just Amazon.  No major retailer, and almost no other retailers, accept Bitcoin.   From a retail perspective accepting Bitcoin makes almost no sense at all.   Again, this was the article you linked to.  I find it completely implausible that a tech company like Amazon would forget to look at Bitcoin as a payment system.  Maybe, just maybe, the claimed benefits in the article don't actually exist. 


Bitcoin maximalists will say this is an adoption thing, over time you there are more and more opportunities to use Bitcoin to pay for things. Ten years ago when Bitcoin was first released, all you could really use it for was to buy more Bitcoin. Nowadays you can rent servers, buy gift cards, buy the occasional house, pay for things on PayPal, and (when Elon feels like it) buy a car using Bitcoin. Even Visa is exploring crypto in a meaningful way as part of its payments infrastructure.

Quote

From Paypal's fine print:

All trades must be executed in USD.

USD is the medium of exchange, not Bitcoin.  Bitcoin is the payment system.  In what way is Bitcoin a superior payment system to what exists already?  Serious question.  I've asked this same question a number of times, and Bitcoin proponents always vanish when I ask it for some reason. 


I don’t think anyone realistically expects PayPal, or any other company, to re-denominate from national currencies to Bitcoin (or any other crypto). That would be a fundamental shift in economic structures. For a long time, people have said Bitcoin has no value because you can’t pay for things with it. That is changing as adoption grows. Clearly Bitcoin doesn’t have to be the only mechanism of exchange to create and hold value, since it’s currently worth over $1 trillion. I guess it just needs utility and the ability to be exchanged to be of value.

Quote
What problem does Bitcoin solve here?  Why do you need a cryptocurrency for this?  If you consume 75% of a movie, why does Netflix require Bitcoin to charge your credit card 75% of the rental price?  You don't need blockchain for that.

You don’t need the blockchain (and arguably some layer 2 technologies like the Lightening Network is moving some distance from blockchain anyway), but Bitcoin created the innovative and disruptive environment which has people building this kind of solution. The question was how Bitcoin is being used and where the value is coming from - one of the forms of value is innovative forms of payment based around exchange of crypto currencies.

In terms of an investment approach - I don’t care about Bitcoin, or any other single crypto currency. What I see is a technology which is innovate, capturing market share, and disrupting incumbents and so I’m interesting in having a share of my stache in it, in a way which is prudent and manages risk. Bitcoin is currently +/- 50% of the market and so I have a balanced amount in my crypto portfolio - the challenge is right sizing this.


Edit: slight rephrasing
« Last Edit: July 06, 2021, 02:26:42 PM by Eco_eco »

johnhenry

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Newbie question for you smart people. How do you get yield out of crypto currencies? Any other currency like dollars or euros or RMB don’t produce anything un of themselves, you have to invest them in something to make any additional money. Why would crypto currencies be different? Where is the value creation as opposed to simply value storage?

You do exactly what the OP has done here.  You join forums, evangelize, and attempt to round up greater fools.

talltexan

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With the other currencies, you can buy gov't bonds in the home country (although yields are low).

effigy98

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Stay in the system you feel most comfortable with.

Legacy financial system: "You will own nothing and you'll be happy" - oligarchies

I personally have lost trust in the legacy financial system to protect my property rights and will continue to diversify accordingly.


Telecaster

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I didn’t read this part of the article the same way you did. I think the author was using Amazon as an example of a major e-commerce site which processes millions of payments, not an example of a company which is accepting payment of Bitcoin today. It is conceivable that Amazon will accept Bitcoin in the future if it sees a market advantage in doing so. Who knows - Amazon might be a leader and announce it next year, or it might be laggard and start accepting Bitcoin in 10 years time.


Agreed.  Let me clarify.   The author noted that traditional payment systems are typically much slower than Bitcoin.  In fact, I'll just requote the part after he talks about the effects of slow transaction times:

A global e-commerce major like Amazon, which has millions of transactions in a day globally cannot afford such high costs as well as cash-flow challenges. Hence, today globally, many companies have started collecting payments using Bitcoin or similar cryptocurrencies.

So if you do lots of transactions it is in your advantage to do it in Bitcoin, right?  But in reality, the vast majority of companies--Amazon among them--have not started collecting payments in Bitcoin despite author's claimed efficiencies.  Even most companies that supposedly accept Bitcoin actually don't.  The user pays in Bitcoin, but retailer gets paid in cold, hard Yankee Dollars. 

The reason Amazon, and virtually all retailers, don't accept Bitcoin is that Bitcoin doesn't provide a financial advantage over traditional payment systems.  The article's point was that Bitcoin has intrinsic value because it provides an advantage.  Yet we're not seeing that play out in the real world.  There's no way that I know of to be sure, but the number of retailers who accept native Bitcoin certainly has barely budged in the last five years.

