Ether was briefly at 10 cents today during a flash crash.
Ether was briefly at 10 cents today during a flash crash.
That is false. Ether has not dipped under ~$320 on any exchanges today.
0.05303289 BTC. About $143 at present exchange rates. Currently generating about 0.0053 BTC/day.
I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.
Ether was briefly at 10 cents today during a flash crash.
That is false. Ether has not dipped under ~$320 on any exchanges today.
Bloomberg is reporting that it did: https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo (https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo)
NiceHash automatically mines whatever is most profitable given present market conditions and efficiency of your hardware with different hashing algorithms. It's been mostly having me mine ETH and Zcash. It pays out in BTC once a week.0.05303289 BTC. About $143 at present exchange rates. Currently generating about 0.0053 BTC/day.
I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.
Very cool! Have you considered mining other coins? Bitcoin miining is very competitive but there are other coins you may receive higher USD gains from (unless your plan is to hold the BTC after you get it, of course).
YESTERDAY - There was market manipulation on one exchange which caused a quick crash and recovery within seconds, technically yes it touched the price for a split second. The price quickly recovered.
It's unfortunate. I personally lost my trading stack ($15,000) but had friends lose much more (over $200,000 for one friend). It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.
But, ETH price is stable across all platforms. This was a Black Swan due to market manipulation. It's horrible but part of the game as this is an entirely new world of trading.
0.05303289 BTC. About $143 at present exchange rates. Currently generating about 0.0053 BTC/day.
I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.
Very cool! Have you considered mining other coins? Bitcoin miining is very competitive but there are other coins you may receive higher USD gains from (unless your plan is to hold the BTC after you get it, of course).Ether was briefly at 10 cents today during a flash crash.
That is false. Ether has not dipped under ~$320 on any exchanges today.
Bloomberg is reporting that it did: https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo (https://www.bloomberg.com/view/articles/2017-06-23/buffett-deals-and-blockchain-crashes?utm_source=yahoo&utm_medium=bd&utm_campaign=headline&cmpId=yhoo.headline&yptr=yahoo)
YESTERDAY - There was market manipulation on one exchange which caused a quick crash and recovery within seconds, technically yes it touched the price for a split second. The price quickly recovered.
It's unfortunate. I personally lost my trading stack ($15,000) but had friends lose much more (over $200,000 for one friend). It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.
But, ETH price is stable across all platforms. This was a Black Swan due to market manipulation. It's horrible but part of the game as this is an entirely new world of trading.
Huh? $15K (or $200K) of alleged value of cryptocurrency gone? Sorta makes one wonder...
Who is going to be sued and where and by whom and what sort of recovery would be sought?
Since these currencies are not a real thing and the account values are not backed by, or legal tender according to, any country's government, I suspect that if a suit were somehow brought against a responsible party the court would consider these cryptocurrency regimes to be essentially Ponzi schemes. Basically a system where new money is used to pay prior "investors" when the cash out. I mean, not everyone could sell at once and get the cash market value of their cryptocurrency in actual cash right? In such situations, recovery -- if any is granted at all -- is usually limited to the actual amount of cash that one brought in and not to the amount of any paper (imaginary) gains that may have been reported to the dupe in the interim.
With any sort of investment scheme its always important to remember that the cash is gone at the point when one buys -- the investment or asset can be sold for cash again but to the extent there is a market.
YESTERDAY - There was market manipulation on one exchange which caused a quick crash and recovery within seconds, technically yes it touched the price for a split second. The price quickly recovered.
It's unfortunate. I personally lost my trading stack ($15,000) but had friends lose much more (over $200,000 for one friend). It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.
But, ETH price is stable across all platforms. This was a Black Swan due to market manipulation. It's horrible but part of the game as this is an entirely new world of trading.
I'm so confused here. You lost $15k yesterday, but it's just unfortunate?
Yes sir, very unfortunate. Given that the lost ETH is currently $15k in value, it will most likely be worth around $100,000 in a year or two.
Oh well, live and learn!
0.05303289 BTC. About $143 at present exchange rates. Currently generating about 0.0053 BTC/day.
I'm mining using NiceHash across three GTX 1070s (one of them only part-time) I bought just before the recent surge in demand/out-of-stock-ness/price-gouging.
Geez... look I hold BTC and ETH and I have to tell you... all ETH guys do is pump, pump, pump.
All investments have risk, and all of the crypto space is immature from a technological standpoint. It does hold a tremendous amount of potential for solving many of the world's problems related to finance and property ownership. But investing in it is ONLY for people who have a strong stomach and a willingness to ride it out for a long period of time.
Yes sir, very unfortunate. Given that the lost ETH is currently $15k in value, it will most likely be worth around $100,000 in a year or two.
Oh well, live and learn!
I don't believe in crypto-currencies. I don't think they are real.
I'd rather invest in something more stable and reliable than cryptocurrency. Like beanie babies.
It's unfortunate and there will surely be lawsuits due to gross negligence of the exchange and a breach of their own Terms and Conditions and Terms of Service.
BTC doesn't have these questions.
The unfortunate: I started mining BTC back in 2012/2013 and also bought a few coins for fun when the value was under $20 USD but quickly gave up and sold because it seemed pointless and there was little immediate value to doing so. If I would have left my PC chugging along back then I would have thousands/hundreds of thousands $$ at this point.
Perhaps I should have been more specific. There is a big difference between mining cryptocurrency and purchasing cryptocurrency, at least as far as investing.
How would one even go about buying ethereum coins (on a mac)?
Is coinbase what everyone uses? Is there a chance someone can run off with customers funds on that platform?How would one even go about buying ethereum coins (on a mac)?
Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way. Make sure to move them off to your own wallet after.
Is coinbase what everyone uses? Is there a chance someone can run off with customers funds on that platform?How would one even go about buying ethereum coins (on a mac)?
Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way. Make sure to move them off to your own wallet after.
Sent from my iPhone using Tapatalk
Is coinbase what everyone uses? Is there a chance someone can run off with customers funds on that platform?How would one even go about buying ethereum coins (on a mac)?
Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way. Make sure to move them off to your own wallet after.
Is coinbase what everyone uses? Is there a chance someone can run off with customers funds on that platform?How would one even go about buying ethereum coins (on a mac)?
Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way. Make sure to move them off to your own wallet after.
Sent from my iPhone using Tapatalk
Note that my only other step was to move the coins to your own wallet. You should never keep coins at an exchange, because they can be, and are, hacked.
Is coinbase what everyone uses? Is there a chance someone can run off with customers funds on that platform?How would one even go about buying ethereum coins (on a mac)?
Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way. Make sure to move them off to your own wallet after.
Sent from my iPhone using Tapatalk
Note that my only other step was to move the coins to your own wallet. You should never keep coins at an exchange, because they can be, and are, hacked.
I'll have to figure that part out. Any opinions on the Gemini exchange? Seems more regulated and doesn't appear to support lite coin.
Sent from my iPhone using Tapatalk
Is coinbase what everyone uses? Is there a chance someone can run off with customers funds on that platform?How would one even go about buying ethereum coins (on a mac)?
Step 1 is google "how to buy etherium".
Probably setting up an account at coinbase is the easiest way. Make sure to move them off to your own wallet after.
Sent from my iPhone using Tapatalk
Note that my only other step was to move the coins to your own wallet. You should never keep coins at an exchange, because they can be, and are, hacked.
Tonyahu, sorry about your 15k. If you don't mind my asking, does that leave you in a net gain or net loss position for your cumulative investments in crypto-currency?
I don't have any, so just curious. Best of luck!
Geez... look I hold BTC and ETH and I have to tell you... all ETH guys do is pump, pump, pump.
All investments have risk, and all of the crypto space is immature from a technological standpoint. It does hold a tremendous amount of potential for solving many of the world's problems related to finance and property ownership. But investing in it is ONLY for people who have a strong stomach and a willingness to ride it out for a long period of time.
Good thing I didn't buy in yet, I'd hate to have been wiped out right after I started. This is obviously an investment opportunity where one has to anticipate losing all and being called a fool - that's OK, I don't plan to put my life savings into it.
I am interested in Ethereum, mainly because from what I've read so far it has a lot more potential than bitcoin, which seems to be a one trick pony. Not that I really know what I am talking about - but I am setting aside a little fun money for crazy investments that I feel have potential. For me it falls under the category of risky investments, but hey, nothing ventured - nothing gained.
So where and how is the best place to begin?
Yes sir, very unfortunate. Given that the lost ETH is currently $15k in value, it will most likely be worth around $100,000 in a year or two.
Oh well, live and learn!
Would you care to share how exactly you lost $15K in ETH? Did someone hack your account and stole them. Isn't the whole point of blockchain so that people cant modify the chain and steal your money? They would have to hack all the nodes to modify the transactions on who owns the currency right?
MOD NOTE: About a dozen posts removed discussing whether or not crypto-currency counts as an "investment" or "speculation."
This thread is not for discussing semantics of what makes an investment, or if crypto-currencies count.
If you want to start a new thread to argue about this, feel free to do so, or look up one of the other crypto-currency threads that already has this same back and forth. Please not derail this thread with this argument yet again.
Cheers!
happy bloody monday!
anyone buying the market on discount?
People need to quit doing these stop losses. A mentor of mine who is about 65 lost $17,000 during that stock market flash crash back in 2015. It's even stupider with the crypto currencies since they are free from any SEC-type regulation.
This past weekend I didn't check the prices at all and my grand total of 2 ETH's and 1 litecoin lost about $200 in value. Boo-hoo. My intention is to hold these until one year from their purchase date.
Back when people were buying illegal drugs and paying out bonuses the IRS couldn't track with bitcoin, it was actually being used as a currency. Now that you can't really buy anything with bitcoin or ETH that you can't with regular cash, they have no special use and everyone's just speculating.
I'm just going to leave this link here for all of the "Vanguard Index Funds or Bust!" people coming in here and blabbering that cryptocurrencies are a joke. That's because there's more to Blockchain technology that you haven't educated yourself on. I can only give you my opinion and suggestion that you should, at the least, learn about them.
http://www.goldmansachs.com/our-thinking/pages/blockchain/ (http://www.goldmansachs.com/our-thinking/pages/blockchain/)
Blockchain Technology will have a very large effect on many industries. IMO this is one of the greatest investment opportunities of a generation. But there will be risks, scams, and security measures we will have to wade through.
I'm just going to leave this link here for all of the "Vanguard Index Funds or Bust!" people coming in here and blabbering that cryptocurrencies are a joke. That's because there's more to Blockchain technology that you haven't educated yourself on. I can only give you my opinion and suggestion that you should, at the least, learn about them.
http://www.goldmansachs.com/our-thinking/pages/blockchain/ (http://www.goldmansachs.com/our-thinking/pages/blockchain/)
Blockchain Technology will have a very large effect on many industries. IMO this is one of the greatest investment opportunities of a generation. But there will be risks, scams, and security measures we will have to wade through.
The block chain is great.
That doesn't mean the currencies will necessarily have any value.
Etherium the block chain will be successful. That doesn't mean ETH the currency will, they're two separate things.
(Obviously you know this, but it makes me wonder why you bring up block chain in a digital currency thread except to confuse. Yes, block chains are useful. That's not an argument that a corresponding digital currency will be, or will last.)
Don't post here much but since I've gained so much valuable information from the site, though I'd give back a little.