So either the author is wrong.  Or all the companies who are doing millions of transactions a day are wrong and they are just too dumb to see the advantage.  I find the former more likely than the latter. 
« Last Edit: July 09, 2021, 09:30:29 AM by Telecaster »

DaKini

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I personally have lost trust in the legacy financial system to protect my property rights and will continue to diversify accordingly.
The property rights are protected by law and not by money.

effigy98

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Fed and treasury is doing a great job protecting my purchasing power with inflation tax and breaking laws by buying junk bonds and transferring my wealth for stimmies. Ya, tons of trust.
« Last Edit: July 11, 2021, 10:44:33 PM by effigy98 »

DaKini

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Well I understood that you are thinking Money=Property.
Is that correct?

Because if yes, you have a misconception about what money is.
Money is not property. Money is a medium of exchange, and it is an entitlement that you can exchange it. It is not "property" in the sense I meant it.
Property is something you possess directly in the form of hard assets, like a piece of land, a house, but also "paper property" like ownership in a company.

If you are like most germans here, treating money as the prime store of wealth, i understand your reasoning, and also why BTC may be appealing in solving this "problem". But in my opinion, it is a flawed view. The underlying problem is your asset allocation, tough.

Glenstache

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Well I understood that you are thinking Money=Property.
Is that correct?

Because if yes, you have a misconception about what money is.
Money is not property. Money is a medium of exchange, and it is an entitlement that you can exchange it. It is not "property" in the sense I meant it.
Property is something you possess directly in the form of hard assets, like a piece of land, a house, but also "paper property" like ownership in a company.

If you are like most germans here, treating money as the prime store of wealth, i understand your reasoning, and also why BTC may be appealing in solving this "problem". But in my opinion, it is a flawed view. The underlying problem is your asset allocation, tough.

This kind of gets at the nub of the last string of comments. The "value" of money is it's utility as a tool for exchange. The price of money/currency is a combination of its utility value and speculation on future value (which can go up or down). The value in a fiat currency is backed by the economy that underlies it and thus its use as a medium of exchange; there is a confidence from that routine use that you can exchange it for something and have a reasonable view of how much currency it will take to buy a particular widget. For something like bitcoin, there is utility in it as a medium of exchange, and offers some streamlining in transaction through blockchain technology. The future underlying value is largely dependent on the rate of adoption. IMO, much of the volatility is coming from speculation about future value, and that speculation is a combination of exuberance and people who see increased use as a likely bet. The OP's title of slow and steady I would infer as being in the latter camp. This future valuation also depends on a finite supply of the specific digital currency and adequate divisibility to go around to meet use demand. Rapid adoption would in some ways be bad for practical use of digital currency because the valuation/price would not be stable. Inflation at a few percent  a year is (or what would look like deflation as would be the case with rapid adoption) makes it hard to use as a long term financial instrument.

I am curious what those who are investing see as a strategy to hedge against a truly big player coming in and offering a large scale currency that would have greater price stability? This is fully acknowledging that there is a leap from 0 to scale that is tough to get over. Or is the plan to pick one now and hope it will be the adopted (or set of adopted) digital currencies? While the BTC code and infrastructure seems reasonable solid, it seems like it could also be ripe for disruption and obsolescence through better technology/implementation, or simply global adoption of something else.

index

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Well I understood that you are thinking Money=Property.
Is that correct?

Because if yes, you have a misconception about what money is.
Money is not property. Money is a medium of exchange, and it is an entitlement that you can exchange it. It is not "property" in the sense I meant it.
Property is something you possess directly in the form of hard assets, like a piece of land, a house, but also "paper property" like ownership in a company.

If you are like most germans here, treating money as the prime store of wealth, i understand your reasoning, and also why BTC may be appealing in solving this "problem". But in my opinion, it is a flawed view. The underlying problem is your asset allocation, tough.

This kind of gets at the nub of the last string of comments. The "value" of money is it's utility as a tool for exchange. The price of money/currency is a combination of its utility value and speculation on future value (which can go up or down). The value in a fiat currency is backed by the economy that underlies it and thus its use as a medium of exchange; there is a confidence from that routine use that you can exchange it for something and have a reasonable view of how much currency it will take to buy a particular widget. For something like bitcoin, there is utility in it as a medium of exchange, and offers some streamlining in transaction through blockchain technology. The future underlying value is largely dependent on the rate of adoption. IMO, much of the volatility is coming from speculation about future value, and that speculation is a combination of exuberance and people who see increased use as a likely bet. The OP's title of slow and steady I would infer as being in the latter camp. This future valuation also depends on a finite supply of the specific digital currency and adequate divisibility to go around to meet use demand. Rapid adoption would in some ways be bad for practical use of digital currency because the valuation/price would not be stable. Inflation at a few percent  a year is (or what would look like deflation as would be the case with rapid adoption) makes it hard to use as a long term financial instrument.