Blockchain technology is possibly the next paradigm shift in technology. Everyone wants exposure to the next internet/mobile phone/integrated circuit/assembly line. The problem with blockchain technology is that it isn't clear how to get financial exposure to it. Buying BTC or ETH may get you there, it may not. Think of it as believing cell phones being the next big thing and buying stock in Nokia. The difference is that if the cell phone failed, you still have an investment in a real company making other products. With cryptocurrencies, you're presumably going to be left with a worthless digital asset.
I have around 10% of my portfolio in crypto right now and plan to hold for at least a few years.
Blockchain technology is possibly the next paradigm shift in technology. Everyone wants exposure to the next internet/mobile phone/integrated circuit/assembly line. The problem with blockchain technology is that it isn't clear how to get financial exposure to it. Buying BTC or ETH may get you there, it may not. Think of it as believing cell phones being the next big thing and buying stock in Nokia. The difference is that if the cell phone failed, you still have an investment in a real company making other products. With cryptocurrencies, you're presumably going to be left with a worthless digital asset.
The generation scheme seems crazy to me. Just burning up electricity to compute useless hashes.
The generation scheme seems crazy to me. Just burning up electricity to compute useless hashes.
not every token is mined (ie. XRP (ripple) - their protocol is based on consensus. depending on who you talk to (99% of the "crypto-anarchists"), they're considered a travesty to this "new world", despite having the fastest and most innovative technology.
Please don't come and shill XRP in here bud...lol just kidding!
Do you guys have any resources to learn more about the different cryptocurrencies?
i like / visit:
bitcointalk.org (messageboard and great place to learn)
bitcoinmagazine.com (news)
coindesk.com (news)
cointelegraph.com (news)
I am interested in this post and while I am not currently invested in any cryptocurrencies I have started following the market through coinbase. I will probably start a position but I wanted to learn a little more about it. Perhaps some kind soul could answer a few questions for me:
Is it too late to invest in Bitcoin? Have I missed the train and should focus entirely on something like Eth? Or is it worth starting a small stake?
Obviously I would recognize that this is speculative and there are no guarantees. Of course like any Mustachian I would prefer not to lose my money entirely. Can I use stop/losses effectively to hedge against risk? If so what % do you set them for so that they're not constantly triggering in response to market volatility?
Do stock strategies apply to this market? For example should I dollar cost average a set amount every month?
Is it worth learning about the lesser known coins or do you have to be a computer expert to understand them?
Back when people were buying illegal drugs and paying out bonuses the IRS couldn't track with bitcoin, it was actually being used as a currency. Now that you can't really buy anything with bitcoin or ETH that you can't with regular cash, they have no special use and everyone's just speculating.
Also, as I mentioned previously, the cryptocurrencies can't really buy you anything right now that cash or paypal or whatever can't. Bitcoin was actually being used as currency when Silk Road was up and during the brief period of time when the IRS didn't notice companies paying bonuses with Bitcoin. At any moment some new window might appear and the cryptocurrencies will be able to do something cash can't. Or it might never happen.
As for #1, I have no first-hand experience. I am acquainted with people who did use silk road and because of the working knowledge they gained a few years ago they were early adopters of Ethereum and one bought $5,000 back in early March that is now worth about $30,000. However I don't think any of them are actually using Bitcoin or Ethereum to buy or sell stuff anymore.I know someone still using Bitcoin to purchase things online that they shouldn't. It's definitely still being used for that.
However I don't think any of them are actually using Bitcoin or Ethereum to buy or sell stuff anymore.
2) Cryptocurrencies have apparently been useful in countries with massively fluctuating, hyperinflating, or restricted currency (e.g. Venezuela) or places that have eliminated cash (e.g. India). That's a use for it that cash can't do, because cash doesn't exist or is close to worthless.
I had not thought of #2. Probably useful in some situations for people in unstable areas, but then again, relatively few people have much money in poor countries to begin with, and those that do are more often than not up to no good.
India runs on cash. According to Bloomberg, “India has among the highest usage of cash across global economies,” accounting for up to 98% of all transactions. Modi’s bill ban took 86% of it out of circulation, instantly. When he announced the ban on October 8, he gave just four hours notice.
But as a poster just noted, if there is no "blockchain company", then there is no specific place in which to invest.
Example: A big bank has 1,000,000 clients. Every day the bank needs to time stamp the status of its clients’ accounts, in an immutable way, with the possibility of segregating that data afterwards. Let’s assume 1 EC allows one to store the data of 1 client. You need 1,000,000 EC = 1,000 USD = 111 FCT. Over a month time, 111 * 30 = 3,330 FCT are burned for this sole purpose. As the supply is 73,000, you need only 73,000 / 3,330 = 22 entities to operate at this scale to consume the full 73,000, causing the total number of FCT to shrink substantially. To this example, add the demand for FCT triggered by the Bill & Melinda Gates project, and also the DHS security project, the Chinese smart city initiative, the dLoc project, etc. And this is only the beginning!
Of course, this exercise is done by keeping the price constant. The huge amount of demand for FCT will make the price skyrocket. In fact it has to, in order to prevent deflation. Keep in mind that very large institutions are in discussions with Factom and about to sign contracts. Plus, the Harmony suite was probably made with the help of big actors in the industry to get a tailor-made product. (Factom has a number of former exec-level real estate movers on their staff.) The take-away is this: the more companies that use the Factom protocol, the higher the price of FCT must climb.
I'd been debating whether or not it made sense to start a thread about my experiment with crypto currency, but since I came back to the forum to discover there's already going on, here's my first update on my less than three week old old experiment with both mining (ZEC) and currency appreciation (BTC + a little ZEC). The numbers will seem quite low compared to folks like Tonyahu, but patterns should hopefully be representative.
Currently running 4 GTX 1060s (purchased for the experiment) and 1 GTX 970 (in the computer I use for VR). Have a 5th 1060 out of commission at the moment, potentially this is just an issue with a bad riser. 1060s are a bit slower than the cards a lot of folks run, but due the demand driving up the cost of 1070 on up, when I pulled the trigger these had the shortest payback time. Currently mining ZEC and getting paid in BTC through NiceHash but I've also experimented with mining ZEC directly through flypool.
I wanted to separate out the idea of "mining crypto currency for profit" from the idea of "owning crypto currency for price appreciation" in my records. "Mining income" assumes I sell everything for dollars at the prevailing price on the day it was earned. "Capital Gains/Losses" tracks the difference between mining income and the actual net worth of the cryptocurrency. I jumpstarted the currency appreciation half of my experiment with ~0.44 bitcoins I found leftover on an old computer. Since if I wasn't doing the experiment I would have cashed that out, I reset my starting value on those coins to the price they would have received on the day I started the experiment.
My sunk costs would be lower if I built a second machine (by $200, or $400 if I subtract out what I spent on the last 1060 that may still come online at some point), but the only way I could have gotten to the point of knowing how to build the second machine was to build the first one. Currently 3 weeks in. Averaging about $13.50/day in mining income and $4.30/day in capital gains. If I can keep that up I'm 58 days from my break even point overall and 84 days away from my break even point considering only income from mining.
The rate at which the difficulty for ZEC mining is increasing has me a little concerned about the likelihood of success for my little experiment. From the start of my experiment to today, difficulty has increased from ~2M to ~3.5M. So far the price of ZEC has increased roughly proportionately ($240/ZEC->$360/ZEC, so I'm not seeing a big decline in my average daily mining take but it looks like the price may be starting to level off.
(https://i.imgpile.com/nNz0KW.png) (https://imgpile.com/i/nNz0KW)
Anyway, lots of things could go wrong, but it continues to be a fun experiment, the rack I built could easily scale to 24 total graphics cards if I ever decide to put real money into this, and worse case scenario, I've got everything I've spent so far down in my monthly accounts as entertainment/hobby spending, not investment.
t's a good question. Electricity is a bit messier to track but based on my back of the envelope calculations I should be only spending an extra $25/month on electric if I achieve 100% uptime.
But as a poster just noted, if there is no "blockchain company", then there is no specific place in which to invest.
There are many blockchain companies, trying to create and apply technology in different fields (mainly financial), they are mainly (or all) privately held startups, small businesses, etc. And most will probably die before you hear of them.
You could invest in them and many would like funding but you would be investing in the private market (And you may have to be an accredited investor)
Almost have all my rigs built. My goal is $100 day. So far so good...
Little scared when I look at the stack of empty video card boxes in the corner. I really hope I can make enough to pay off the initial investment and let the rest ride. Current estimates is about a 4 month break even.
I see a lot of potential in Sia.
Question for Canadians with a crypto-currency portfolio. I opened a coinbase account, but for methods of purchasing, it only lets me use Visa or MasterCard? There is a 4% fee, and i'm not sure what my credit card will charge (like a cash-advance fee) if i use it to buy. Also, how do i get my money out? Back through my credit card?
if you're talking about holding established coins for multiple decades, as opposed to trying to catch a newish coin make 10x gains in a single year, you should be able to watch the trajectory for each coin. whether it's seeing how that coin's mining system works over several years, how quickly security problems get patched, how chain forks and upgrades are handled, if scalability appears to be on track, how/if the coin is being regulated by governments, how the coin's price responds to stock/bond market crashes, etc., it probably won't be a big surprise if a particular coin positions itself for long-term survival. also, the network effect could theoretically lead to several coins gaining a large user base and becoming entrenched.
Question for Canadians with a crypto-currency portfolio. I opened a coinbase account, but for methods of purchasing, it only lets me use Visa or MasterCard? There is a 4% fee, and i'm not sure what my credit card will charge (like a cash-advance fee) in addition if i use it to buy. Also, how do i get my money out? Back through my credit card?
I used a prepaid debit card to buy and my bank charged me an international fee of $9 or something like that. I haven't sold yet so I don't know what happens.
And i just checked, coinbase doesn't support the selling of digital currency in Canada. So, i can buy, pay 4%, plus possible cash advance charges, and I can't ever sell it. What the hell?
And i just checked, coinbase doesn't support the selling of digital currency in Canada. So, i can buy, pay 4%, plus possible cash advance charges, and I can't ever sell it. What the hell?
Can you withdraw to Paypal account? Then from Paypal to Canadian bank.
I'm interested in this. I could see it being 5% of my total portfolio, which I would automatically rebalance out of if it doubled (nonopled?) to be sure of a profit but did not rebalance back into except within a narrow range. I would do it like ARS suggested and equally weight 10 currencies (or so) because even if nine break even, if a single one rises 1000% I have it made. Dollar cost averaging should be very effective for building a large position in something that is crazy volatile.
The problem is convincing myself to sink the money. I'd prefer to go the mining route. The even harder problem would be convincing my wife to let a few thousand go for either of those purposes.
I'm interested in this. I could see it being 5% of my total portfolio, which I would automatically rebalance out of if it doubled (nonopled?) to be sure of a profit but did not rebalance back into except within a narrow range. I would do it like ARS suggested and equally weight 10 currencies (or so) because even if nine break even, if a single one rises 1000% I have it made. Dollar cost averaging should be very effective for building a large position in something that is crazy volatile.
The problem is convincing myself to sink the money. I'd prefer to go the mining route. The even harder problem would be convincing my wife to let a few thousand go for either of those purposes.
But that's exactly my point. You wouldn't "have it made"... if 1/10th of 5% of your portfolio (or a half a percent of your portfolio) went 10x, you'd suddenly be up 5% on your whole portfolio. Whoopee!
Is it worth risking 5% of your portfolio for that chance to gain... 5% on your portfolio?
Sure doesn't seem like it to me.
And yes, maybe there are more massive gains, or maybe you make nothing at all, and get wiped out. But a reasonable scenario just doesn't excite me. You'd have to take massive risks (large % of your portfolio) and/or get very lucky, and at that point, if you think you will get very lucky, why not just go to the casino?
Or do you think it'll gain 2500x like maze mentions? And if so, does it have a 1 in 2500 shot to do that, basically?
I don't feel like anyone talks about amounts, or odds. They're just like "well, i think it'll go up. i think cryptocurrencies have a future."
okayyy... and?
But if you pick one of the coins that "make it", that is, their protocol gets adopted by some industry or the world, then you definitely aren't looking at x10. You're looking at 100x...1000x...more.
Someone else mentioned earlier in the thread that if you are interested in the possibility of the technology, one of your best bets might be to educate your self on those skills and sell your abilities, i.e. your personal capital. This seems somewhat consistent with what I've seen on the consulting / freelancing job sites with the posts of people looking for people skilled at blockchain development, creating a new cryptocurrency, applying existing toolkits, etc. I haven't dug far enough to see what the hourly consulting rates are, but I imagine they'd be lucrative? Anyone dug in?
In a gold rush, it doesn't hurt to be the one selling shovels.
I have seen billrates from $150 to $250hr depending on the skills needed. Others are just offering profit sharing (percent of profits). It is a GREAT time to be a software developer, I never seem to have enough time to do all the work that seems to float by.
Sure. Let's talk about Maize's 2500x gain for a second.
Let's stick with Bitcoin, to start with.
Bitcoin, over six years, went from ~1, to ~2500. Cool.
Now let's say you buy, or mine, or have, some Bitcoin. Are the same gains feasible?
I don't think so, and here's why. Each coin would be worth $6,250,000. If that doesn't sound absurd, consider this.
Every person who bought at least $400 worth of Bitcoin (or mined enough) when it was cheap ($1 or less) is now a "Bitcoin Millionaire." If the coin 2500x again, they'd each have 2.5 billion, or more (if they had more coins, so they had more than exactly 1MM right now).
Can we have that many bitcoin billionaires? Well, why does bitcoin rise in value? For the same reason gold might rise in value; it's what people are willing to pay. It's not producing an income, the way a stock market investment might. It's just what people are willing to pay.
The problem with valuing a bitcoin at 6.25MM is that people can't afford to drive the prices that high. You can't make that many billionaires out of a speculative item, because not only do you hit a point where people don't want to pay that, you hit a point where there's literally not enough money in the world to make each one worth that*.
*Yes, if massive inflation happens, but then those billions aren't worth much anyways; I'm talking real dollars.
Good comments.
I think the further problem will be the continued proliferation of new-and-improved cryptocurrencies. So if $3T+ in cryptocurrencies are in used in 10 years, that value will be spread across dozens of major currencies and hundreds or thousands of lesser-used currencies.
I do think that mass chaos is possible very soon if individual banks or even individual retailers start their own currencies. For example, Macy's and Target and everyone else could take the store credit card one step further by having a store currency. Maybe it could be cheaper to administer than a store credit card or gift cards, if only because it would mitigate security issues.
It's crazy to think that an exchange might trade Macy's Coins and Target Coins. It would also take a lot of traffic out of the traditional credit card system, so it would be bad for credit card points and the various card routing services that have been skimming every transaction since the 1960s. The more credit cards decline in use and benefits the more Store Coin activity we'd see.
I think the further problem will be the continued proliferation of new-and-improved cryptocurrencies.
...an estimate of a maximum of 70x additional growth in the price of bitcoins.
...an estimate of a maximum of 70x additional growth in the price of bitcoins.
i'm no economist, but for a hypothetical upper-bound scenario, wouldn't you have to take into account the other markets bitcoin would likely take a large slice of, in addition to the US dollar? what about the gold market, international real estate, and other fiat currencies?
another thing to consider is that only ~100k bitcoins are traded daily, out of the current 16.4M bitcoin in circulation. i believe this shallow market drives the market price up significantly. assuming bitcoin in cold storage aren't being somehow traded in the far future, if we say the day-to-day exchange rate is double the "true" value of a bitcoin, that 266x could become 500x at the exchange. this would be my rainbows+unicorns 30 year outlook.
Pure opinion. My BIL put Most of their savings into Etherium at close to 300$. I think that was incredibly foolish and voiced my opinion as such. That is the only reason I ended up reading this thread.
My BIL put Most of their savings into Etherium at close to 300$. I think that was incredibly foolish and voiced my opinion as such. That is the only reason I ended up reading this thread.
The mainstream is just barely dipping in. This is almost like 1995 when the public started their investments in internet stocks and the market went beyond crazy and invested in any company that said they may create a webpage.
The mainstream is just barely dipping in. This is almost like 1995 when the public started their investments in internet stocks and the market went beyond crazy
Yeah, possibly. But stocks are stocks and invented currencies aren't ownership and don't pay a dividend.
...if people started to sell gold to buy bitcoin in significant numbers, the price of gold would drop rapidly so you wouldn't have $8.2T available to buy bitcoins. I'm not sure how to model this one...
I don't see how owning bitcoins is a substitute for owning your home or other real estate. Could you elaborate on that point?
The number you're using is 100k trades day/16.4M coins = 0.006 trades per coin per day. If you're right, then the velocity of bitcoins is only 1/3 of what I used above, and that would mean the final potential value of bitcoins if they completely replaced the USD would be 3x higher than what I calculated, which is in the same range of multipliers as what you estimate above.
No sell near 400$. Still has it, and I believe its at a lower value then when purchased. And yes, I assume the same thing you assumed. The overall value probably isnt a very large amount.
Also after looking at AMD and Nvidia - I dont think either is a good buy at their current price. In fact I think they are both terrible buys... My opinion again...
Okay, so if Bitcoin can't 2500x any more, the vast majority of its gains are gone. What about ETH, the second most popular coin? Well, being at ~250 (+/-... ~190 as of this typing, but as high as ~400 a month ago), it's just a factor of 10 below BTC. It'll have the same problem that it can't grow that much.
Question for Canadians with a crypto-currency portfolio. I opened a coinbase account, but for methods of purchasing, it only lets me use Visa or MasterCard? There is a 4% fee, and i'm not sure what my credit card will charge (like a cash-advance fee) in addition if i use it to buy. Also, how do i get my money out? Back through my credit card?
I used a prepaid debit card to buy and my bank charged me an international fee of $9 or something like that. I haven't sold yet so I don't know what happens.
So, as a Canadian, is there another site i should use if i want to buy and sell from my bank account?
Update on the mining experiment.
(https://i.imgpile.com/nwUxK1.png) (https://imgpile.com/i/nwUxK1)
(click to zoom in)
The recent decline in cyptocurrency prices has essentially halted the growth in difficulty for ZEC mining, but the difficulty isn't going down at all either. Presumably everyone who bought new graphics cards during the recent runup is trying to recoup as much of their investment as possible even if the decline in price is great enough that buying new graphics cards for mining doesn't make financial sense at the moment (and since all the other currencies seem to be moving down in concert people cannot simply switch over to mining a different currency). So unless the price decline continues to the point where mining drops below the cost of the electricity to run the cards or the value of another currency that's mineable with GPUs spikes, I don't expect mining difficulty to actually decline.
I'm having a lot of fun gaming out different people's incentives and the possibilities in different future scenarios. However, it seems like this might be a stressful time if I had sunk real money into my mining hardware.
Nope. I'm just earning money more slowly if you account for the extra charge on my electrical bill. If I was losing money (after electricity) the slope of the blue line would be negative.
Right now I'm still making approximately 4x as much from mining as I pay for the extra electricity, which is a reasonable profit margin if you don't worry about paying off the cost of the mining right. A few weeks ago it was 10x.
(I am losing money right now on the value of the bitcoins and ZEC I haven't converted to USD, but that's a completely separate issue from whether mining makes money or not.)
I haven't messed around at all with underclocking. Do you find that it makes a significant difference in your power consumption?
Back when electricity was only 10% of my mining income, it seemed like it wasn't a great trade off to spend time trying to optimize power consumption, but if current trends continue I imagine it's something I'll want to explore more.
My biggest problem is that I don't understand the true fundamentals behind it. I would have no idea how safe any coin is or how easy it would be for them to split etc... thus its extremely difficult to hold as it drops.
Any helpful info on that?
There seems to be something like this here: http://www.bittwenty.com/bit20.php
I haven't given it much of a look yet, and I'm not sure I trust them over doing it myself. It's worth noting that the do exclude certain coins like Ripple and Tether, and they also cap each coin to 10% of the index to avoid dominance.
Question for Canadians with a crypto-currency portfolio. I opened a coinbase account, but for methods of purchasing, it only lets me use Visa or MasterCard? There is a 4% fee, and i'm not sure what my credit card will charge (like a cash-advance fee) in addition if i use it to buy. Also, how do i get my money out? Back through my credit card?
I used a prepaid debit card to buy and my bank charged me an international fee of $9 or something like that. I haven't sold yet so I don't know what happens.
So, as a Canadian, is there another site i should use if i want to buy and sell from my bank account?
JAYSLOL, for what it is worth, when I purchased Bitcoin with a credit card through Coinbase, the credit card company (Barclays) treated it as a regular purchase. That means I earned points on the purchase of my Bitcoin. With about 2.1% earned back from my credit card in cash with these miles, that essentially reduced the fee I had to pay through Coinbase to about 2% on the purchase of Bitcoin which is almost what the fee is for a bank transfer purchase.
YMMV, but if you can't find another purchasing alternative, then purchasing through Coinbase with a credit card that earns you decent miles is an option.
I purchased 16 ethereum coins in november at ~$12 a coin then got fed up with the price moving sideways as btc took off from $600 to $2k+ and sold out at $12 or $13 then it took off to nearly $400..... If only I had put a couple thousand on eth at $12/coin.... thats a life changing amount of gains...
My biggest problem is that I don't understand the true fundamentals behind it. I would have no idea how safe any coin is or how easy it would be for them to split etc... thus its extremely difficult to hold as it drops.
Any helpful info on that?
consider looking back through history with how every market downturn resulted in a market come back at some point.
those who kept buying (dollar cost averaging) or just held on, ultimately fared better than those who panicked and sold.
Well that's not true.
Nor that.i'm not talking about a single asset, i mentioned markets.
Well that's not true.
well, it is. financial markets ultimately recover at some point.QuoteNor that.i'm not talking about a single asset, i mentioned markets.
Tell me how the tulip market (https://en.wikipedia.org/wiki/Tulip_mania) is doing.
consider looking back through history with how every market downturn resulted in a market come back at some point.
Well that's not true.Quotethose who kept buying (dollar cost averaging) or just held on, ultimately fared better than those who panicked and sold.
Nor that.
Do you think there's never been any assets that went to zero?
Tell me how the tulip market (https://en.wikipedia.org/wiki/Tulip_mania) is doing.great, my tulip portfolio is up 8.7% over the last 24hrs.
The interesting question is why did it go up 8.7% in one day?
Was there a major announcement?
Have the fundamentals changed?
Where do we expect the value to go tomorrow or next week?
I believe this kind of growth/speculation is damaging in the long run. I experienced the dot com hysteria and subsequent crash - this feels very similar.