I am curious what those who are investing see as a strategy to hedge against a truly big player coming in and offering a large scale currency that would have greater price stability? This is fully acknowledging that there is a leap from 0 to scale that is tough to get over. Or is the plan to pick one now and hope it will be the adopted (or set of adopted) digital currencies? While the BTC code and infrastructure seems reasonable solid, it seems like it could also be ripe for disruption and obsolescence through better technology/implementation, or simply global adoption of something else.

This is the problem with BTC. Ultimately the medium of exchange (currency) is whatever those in power say it is. Gold has been the traditional store of wealth over time, but in times of stress (think civil war or WW2) gold can be confiscated by power. Big debt cycles have come to pass and fiat money has been reset many times (even in the US's short history). Holding BTC long term is a bet that those in power choose to give up their power to create and manage their own currency and is not a good bet in my opinion as it goes against human nature. If BTC starts to threaten the status quo in a real way, those with the power will simply outlaw it. The government of the world's largest economy just said BTC will not be allowed here and the US could do the same thing tomorrow.

roomtempmayo

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I think I more or less get the efficiency gains from putting financial transactions on the blockchain.  If the paper-pushing part of every large transaction is eliminated, that's a huge gain.

And if national governments don't come out with their own digital currencies and mandate their use for these transactions, I can see that there would be a period of increasing value for major digital currencies as people needed them to transact business.

But, I don't know if this was tongue in cheek or not, but basically this:


I am well aware that Crypto threatens the governments and by extension, the banks' control of money and therefore power.
Therefore it cannot be allowed to exist, except as sanctioned by them.
 

Once that major adaptation would take place, any ongoing value beyond efficiency gains directly threatens the state's ability to control the money supply and collect taxes.  No state is going to let that happen because it's an existential threat, and they have armies and police to prevent it.

I have a few good friends that are on the crypto wagon, and every conversation I have with them somehow comes around to the idea that crypto more or less outsmarts state regulation.  If that's not true (and I really don't think it is or will be) I don't see the currencies themselves having appreciating value as assets beyond any initial adaptation period, or producing revenue in any other ongoing way. 

Another way to put it is that I don't see what a regulated digital currency universe offers that a world with a digital USD operating on blockchain technology wouldn't.  Why wouldn't a digital USD pretty immediately become the only game in town, especially if Congress and the Fed decide it should be? 

What am I missing here?

Simpli-Fi

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Another way to put it is that I don't see what a regulated digital currency universe offers that a world with a digital USD operating on blockchain technology wouldn't.  Why wouldn't a digital USD pretty immediately become the only game in town, especially if Congress and the Fed decide it should be? 

What am I missing here?
This is what has my brain wrecked.  I mean USD is already so digital, as my dollars are just 1’s and 0’s displayed on a screen; but financial institutions will cut checks based on these 1’s and 0’s.  Wonder what the transaction cost delta is between accounting those transactions (pre-tax, post, Roth, etc) vs if those were on a blockchain??

Telecaster

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Another way to put it is that I don't see what a regulated digital currency universe offers that a world with a digital USD operating on blockchain technology wouldn't.  Why wouldn't a digital USD pretty immediately become the only game in town, especially if Congress and the Fed decide it should be? 

What am I missing here?
This is what has my brain wrecked.  I mean USD is already so digital, as my dollars are just 1’s and 0’s displayed on a screen; but financial institutions will cut checks based on these 1’s and 0’s.  Wonder what the transaction cost delta is between accounting those transactions (pre-tax, post, Roth, etc) vs if those were on a blockchain??

Here's the thinking as I understand it:  If there were a central bank digital currency (CBDC), users on the consumer level wouldn't necessarily need bank accounts.  You would still need a digital wallet of some type or an exchange, but that could be accomplished with a cell phone app (maybe government sponsored) and potentially consumers could be freed from retail banking and the associated fees.  That might be helpful because even in the US there is a substantial portion of non-banked persons.  Also, in theory, there is potential for cheaper transaction costs as especially for international transfers.   And it would making transaction tracking by the government easier, so money laundering and other criminal activity would be more difficult.  There is also potential for incorporating smart contracts and such. 

But any CBDC would have to be just as fast and cheap as what we have now.  I'm no expert, but I think that should be possible.  A simple Visa transaction has a surprising number of fingers in the pie and everybody gets a taste.   Reducing the complexity should reduce the costs as well.  But thus far no central bank is jumping into this with both feet, so there are clearly some details that need to be hashed out (no pun originally intended.  But since it is there, I'll take it).