I purchased 16 ethereum coins in november at ~$12 a coin then got fed up with the price moving sideways as btc took off from $600 to $2k+ and sold out at $12 or $13 then it took off to nearly $400..... If only I had put a couple thousand on eth at $12/coin.... thats a life changing amount of gains...
My biggest problem is that I don't understand the true fundamentals behind it. I would have no idea how safe any coin is or how easy it would be for them to split etc... thus its extremely difficult to hold as it drops.
Any helpful info on that?
regarding ETH, keep in mind that there is NO SUPPLY CAP. they were smart to capitalize on the enterprise aspect, which was extremely smart and IMO is the reason why they've managed to hold on.
even though cryptocurrencies are a new asset class, i would study investing psychology and fundamentals as most of them probably apply. many people have panicked and sold (some at huge losses), assuming the market will never come back. consider looking back through history with how every market downturn resulted in a market come back at some point. those who kept buying (dollar cost averaging) or just held on, ultimately fared better than those who panicked and sold.
*to add, when choosing a token to invest in/buy, look at tokens which have a real use case that could result in widespread adoption and active dev teams. with the proliferation of ICO's, read that company's white paper, and engage with the general crypto-community (bitcointalk.org for instance). good luck.
There currently isn't a single ICO with real world value. The ICOs are not equity in the company but based on some future value of utility. They are really dangerous instruments compared to Bitcoin/Ethereum that have at least some proven themselves with at least one use case currency
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Tell me how the tulip market (https://en.wikipedia.org/wiki/Tulip_mania) is doing.great, my tulip portfolio is up 8.7% over the last 24hrs.
The interesting question is why did it go up 8.7% in one day?
Was there a major announcement?
Have the fundamentals changed?
Where do we expect the value to go tomorrow or next week?
I believe this kind of growth/speculation is damaging in the long run. I experienced the dot com hysteria and subsequent crash - this feels very similar.
Actually yes, there was pretty good news yesterday that a large number of Bitcoin miners have begun running the new code release yesterday that supports Segwit adoption. That's very good news. The recent drop in prices was related to concern about whether or not there would be a chain split come August first. The fact that so many miners are now adopting SegWit means that a chain split is less likely and users of Bitcoin are more confident. I think the August 1st upgrade date will be a non-issue and Bitcoin will be able to facilitate a lot more transactions than previously and this will result in a large price increase by the end of August.
There currently isn't a single ICO with real world value. The ICOs are not equity in the company but based on some future value of utility. They are really dangerous instruments compared to Bitcoin/Ethereum that have at least some proven themselves with at least one use case currency
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There is so much wrong with this statement. To make a bold claim that there isn't a single ICO with real world value is vastly ignorant to the technology and what ICO's represent and the benefit they provide.
No, they're not equity in any company themselves, but they are equity in a protocol that a company could build itself completely off of. ICOs give developers the opportunity to develop protocols while giving incentive to users to adopt the protocol by giving them a share of the monetization that the protocol provides. Previously it was always a "chicken or the egg" scenario when trying to develop a new technology protocol. A developer might want to create a brand new protocol that would provide a huge benefit, but it might rely on a vast amount of early adopters to get the protocol off the ground.
A great example of this is decentralized cloud storage (ie, Siacoin and Storj). To get a new decentralized cloud storage solution off the ground, it would require a large number of users in the system to ensure there are enough nodes to decentralize the storage of files for new users looking to store their files. But, if there is no incentive to give people to put their hard earned free space up for rent, then it would be very difficult for a solution like that to ever get off the ground. ICOs provide an immediate stake into the solution by creating an incentive in the form of a crypto-currency to those individuals that become a part of the protocol. This allows a system like this to immediately build the framework needed to bring users and adoption to their new protocol. To say that this has no real-world value is insane. These solutions could dramatically shake up the cloud storage market that is in need of one desperately. A decentralized cloud storage solution you can trust is exactly what the market needs.
There currently isn't a single ICO with real world value. The ICOs are not equity in the company but based on some future value of utility. They are really dangerous instruments compared to Bitcoin/Ethereum that have at least some proven themselves with at least one use case currency
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There is so much wrong with this statement. To make a bold claim that there isn't a single ICO with real world value is vastly ignorant to the technology and what ICO's represent and the benefit they provide.
No, they're not equity in any company themselves, but they are equity in a protocol that a company could build itself completely off of. ICOs give developers the opportunity to develop protocols while giving incentive to users to adopt the protocol by giving them a share of the monetization that the protocol provides. Previously it was always a "chicken or the egg" scenario when trying to develop a new technology protocol. A developer might want to create a brand new protocol that would provide a huge benefit, but it might rely on a vast amount of early adopters to get the protocol off the ground.
A great example of this is decentralized cloud storage (ie, Siacoin and Storj). To get a new decentralized cloud storage solution off the ground, it would require a large number of users in the system to ensure there are enough nodes to decentralize the storage of files for new users looking to store their files. But, if there is no incentive to give people to put their hard earned free space up for rent, then it would be very difficult for a solution like that to ever get off the ground. ICOs provide an immediate stake into the solution by creating an incentive in the form of a crypto-currency to those individuals that become a part of the protocol. This allows a system like this to immediately build the framework needed to bring users and adoption to their new protocol. To say that this has no real-world value is insane. These solutions could dramatically shake up the cloud storage market that is in need of one desperately. A decentralized cloud storage solution you can trust is exactly what the market needs.
Cloud storage market won't be shaken up from this. If you are technical you will realize that the extra redundancy requirements and high chance of data loss. Means they will never be competitive with Amazon. I worked for a large cloud hosting company and it's difficult even at massive scale to come to pricing parity with Amazon. Having some random people host it and with many more copies is a joke. It will never be in the same price realm. Each of these ICOs is hyping some future vaporware.
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And i just checked, coinbase doesn't support the selling of digital currency in Canada. So, i can buy, pay 4%, plus possible cash advance charges, and I can't ever sell it. What the hell?
Can you withdraw to Paypal account? Then from Paypal to Canadian bank.
I dunno, the site just automatically knows im in Canada, and only gives me the option to link a credit card and as far as I can tell, no paypal or other options
And i just checked, coinbase doesn't support the selling of digital currency in Canada. So, i can buy, pay 4%, plus possible cash advance charges, and I can't ever sell it. What the hell?
Can you withdraw to Paypal account? Then from Paypal to Canadian bank.
I dunno, the site just automatically knows im in Canada, and only gives me the option to link a credit card and as far as I can tell, no paypal or other options
Should have the option when you go to sell, if you click through "add payment method"
Something like the following screens:
1)
(http://i.imgur.com/GeVWAjO.png)
2)
(http://i.imgur.com/75iA5W1.png)
3)
(http://i.imgur.com/JX3GdyX.png)
I can imagine not linking to a Canadian bank account, but would be surprised if Paypal was not supported for Canadians
Barring that, you can always send me the Bitcoin and I could send it to you. I'm totally trustworthy. On an unrelated note, everyone, I might have found an even better way of getting bitcoin than mining :)
Cloud storage market won't be shaken up from this. If you are technical you will realize that the extra redundancy requirements and high chance of data loss. Means they will never be competitive with Amazon. I worked for a large cloud hosting company and it's difficult even at massive scale to come to pricing parity with Amazon. Having some random people host it and with many more copies is a joke. It will never be in the same price realm. Each of these ICOs is hyping some future vaporware.
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Cloud storage market won't be shaken up from this. If you are technical you will realize that the extra redundancy requirements and high chance of data loss. Means they will never be competitive with Amazon. I worked for a large cloud hosting company and it's difficult even at massive scale to come to pricing parity with Amazon. Having some random people host it and with many more copies is a joke. It will never be in the same price realm. Each of these ICOs is hyping some future vaporware.
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Maybe not immediately, but it will become a major competitor I believe. How is it vaporware? The Storj network infrastructure is usable today. I used it the other day to store files and those files were stored redundantly, encrypted (with a private key that I own), and split into small fragments across 5+ geographically diverse nodes. If you were technical, you'd know why your statement is ridiculous. The only downside is that it isn't as usable at the moment. You need to use some cli scripts to upload and download files and the commands used require specifying unfriendly file and bucket IDs to upload and download files. So technically, the system works as designed, they just need to work on the usability of it so that it can appeal to a broader market.
Because the files are fragmented across many nodes, download speeds are high because the bandwidth is split across those nodes similar to how Bittorrent achieves its high download speeds.
Decentralized cloud storage will be way cheaper than what any other cloud storage provider. The cost of Storj is about $0.015/GB per month. Amazon is $0.023/GB per month and Microsoft is $0.030/GB per month. It is way easier to achieve scale when it is distributed and decentralized as opposed to one single entity trying to match those costs at scale.
Just look at Bitcoin itself. It is capable of achieving processing speeds that are more than 500 times more powerful than the top 500 supercomputers on earth combined. No single entity could ever achieve that. The reason is because the costs are distributed across the network and share among the network's users. The same thing happens with any decentralized solution. Whether it is Bittorrent, cloud storage, computing, etc.
Why do you think that even some larger providers choose to host larger downloads via Bittorrent as opposed to trying to serve those downloads themselves? Because it is simply cheaper to do it in a distributed/decentralized method as opposed to paying the higher costs of hosting it centrally.
EDIT: Just noticed OneCoolCat responded similarly. Kudos.
Tulip mania is an interesting analogy because it's a story of a failed alternative currency. Tulip bulbs experienced explosive growth in a short time and attracted many speculators.
Items that attract speculators and have their value driven irrationally upwards are at high risk of major crashes. The explosive growth in value could be the trigger that invalidates the currency. The value must stabilize for the currency to be useful.
The interesting question is why did it go up 8.7% in one day?
I agree cryptocurrency is different, and I wouldn't even say it's necessarily in a bubble. But it's a good ridiculous counter to ridiculous statements like these:
Those who kept buying always do better? What about when it goes to 0? No market has ever gone to 0? Tell that to the currency market for the Zimbabwe dollar.
What about when they sell (yes low) and put it into a market or asset that performs better going forward? The opportunity cost going forward is all that matters, and you can't say that someone who held always did better than someone who sold (and invested in something else).
Cryptocurrency has a lot going for it, possibly. We don't need hyperbole and inaccurate statements to muddy the waters.
The interesting question is why did it go up 8.7% in one day?
i have a large / diversified crypto portfolio, so some fared better than others. the volatility in general is ridiculous...
The interesting question is why did it go up 8.7% in one day?
i have a large / diversified crypto portfolio, so some fared better than others. the volatility in general is ridiculous...
up 26.5% today!
Centralized system will have better pricing, the core costs are hard drives and electricity. Both are cheaper at scale. P2p file sharing has been around for 20 years. This is great for piracy, not if you want to have consistent reliable storage. There is a whole thread on hacker news where people go into more detail here, this is actually a technical forum https://news.ycombinator.com/item?id=14806440
If you want to look at pure underlying economics, one of our competitors has a great post detailing how much it costs to run a storage costs.
* From https://www.backblaze.com/blog/hard-drive-cost-per-gigabyte/ 1TB of storage cost around $25. * I'll assume 3 year life-span for a drive. * Add 50% costs for the infrastructure and electricity to support the storage. * Add another 17.6% due to redundancy (17 data shards + 3 parity) - https://www.backblaze.com/blog/vault-cloud-storage-architecture/
Gives a minimum cost (before employee costs, marketing etc) of $1.22/TB/month.
If we do the same with Siacoin (which I believe stores 3 copies of your data) we get $3.12/TB/month.
I know the company I'm at has a few million clients and even at our scale competitions with Amazon on price is nearly impossible on the storage side. It's not where the margins are
I think people are just hyped about ethereum so just trying to find any valid usecase to use blockchain.
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My question is what are the coins for, particularly with the applications of the technology that don't seem like they want to be an alt-currency. For example, two of the coins mentioned up thread, Sia and Storj. I checked both websites, generally understand what they are trying to do with the distributed storage and content access, but don't understand why anyone would want to own the coins.
Anyone have an explanation for amateur?
Thanks.
How do people feel about SegWit and this august 1 possible change/fork whatever you want to call it? This seems like a huge risk to any stability from BTC. BTC's widespread actual use (compared to other alt-coins) is its big advantage and this seems like it could mess up that real work use.
I've sold enough BTC to be net ahead on everything I bought about a year and a half ago so I can hold the last couple coins with Coinbase for the long haul and feel like I still did ok. In the libertarian spirit of alt currencies, the most recent BTC sale proceeds will be put into physical silver and stored in a secure, non disclosed location. I hope I am on the correct side of the fork!
Even if one is on the majority side of a Fork, the fork splits users and it would seem the two halves will always be worth less than the sum.
Wondering if someone can clear something up for me. Bitcoin is supposed to be inherently deflationary, correct? Presumably good as a store of wealth if that all works out, however isn't having a predominately deflationary currency (in the case of the depression, a gold-backed us dollar) a good part of what caused the Great Depression to be so severe? Aren't we setting up what could be the largest global depression in history if Bitcoin goes mainstream and everybody hoards it because it always goes up? Spending and real investing stop, economy tanks, causing a deflationary feedback loop making everything worse. Thoughts?
it ultimately comes down to the choice of whether the merchant prefers the properties of the dollar versus bitcoin
Regarding deflation, I actually think that property of bitcoin will help its adoption as a medium of exchange. If a merchant has a choice to make a transaction in dollars or bitcoin, it ultimately comes down to the choice of whether the merchant prefers the properties of the dollar versus bitcoin. If the merchant understands that after making an exchange in bitcoin the result of that transaction will hold its value for a longer period of time, then it makes sense for the merchant to want to accept bitcoin as a payment option. If more merchants see the value in bitcoin as a payment option, then it will end up being adopted quicker in the marketplace.
On the consumer side, deflationary spirals are bad in a traditional economy because they are unexpected. But, deflation with bitcoin is expected and static. It is a property of the currency and cannot be manipulated. Therefore the concept of a traditional deflationary spiral doesn't apply to bitcoin. If someone wants a TV today, then they'll purchase it when they can afford it knowning that the next bitcoin they earn will have the same deflationary property as the one they just spent. Traditional deflationary spirals can't provide that assurance when the government controls the currency because there is no telling when the currency supply contraints will fluctuate. Therefore, currency hoarding takes place under those circumstances.
Because it's really not money, it's more like electronic gold. It's designed to be hoarded, not spent.
-W
Because it's really not money, it's more like electronic gold. It's designed to be hoarded, not spent.
-W
See, the thing is that's totally cool with me, i don't really care if people hoard an electronic asset designed to preserve wealth, i'd probably participate. I'm also totally cool with a crypto currency designed to make digital commerce easier/cheaper/better, i'd definitely participate. The problem comes when the asset being hoarded ALSO becomes the global mainstream currency on which commerce depends on, then it seems to me we'd be up shit creek soon after.
I still don't get why that couldn't happen with Bitcoin. If it goes up consistantly and there is a limited supply, why wouldn't people hoard it? Its not even mainstream yet and people are already hoarding it and paying exponentially higher amounts for it practically every day.
As long as that stays the case, the deflation of bitcoin doesn't really present any economic challenges. The deflation issue would only be a problem if contacts started specifying future payment amounts in bitcoins:
If a hypothetical person took out a mortgage where the monthly payment was 3 bitcoins a month back when bitcoin was $900/coin, that person would be in trouble right now (actually so would the bank if they made a lot o these mortgages and no one could pay them anymore).
If a cryptocurrency startup had hired a super programmer at 20 bitcoins/month hack when the price was $900/coin the startup would be in trouble right now.
Because it's really not money, it's more like electronic gold. It's designed to be hoarded, not spent.
-W
See, the thing is that's totally cool with me, i don't really care if people hoard an electronic asset designed to preserve wealth, i'd probably participate. I'm also totally cool with a crypto currency designed to make digital commerce easier/cheaper/better, i'd definitely participate. The problem comes when the asset being hoarded ALSO becomes the global mainstream currency on which commerce depends on, then it seems to me we'd be up shit creek soon after.
I think that the two functions can largely co-exist at least the way things are right now.
Generally folks selling things in bitcoin don't have fixed bitcoin prices. They have fixed prices in euros or dollars or RMB or what have you. If you pay in bitcoins you send them however much of a bitcoin corresponds to the price in the local currency at that particular moment. Similarly, lots of folks paying for things in bitcoins aren't keeping a lot of bitcoin around, but go out and buy some (either personally or the program they're using to send money does it for them) depending on how much they need to spend on a particular transaction.
As long as that stays the case, the deflation of bitcoin doesn't really present any economic challenges. The deflation issue would only be a problem if contacts started specifying future payment amounts in bitcoins:
If a hypothetical person took out a mortgage where the monthly payment was 3 bitcoins a month back when bitcoin was $900/coin, that person would be in trouble right now (actually so would the bank if they made a lot o these mortgages and no one could pay them anymore).
If a cryptocurrency startup had hired a super programmer at 20 bitcoins/month hack when the price was $900/coin the startup would be in trouble right now.
I still don't get why that couldn't happen with Bitcoin. If it goes up consistantly and there is a limited supply, why wouldn't people hoard it? Its not even mainstream yet and people are already hoarding it and paying exponentially higher amounts for it practically every day.As long as that stays the case, the deflation of bitcoin doesn't really present any economic challenges. The deflation issue would only be a problem if contacts started specifying future payment amounts in bitcoins:
If a hypothetical person took out a mortgage where the monthly payment was 3 bitcoins a month back when bitcoin was $900/coin, that person would be in trouble right now (actually so would the bank if they made a lot o these mortgages and no one could pay them anymore).
If a cryptocurrency startup had hired a super programmer at 20 bitcoins/month hack when the price was $900/coin the startup would be in trouble right now.
First, it should be noted that the rapid price increases we are seeing today with bitcoin are not related at all to deflation. Bitcoin at the moment is a very inflated currency. The increase in price has more to do with an extreme increase in demand because it is so new.
The discussion about deflation isn't relevant to bitcoin until demand has stabilized, new bitcoins are no longer created (or at at least created at a much slower pace than today), and bitcoin becomes the primary currency of society. These three 3 won't happen for a very long time. When they do happen, the value of bitcoin will rise at a slow and gradual rate, not like the rate that we're seeing today. This means that there will still be an incentive to invest that currency into businesses who would be able to turn that investment into profits better than if that currency were to just sit around idle in a wallet. At the time of this slow transition, the economy will likely contract as it adjusts, but over time it will lead to a slower growing economy that is more resilient to recessions.
If those three things do occur, then it will likely be a very slow process to get there. We're so used to the inflationary nature of our currency, that many things are just tailored to an inflationary economy. For example, as Maizeman mentioned, things like wages are designed around today's inflationary nature of our currency. Every year people receive wage increases (hopefully) to help their earnings keep pace with inflation. With a deflationary currency, we'd no longer need these wage increases annually. Naturally, lower and middle class earnings would rise with the economy instead of stagnating today relying upon our governments to increase earnings for the poor. This will provide higher buying power for people who currently lack it today.
As far as lending goes, interest rates are part of the lending process because the government manipulates those rates along with the currency supply. With a static deflationary currency, we'd no longer need interest rates when lending. Instead, if you take a loan to purchase something and that something costs 5 bitcoin, then you simply pay say 5 bitcoin back over the course of 5 years. Because the currency is deflationary in nature, the lender will make their money through the lending process simply because of the fact that the currency is deflationary, unlike today where lenders make money through interest rates. Or, in the case of borrower risk, the lender can simply measure the interest rate based on that risk without the need to adjust that rate based on the government prime rate. The borrower won't have any problem paying it back because the payments are steady as well as their wages. Nothing would really change there. The only thing that would change is no longer requiring manipulated interest rates by the government to artificially inflate the economy.
Also, because the government can no longer artificially inflate the economy through the money supply, recessions wouldn't be as common as they are today and our economy would become more resilient. This will result in less of a wealth gap because recessions lead to increasing wealth gaps in society. Combine that with a lower and middle class who's wages increase naturally and you have a much healthier financial economy and society.
These things won't happen for a long time. We're a long way off from ever being paid by our employers in bitcoin. In the mean time, prices for goods sold in bitcoin will be continued to be measured in fiat currency and thus the government will continue to control the price of goods, the monetary supply, wages, etc and bitcoin won't have much of an impact on any of that.
Any wallet where you have access to your own private keys would mean you'd be able to spend on both blockchains if there really is a fork.
I looked more into the ethereum fork and it turns out that even some places like coinbase where your coins aren't stored in a wallet where you control the private key and didn't support "ethereum classic" still allowed people who had ethereum deposited with them to withdraw the forked currency for several months after the split (although there is no guarantee that they'd do that again).
What should I expect if another digital currency supported by Coinbase experiences a future hard fork?
The industry is evolving rapidly and we expect that best practices will develop over time on how to handle hard forks. Right now we are handling each one on a case by case basis.
"Customers who wish to access both bitcoin (BTC) and bitcoin cash (BCC) need to withdraw bitcoin stored on Coinbase before 11.59 pm PT July 31, 2017. If you do not wish to access bitcoin cash (BCC) then no action is required."https://cointelegraph.com/news/coinbase-advises-users-to-transfer-btc-
In a somewhat suprising move, Coinbase explicitly said they would not support Bitcoin cash.
I went ahead and built a mining rig. Parts as follows:
...snipped...
I had a spare SSD laying around. I'm not counting the $19 that I spent on the Kill A Watt Electricity Usage Monitor that is in the photo or the tools and parts that I needed to run Ethernet to the garage.
I'm running Ubuntu 16.04 and Calymore's dual miner 9.7. I'm getting ~122Mh/s at Ethereum while simultaneously getting ~3675Mh/s at Sia. I'm drawing ~1320W which seems on the ragged edge of the power supply that I chose. Dual mining Sia increased power consumption by about 30% and decreases Ethereum production by ~3%. I pay $0.08/kWh.
I'm curious because I don't have any experience mining alt-coins with GPUs, but I do mine Bitcoin. What is your profitibility in mining alt-coins with GPUs? Your upfront costs seem pretty hefty for such minimal mining power (MH/s). How does that hashrate translate with alt-coin profitibility taking into account your upfront cost of $1800?
A year from now [Bitcoin Cash] could be worth $0 or $5000 per coin. It has all the same characteristics of bitcoin with bigger blocks, and more exchanges are starting to support it. ... From where I stand though I don't see how one can be a believer in bitcoin and not think the same price increases can happen for bitcoin cash.
It looks like coinbase is ooching towards supporting bitcoin cash. Anyone have any thoughts on what to do with the new cash-coins? Is bitcoin cash actually getting used out there in the real world?
my current thinking is as soon as I can, I will dump the bitcoin cash coins and be happy with whatever I get for them as its essentially free money.
From what I see bitcoin cash is like getting in on the ground floor of bitcoin. Why not hold or add to your bitcoin cash position? A year from now it could be worth $0 or $5000 per coin. It has all the same characteristics of bitcoin with bigger blocks, and more exchanges are starting to support it.
I'm watching from the sidelines, not willing to speculate with my own cash in any crypto. From where I stand though I don't see how one can be a believer in bitcoin and not think the same price increases can happen for bitcoin cash.
I'm curious because I don't have any experience mining alt-coins with GPUs, but I do mine Bitcoin. What is your profitibility in mining alt-coins with GPUs? Your upfront costs seem pretty hefty for such minimal mining power (MH/s). How does that hashrate translate with alt-coin profitibility taking into account your upfront cost of $1800?
As of right now (current difficulty and price) I am mining $6.89 worth of Ethereum and $1.86 worth of Sia per day while spending $2.53 on electricity ($0.08/kWh). So, that's $6.22 per day after electricity. Obviously as prices and difficult change that can change a lot. So, I guess that's $189 after electric costs per month.
I'm not sure that this is a great investment, but I max out my 401k every month with equities. To me this is a fun side project that *might* earn me some money. Obviously, I don't just want to burn $1800, but I know just how risky this is.
EDIT - I hope to use the parts for 3 years.
How many watts is your rig running on? AMD or Nvidia?
This new rig, x8 1060 6gb is running just under 800 watts which is pretty amazing really. All cards have memory overclocked and power turned down to 60% using MSI afterburner.
Kaby Celeron,
Asus Prime Z270 (this mb is amazing)
4gb whatever was cheapest
60gb ssd (Windows 10)
Mix of 1060 6gb (stupid limits, have to mix and match brands and sizes).
EVGA G2 1000W PS
The best thing about building rigs, I am getting pretty good with aluminum which is a really useful skill to have I am finding out. It is so strong, light, looks cool, and is very cheap if you buy the right size.
For those who are wondering how digital currencies will be used as a form of money:
- Bitcoin is designed to be a store of value (fixed, decreasing inflation rate and limited total supply)
- Litecoin is designed to be a medium of exchange (also with a fixed, decreasing inflation rate but with a much larger total supply and faster transaction confirmation time)
- Ethereum is designed to be a token that is used to power decentralized applications that run on top of the Ethereum blockchain
Zcash, Monero, and Dash (and a handful of other, similar coins) are designed as mediums of exchange but offer a privacy-oriented transaction mechanism that makes it nearly impossible to identify a user by their transaction history (which is what Bitcoin, Litecoin, and Ethereum currently allow). I see government regulation as a huge hurdle for these privacy-oriented coins, so I plan on watching from the sidelines for the time being, and learning more about them as the digital currency market grows legs.
Now that the digital currency market has ballooned to $100 billion+ in total capitalization, there seems to be a coin for everything and everybody. Some of these have very interesting use cases that may or may not disrupt entire industries (Ripple, Sia, etc..). But since we are investors here on the Mr. Money Mustache forum, we need to be able to separate the signal from the noise. That is why, in my opinion, it really only makes sense to buy Bitcoin, since you are looking to put your money into an asset that will consistently gain value over time. Ethereum is also worth considering as the demand for its applications outpaces the supply of Ether tokens. However, as other users have mentioned, it does not have a clear monetary policy.
I put together this little document for those who are interested in getting started with digital currencies but aren't sure where to start. Comments are enabled!
https://docs.google.com/document/d/11FSUczla4BOxpLfirYoc7PhFgAlUOQMvjwSL0lmJ2IM/edit?usp=sharing
Full disclosure: I mine Ethereum in the Ethermine pool (12x 1060 GTX 6GB @ ~238 MH/s) and buy Bitcoin during price drops (I transfer $500 or so per month to GDAX where it sits until I decide to buy in).
For new people, coinbase has an Auto invest feature you can setup weekly/monthly in the 3 major coins. It is by far the easiest way to get started. Just sign up for their website, link a checking account, and turn on auto invest for the coin(s) you want. No need to learn all this complex mining if you don't want to. Until there is an official ETF, this is a good start.
Yup! Things have been very good lately. I've made several times more in bitcoin the last two months than I have in my real job.
I predicted that Bitcoin would hit $3500 in August and continue going up from there, so this has well blown past my predictions.
I think a number of factors are at play. I believe how well Bitcoin handled the hard fork has given a lot of investors a lot more confidence in bitcoin knowing that any contention to the main chain isn't likely to be very successful. Also, Japanese adoption continues to be going bonkers. Combine that with all the worldwide uncertainty of war with North Korea and the traditional markets declining and bitcoin seems to be emerging as a very nice safe haven.
The future of bitcoin looks even brighter.
I do predict a somewhat downturn come November as investors get nervous again when the second phase of SegWit2X comes into play. This time miners of the main chain will actually need to upgrade software in unison as opposed to simply doing nothing avoid a chain split. But after a successful upgrade the price surge will continue up again.
Please do not predict, our ability to predict dwarfs the whims and fancies of the whaler. If a whaler wakes up with epiphany and starts selling, then it's the big dump. Early holders have way too much holdings to make any technical analysis stands.
maizeman I was thinking about your mining experiment, what would it look like if you added a line to account for mining income minus opportunity cost of the hardware? Not sure what the fair equivalent would be, if you sunk the equivalent cost of the hardware into the same coin you mine at the beginning and let it appreciate perhaps
Does opportunity cost really work this way for mining? One can buy one BTC for x dollars or etc or bannanas or babbage coins today. At least for BTC, difficulty keeps going up and the reward steadily goes down with each Halving. So going forward one doesn't really know what one can get from mining. As a year or two go by its likely your miner may no longer be cutting edge/competitive. Maybe one can say that one must be willing to switch to a more profitable crypto currency?
For new people, coinbase has an Auto invest feature you can setup weekly/monthly in the 3 major coins. It is by far the easiest way to get started. Just sign up for their website, link a checking account, and turn on auto invest for the coin(s) you want. No need to learn all this complex mining if you don't want to. Until there is an official ETF, this is a good start.
I'm very new to this, so I apologize if this is a dumb question. I bought 8 ETH using coinbase this week. My plan is a long term hold just in case it goes crazy like BTC and its a small part of my portfolio I'm willing to risk big losses with. My question - is it safe to keep in coinbase?
Thanks
Any sentiments on BTC v. BCH re: hash rate?
maizeman I was thinking about your mining experiment, what would it look like if you added a line to account for mining income minus opportunity cost of the hardware? Not sure what the fair equivalent would be, if you sunk the equivalent cost of the hardware into the same coin you mine at the beginning and let it appreciate perhaps
How does one justify the environmental impact of mining? I've read that processing BTC transactions takes 1000x+ the power of processing a credit card transaction. It seems like an anti-mustachian way to make money for this reason.
I've thought about that myself with my own mining as well. With the huge gains that Bitcoin has seen over the last several months, it is hard for mining to keep up with compared to if you had simply investing the up front costs in Bitcoin itself instead of the equipment (I think that's what your getting at).
However, it is hard to (or at least unfair to) calculate in the short term because in the long term mining will win out so long as you are able to mine back all the Bitcoin you spent on the equipment and then some. As long as you can mine back all the Bitcoin spent on your equipment plus a little more, then you'll be able to realize the gains you originally missed out on plus all future gains of the asset if you continue to hold.
@CanuckExpat, it's a good question. I'm out of town all week but would be interesting to run the numbers once I am back on my home computer. Could compare to putting the same amount of money I spent on mining equipment right into the cyptocurrency (right now I know I'd come out way behind just because bitcoin has been on a big run up in price), or into stock/bond index funds.
One important question to resolve, would you say it makes more sense to only consider the potential increase/decrease in value of the investment, or the total value of the investment? The money I spent building my miner is gone (maybe I could get a couple of hundred bucks for the parts if I wanted to mess around on ebay), which my charts show me starting off more than $1,000 in the hole. For an investment in the currencies themselves (or a stock index fund) I'd still be able to get my original investment out at any time (less any capital losses).
@lifeanon
Your analysis assumes that the mining is being uses as a method of buying bitcoins (or other currencies) which lumps together two very different financial questions: whether it makes financial sense to mine BTC/ETH/ZEC/etc and whether it makes sense to hold BTC/ETH/ZEC for appreciation. I'm currently doing some of both, but it could very easily be that once we're looking at this with the benefit of hindsight, one (either one) will have made financial sense and the other did not. So I'm trying to separate out the two effects as I go along.
What happens if you lose or break your hardware wallet?
If it drives technology and creates some new inventions or faster processors then the energy consumption might be worth it in the long run anyway.
I don't think the ends will justify the means in this case. I think many don't understand the massive scale of power going into cryptocurrencies right now. That's why I wrote the above post.
Currently, bitcoin accounts for a tiny but growing piece of the worldwide currency usage. Imagine what could happen as transaction volume grows by 10x, or 100x? (Transaction volume is what consumes the power, not the price of a Bitcoin). This seems entirely possible, if not likely, given the hash rate has grown by 4x in the past year alone.
I would agree with all of that with the caveat that Bitcoin isn't (and probably never will be) "money" in the sense that it's widely used for transactions. The inherently deflationary design IMO ensures that it will instead be a gold-like store of value (assuming it's anything at all in the long run, it could of course be abandoned for some other crypto system).
So the proper comparison, environmentally, is probably to physical gold.
-W
Regardless, Bitcoin is a LONG way from being used as a currency in any meaningful sense. The recent rise in popularity/price has certainly caused a lot of folks to buy fancy mining rigs and hoard their bitcoins, but that's not the same as walking to the store and getting a bag of apples. I know a few folks (normal folks who aren't interested in buying illegal Chinese drugs or whatever) who have bitcoin holdings and they look at me like I'm crazy if I suggest they could *purchase* something - there is no chance in hell they'll spend them, ever (though if the price drops enough, they'll panic-sell them!)
That's not a great setup for widespread adoption as currency. But I've been wrong before.
-W
Lifeanon, would you mind pointing me towards the service that provides your bitcoin denominated debit card?
I was not going to bring the great depression into this, but yes, Maizeman makes my point quite well. There are advantages to not having a central authority control the money supply (no hyperinflation) but we need to recognize that there are also HUGE disadvantages WRT the business cycle and the ability of a central authority to mitigate downside risks through currency manipulation.
Yeah, agree to disagree. IMO anything used as "money" (for exchange) needs to grow in supply sufficiently that hoarding it is never a good strategy (encourages investing, which is good, and consumption, which has positives and negatives). If you use your extra money to invest in... itself, that's not especially useful economically.
Bitcoin as constituted is mostly being hoarded, and the design of the system encourages this behavior.
Lifeanon, would you mind pointing me towards the service that provides your bitcoin denominated debit card?
The card I use is the Shift card. They have a partnership with Coinbase that allows you to spend your bitcoin residing in Coinbase using this card. So I just keep my small amount of spending money each month in Coinbase (the rest in a private wallet) so that I can spend my bitcoin just like I would with a checking account. The awesome part is that there are no transaction fees involved. There is a one time $10 fee to purchase the card and then there are $2.50 ATM withdrawal fees (just like about every VISA card out there), but I don't really use it at any ATMs so that is not a big deal. That's it. No annual fee either. The cool thing as well though is that it functions just like any other debit card. So in cases where I'm at the store and pay with the card as "debit", then if the store allows it, I can ask for cash back if I need it. That allows me to instantly turn my bitcoin back into USD cash without paying any conversion/transaction fees at all.
https://www.shiftpayments.com/card/ (https://www.shiftpayments.com/card/)
There are a few other bitcoin debit cards out there, but most of them are prepaid cards that store the value on the card in USD as opposed to bitcoin. So you only receive the value of your bitcoin at the time you load the card. I didn't like that approach and most of those have many additional fees to them as well.I was not going to bring the great depression into this, but yes, Maizeman makes my point quite well. There are advantages to not having a central authority control the money supply (no hyperinflation) but we need to recognize that there are also HUGE disadvantages WRT the business cycle and the ability of a central authority to mitigate downside risks through currency manipulation.
WRT to inflation/deflation, don't get me wrong, I didn't mean to oversimplify the economy down to just the money supply policy alone. There are other factors for sure that come into play when it comes to what contributes to market ups and downs. But the argument that there are outside forces that contribute to the effective money supply (such as fractional-reserve banking) is hardly an argument against having a decentralized non-manipulated deflationary currency. Any given type of currency isn't going to solve all the woes of a very complex economy.
The thing about bitcoin however isn't that it is necessarily forever static and can't be changed. It is the fact that it is decentralized and gives the power to a majority of its users instead of a powerful minority. In other words, if we got into a situation where the currency itself was what was holding our economy back (again, highly unlikely), then the currency (bitcoin) could only be changed if the benefit of that change received support from the community as a whole. This is where the idea of social good comes from with regards to bitcoin. But as was stated, it is highly unlikely that bitcoin's inherent nature will be the root culprit of any future economic perils and it will be more than likely that other destructive economic forces will be at play. Those other forces could be everything from fractional-reserve banking (that inherently leads to recessions at regular intervals), horrible lending practices, large-scale speculative bubbles, etc.
Finally, for what it is worth (since the depression was thrown out there), economists looked throughout American history and found that, outside of the Great Depression, there is no correlation between depression/recession and deflation (Atkeson, Andrew and Kehoe, Patrick. Federal Reserve Bank of Minneapolis. Deflation and Depression: Is There an Empirical Link? January 2004). Yes, deflation made what took place with the Great Depression worse, but it wasn't and can't be the cause of it. For example, defaulting loans during an economic hardship can have the same effect as a contracting money supply that presents itself in a recession, but that doesn't mean that the resulting deflationary pattern was a root cause that gave way to that recession. The idea that deflation hinders economic growth is completely baseless.
Hey all, glad the discussion is going well.
I want to let everyone know that IOTA is something you want to do some research on while the market cap is still under-valued.
Cheers!
Hey all, glad the discussion is going well.
I want to let everyone know that IOTA is something you want to do some research on while the market cap is still under-valued.
Cheers!
The problem with IOTA is that noone actually knows how it works. WTF is tangle?
Hey all, glad the discussion is going well.
I want to let everyone know that IOTA is something you want to do some research on while the market cap is still under-valued.
Cheers!
The problem with IOTA is that noone actually knows how it works. WTF is tangle?
A graph with a start and an end (but not necessarily followed in sequence).
https://en.wikipedia.org/wiki/Directed_acyclic_graph
My first thought about IOTA is that, holy shit, it would gobble up RAM like nothing else.
So on here IOTA has a volume to market cap ratio of <1%, while a lot of other currencies in the top 10 seem to be more in the 2-4% range. Does anyone know of structural reasons for this to be the case or is it just a random piece of statistical noise?
So on here IOTA has a volume to market cap ratio of <1%, while a lot of other currencies in the top 10 seem to be more in the 2-4% range. Does anyone know of structural reasons for this to be the case or is it just a random piece of statistical noise?
Ya, that's one of my biggest concerns with IOTA. It isn't very liquid at the moment and almost all trading for it (> 90%) takes place on just one exchange. I would never feel comfortable putting more than just a few bucks in it. That being said, a few bucks in it might totally be worth it.
That exchange does not let me register. I have no way to trade for it even if I wanted to.
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
I built an iOS app recently to help ppl track their cryptocurrency portfolios easily. Would appreciate any feedback on it. Thanks!
https://itunes.apple.com/us/app/coinbuddy-track-your-cryptocurrency-portfolio/id1271644974?mt=8
I built an iOS app recently to help ppl track their cryptocurrency portfolios easily. Would appreciate any feedback on it. Thanks!
https://itunes.apple.com/us/app/coinbuddy-track-your-cryptocurrency-portfolio/id1271644974?mt=8
Nice! I see you showing Neo in your screenshots. Cheeky way to tell everyone the app is up to date :))
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.
The same could be said about just about every other cryptocurrency.
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.
The same could be said about just about every other cryptocurrency.
Hey man, you must be new to the whole sphere. There are few coins that are as fast as Litecoin right now. The only one that would edge it out is a private coin like XRP, possibly Dash and the GOAT (Ethereum).
Do a transaction with UBIQ (still love the platform) and let me know how long it takes to get 25 transactions.
I'm using coinbase for ETH
I'm in the U.S.
Is there a good place that buys and sells all of the cryptocurrency with usd ?
I'm using coinbase for ETH
I'm in the U.S.
Is there a good place that buys and sells all of the cryptocurrency with usd ?
I also use coinbase to deposit/convert $USD into BTC, ETH, or LTC, then send some of those to Bittrex to buy some of the other coins. I have been able to find most coins that I am interested on there, and have had no major problems. Just be careful to transfer the correct currency into the correct wallet.
Any ideas as to why Litecoin is pushing higher? I bought exactly one Litecoin for about $25 back in May and it's now at $65. Obviously, I wish I had bought more, since the Ethereum tokens I bought as part of the same round of purchasing have barely budged.
Litecoin is just highly undervalued IMO. Same technology as Bitcoin but faster block times, bigger blocks, cheaper transaction fees...etc.
The same could be said about just about every other cryptocurrency.
Hey man, you must be new to the whole sphere. There are few coins that are as fast as Litecoin right now. The only one that would edge it out is a private coin like XRP, possibly Dash and the GOAT (Ethereum).
Do a transaction with UBIQ (still love the platform) and let me know how long it takes to get 25 transactions.
You misunderstand. I replied just about every other crypto has faster block times, bigger blocks, cheaper transaction fees than BTC.
I am new.
I'm using coinbase for ETH
I'm in the U.S.
Is there a good place that buys and sells all of the cryptocurrency with usd ?
I also use coinbase to deposit/convert $USD into BTC, ETH, or LTC, then send some of those to Bittrex to buy some of the other coins. I have been able to find most coins that I am interested on there, and have had no major problems. Just be careful to transfer the correct currency into the correct wallet.
I have not done this yet, if I buy BTC
And it goes up in price. I take it and and buy another Côin from bittrex.
Will coinbase send me paperwork on profits ?
I'm just confused on how you keep track of all this if I was buying 3-4 different coins.
Sent from my iPhone using Tapatalk
just speculation, but a lawyer employed by the firm representing the Winklevoss bitcoin ETF will now be in charge of ETF approvals at the SEC. this could explain the recent bitcoin price surge (just about to reach $5k).
https://www.bloomberg.com/news/articles/2017-08-04/getting-that-etf-approved-may-grow-easier-as-sec-shakes-up-team
http://www.investmentnews.com/article/20170831/FREE/170839978/sec-names-dalia-blass-director-of-investment-management
ETFs are another step in the right direction for legitimizing cryptocurrencies and giving everyday investors access to them. i expect a huge bubble to form when this happens, whether it's sooner or later. long-term crypto holders will be fine but i think a lot of folks new to cryptos will get burned.
I decided to to buy some cryptocurrency I started through Coinbase and bought ETH
Now I'm trying to buy some other coins through bittrex.
The biggest thing I'm trying to do is not leave the coins in either exchange. I am not the best with computers.
I'm just trying to find the easiest way to move it and what is the cost to take it out of these exchanges and into a wallet
Thanks for the help
Sent from my iPhone using Tapatalk
I decided to to buy some cryptocurrency I started through Coinbase and bought ETH
...
I'm just trying to find the easiest way to move it and what is the cost to take it out of these exchanges and into a wallet
Same question.
How easy is it to buy and sell a Bitcoin or Ethereum?
For instance, let's say BTC is $4k each and ETH is $500.
Can I just go on coinbase with $10k and purchase 2 Bitcoins and 4 units of Ether?
Then transfer them to an external hardrive wallet and disconnect it from my PC.
Then 1 year from now the prices double (BTC - $4k each / ETH - $1000). How easy it to sell and walk about with $20k (10k profit)
I decided to to buy some cryptocurrency I started through Coinbase and bought ETH
...
I'm just trying to find the easiest way to move it and what is the cost to take it out of these exchanges and into a wallet
there are fees involved when buying/selling on coinbase, but it's not a big deal if you're only buying occasionally. the ETH fee for transferring your ETH to an offline wallet for storage is minimal.Same question.
How easy is it to buy and sell a Bitcoin or Ethereum?
For instance, let's say BTC is $4k each and ETH is $500.
Can I just go on coinbase with $10k and purchase 2 Bitcoins and 4 units of Ether?
Then transfer them to an external hardrive wallet and disconnect it from my PC.
Then 1 year from now the prices double (BTC - $4k each / ETH - $1000). How easy it to sell and walk about with $20k (10k profit)
yes you've got the basics down. you will need to prove your identity to coinbase first though, but you can do simple identity verification for the amount you're looking to buy. withdrawing to a wallet on an external hard drive is probably fine for keeping the coins safe for a year. for storing coins longer than that there are a bunch of options out there depending on your needs and risk tolerance.
to sell on coinbase you'd simply have to send the coins back to your coinbase wallet, wait for the transaction to confirm, and then click 'sell' and withdraw the USD to your bank account.
you'd then need to report the USD gains as capital gains for your taxes. keep your own records for dates/prices/quantities bought and sold and then make sure the tax documentation coinbase provides matches your records.
The one that is getting me the biggest problems understanding because I'm not the best with computers. It's how to protect the different altcoins in a wallet or cold storage. It just seems to be going over my head because you can't put them all in one place. I believe every coin has its own wallet I'm just not sure if they are safe to leave there also.
I did all the verification on coinbase and still only at 5k
So I am hitting my limits on CoinBase and I want more. I heard GDAX was a good place to buy with lower fees once you get comfortable with wallets but I think I want to diversify into my 401k.
Now I am not sure this is a good approach to buying bitcoin, but for me I am willing to take the risk. I have most investments in tax sheltered accounts which would be great for trading bitcoin in. Unfortuntaly the only game in town right now seems like GBTC you can buy with fidelity. It seems to have a .0928 backing for every share kind of like IAU or GLD for gold, so at right nows price the value of BTC they hold is worth $405.88 a share and it costs about $750 a share. Huge premium.
I am going to take the plunge anyway and here is why.
- I am trading with pretax money, and no taxes on the trades
- No other options in my tax advatage accounts that I know of to hold btc
- It is uncorrelated to all my other assets which makes my golden butterfly portofolio overall potentially better
- The price could look inexpensive 5 years from now, good chance of amazon like growth
If another better priced fund comes a long that is a risk for the premium I am paying and could take some losses, but I will just switch to the other fund. I rather have an ETF that tracks the top coins, but this is what we have right now.
Most of my money is currently in Bitcoin and Ethereum. But lately, it's has been really tough (especially yesterday) to stay calm with my positions. I have almost all the time the urge to check it, how both BTC and Ethereum are doing, it's almost like some sort of addiction :D Even though I have invested them because I believe in the long term rise.
I can feel that way at times, 80-90% of my net worth is tied up in Crypto-Currencies and I have a portfolio consisting of 20+ companies / coins which I keep up to date with. I am effectively a part-time analyst.
It's worth it, but I wonder if this is how stock pickers felt during the the early 1900s on Wall Street
Robert Shiller calls bitcoin a classic bubble:
https://qz.com/1067557/robert-shiller-wrote-the-book-on-bubbles-he-says-the-best-example-right-now-is-bitcoin/
From some of the comments here we see the sort of emotion that drives bubbles. I have a hard time believing that we're still going to be talking about bitcoin specifically (blockchains yes and perhaps one or more cryptocurriencies) in 20 years, which makes the business of putting it in an IRA a bit ridiculous.
If you are in a bubble, what percent of people know about/are investing is a good metric to judge how close you are to having the bubble pop.
But it isn't a particularly good metric to distinguish between what is and isn't a bubble. For example many people know about and invest in the stock market, yet it is not a bubble. OTOH the Rhodium bubble of 2008 certainly WAS a bubble even though the vast majority of people didn't participate and probably couldn't even point to the element on a periodic table.
It is risky for sure, but 9 years is a long time in the technology world, it has endured longer then most tech companies. Do people hold Google, Facebook, etc in thier IRA?
Some do, but those are stocks, not tokens. Stocks are regulated. Tokens are not. Real currencies are regulated. Cryptos are not.
The success or failure of these currencies and tokens will be totally random.
Few things from the 90s have survived.
regulation has nothing to do with how well or poorly an asset performs. national currencies and stocks have plenty of problems.
The success or failure of these currencies and tokens will be totally random.
many foundational technologies from the 90s, 80s, and 70s have survived, including the internet and public key cryptography which cryptocurrencies are based on.
If you are in a bubble, what percent of people know about/are investing is a good metric to judge how close you are to having the bubble pop.
But it isn't a particularly good metric to distinguish between what is and isn't a bubble. For example many people know about and invest in the stock market, yet it is not a bubble. OTOH the Rhodium bubble of 2008 certainly WAS a bubble even though the vast majority of people didn't participate and probably couldn't even point to the element on a periodic table.
I agree. So, I'm curious of your opinion Maizeman... where are we at?
If you are in a bubble, what percent of people know about/are investing is a good metric to judge how close you are to having the bubble pop.
But it isn't a particularly good metric to distinguish between what is and isn't a bubble. For example many people know about and invest in the stock market, yet it is not a bubble. OTOH the Rhodium bubble of 2008 certainly WAS a bubble even though the vast majority of people didn't participate and probably couldn't even point to the element on a periodic table.
I agree. So, I'm curious of your opinion Maizeman... where are we at?
I'm honestly not sure at all. I've been following bitcoin off and on since stories about it started showing up on slashdot 6-7 years ago as a curiosity, and had an actual bitcoin wallet since before the mid-2013 price bubble burst. And I'm pretty sure I'm not better at predicting what the price is going to do than you'd get from flipping a coin. But it's awfully fun to watch.
Helps that the only money I've put into mining/crypto was drawn from my entertainment spending, not investment.
I too have owned Bitcoin since before the 2013 "bubble." There's really no telling what Bitcoin can do, BUT that doesn't mean I can't have an opinion :) .... I'm leaning towards Bitcoin itself failing* at some point. (When? Much harder to tell.) I believe it has flaws that will make it be pushed aside for an improved "digital currency." What I'm really interested in, are blockchains that solve real world problems like, for example, data authentication without having to trust a central organization.
It's wading through all of the hype, scams, and bubbles that's going to be the challenge.
As far as the entire crypto-currency space, while we will go through hype cycles and "bubbles" bursting and corrections, (as seen when Bitcoin skyrocketed to $22 and then a bubble burst and when Bitcoin skyrocketed to $1200 and a bubble burst and when Bitcoin skyrocketed to $4900 and then....) the total market cap of cryptocurrencies WILL continue to go up in time.
*By failing I do not mean the protocol itself. I mean it has problems with scaling and it will become obsolete to an improved blockchain coin designed to be a digital currency. It would probably still remain more as a souvenir type thing.
So filecoin just raised $250M USD and kept another $250M USD in premined coins for themselves, for a premarket, precustomer product. If this doesn't scream bubble I'm not sure what would. Read the analysis below
https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c
I'd personally bet on either a government or big international company (or group of companies) entering with a currency (actually designed well for the purpose of exchanging goods and services), backed by a big publicly known entity, and marketed as such, and that currency displacing everything already out there.
-W
The beautiful thing about this chat is it will be a good historical placeholder. In a few years when these technologies are thriving and taking over those who took the risk will be rewarded heavily and those who nay-sayed without doing their due diligence will see what they missed.So filecoin just raised $250M USD and kept another $250M USD in premined coins for themselves, for a premarket, precustomer product. If this doesn't scream bubble I'm not sure what would. Read the analysis below
https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-you-to-read-e60d5243f17c
Reward? $250M for zero equity. The ICOs seem like no reward. There may be reward in Bitcoin or Ethereum.
Sent from my iPhone using Tapatalk
QuoteThe success or failure of these currencies and tokens will be totally random.
it won't be random. as you say, it's an unregulated free market and the best cryptocurrencies will win.
To clarify, I do believe that 70%+ of these currencies will fail but we still have much larger valuations to hit before any "bubble talk" can be had. Eventually, yes, the bubble (2019-2020ish) will deflate and only those with unique value propositions will remain.
https://hackernoon.com/why-everyone-missed-the-most-mind-blowing-feature-of-cryptocurrency-860c3f25f1fb
regulation has nothing to do with how well or poorly an asset performs. national currencies and stocks have plenty of problems.Of course it does. All of the things the SEC does (or your county auditor for real estate transactions) is a response to the abuses that existed before those regulations were enacted. Any call you hear for an "elimination of regulations" is usually a shyster who recognizes how he can swindle someone when that seemingly onerous regulation is lifted.
QuoteWell Litecoin, et al., are all "better" than bitcoin, yet bitcoin reigns supreme, several years after these better competitors appeared. There are endless examples throughout history of a lesser product winning over a better one. Better salesmen and better luck. Bitcoin has the Winklevoss Twins and other high-profile champions. Litecoin does not.QuoteThe success or failure of these currencies and tokens will be totally random.it won't be random. as you say, it's an unregulated free market and the best cryptocurrencies will win.
Blockchain will be around for a long time. We're obviously going to see some changes in how digital banking transactions are carried out. The specific stew of cryptocurrencies that are attracting speculation at the moment probably won't survive for more than 10 years.
QuoteThe success or failure of these currencies and tokens will be totally random.
it won't be random. as you say, it's an unregulated free market and the best cryptocurrencies will win.
Yeah. The unregulated free market always picks the best technology to win. That's why betamax destoyed VHS. Wait . . .
QuoteThe success or failure of these currencies and tokens will be totally random.
it won't be random. as you say, it's an unregulated free market and the best cryptocurrencies will win.
Yeah. The unregulated free market always picks the best technology to win. That's why betamax destoyed VHS. Wait . . .
and VHS, DVD, and BluRay have all been abandoned in favor of streaming and DVRs.
right, but only temporarily until superior competitors came along. it appears random in the short term, but it's not random. if you zoom out you can clearly see that VHS, the temporary "winner," is long gone and deservedly so.
regulation has nothing to do with how well or poorly an asset performs. national currencies and stocks have plenty of problems.Of course it does. All of the things the SEC does (or your county auditor for real estate transactions) is a response to the abuses that existed before those regulations were enacted. Any call you hear for an "elimination of regulations" is usually a shyster who recognizes how he can swindle someone when that seemingly onerous regulation is lifted.
do you not believe in free markets? there are many examples of inferior products that only exist because they are protected by regulation and lobbying. one example is the crumbly old slow internet-averse global financial system. another example is the fossil fuel automotive industry.QuoteWell Litecoin, et al., are all "better" than bitcoin, yet bitcoin reigns supreme, several years after these better competitors appeared. There are endless examples throughout history of a lesser product winning over a better one. Better salesmen and better luck. Bitcoin has the Winklevoss Twins and other high-profile champions. Litecoin does not.QuoteThe success or failure of these currencies and tokens will be totally random.it won't be random. as you say, it's an unregulated free market and the best cryptocurrencies will win.
bitcoin was invented first, luck has nothing to do with it. litecoin (and other coins forked from bitcoin's source code) are cheap clones backed by way weaker mining networks. that's why bitcoin reigns supreme. litecoin was a failed attempt to make an ASIC-proof coin.
To clarify, I do believe that 70%+ of these currencies will fail but we still have much larger valuations to hit before any "bubble talk" can be had. Eventually, yes, the bubble (2019-2020ish) will deflate and only those with unique value propositions will remain.
https://hackernoon.com/why-everyone-missed-the-most-mind-blowing-feature-of-cryptocurrency-860c3f25f1fb
You are making some absolutely wild assumptions that no one on this Earth could humanly know, to the point that it's starting to make the opposing view's case even stronger.
And I'm for Blockchain technology.
right, but only temporarily until superior competitors came along. it appears random in the short term, but it's not random. if you zoom out you can clearly see that VHS, the temporary "winner," is long gone and deservedly so.
Right. But figuring out which technology will be the winner is not possible at the time that it matters for investing . . . because sometimes the market chooses the worst option.
Truly no one seems to have any idea what this stuff is actually worth! That's a source of excitement as well as stress. But if investment is about accepting volatility in exchange for a return, I cannot see how the return would be worth the volatility here. I suppose investing 1% of your stach would be defensible. If it triples next year, you got 2% more than you'd have with gold. But that other 99% of your portfolio is giving you 9.9%/year, amiright?
I feel that bitcoin and the technology behind it represents a huge shift in how currency is handled by humans. I see bitcoin as revolutionary as the internet itself. Therefore I am willing to put some of my money into bitcoin based on this idea without taking into consideration any risk or reward by doing so.
I feel that bitcoin and the technology behind it represents a huge shift in how currency is handled by humans. I see bitcoin as revolutionary as the internet itself. Therefore I am willing to put some of my money into bitcoin based on this idea without taking into consideration any risk or reward by doing so.
Nobody was really talking about it being "the future" until its value started getting ridiculous in the last year.
Bitcoin is almost 10 years old. Nobody was really talking about it being "the future" until its value started getting ridiculous in the last year. Yeah, there was that push back in 2012 or 2013, but after the crash, it returned to being the butt of jokes.
I keep my BTC and LTC on a Trezor wallet and ETH on a web based wallet via Trezor. But I just picked up a few Monero through Kraken and am not sure what to do with them. Any ideas?
A lot of the crypto trading scene reminds me of aspects of the penny stock scene 15-20 years ago, except more liquidity, more volatility and 24hr trading. Can be a bit wild out there as proven by the past 6 months.
What does its age have to do with anything?
Not sure what you mean by nobody, unless you're only following bitcoin based on what the media is saying at any given moment. Why did you put "the future" in quotes? What jokes are you referring to when you say that bitcoin is the butt of them?
Back when Bitcoin was invented, nobody was talking about the actual coins being a buy-and-hold investment. The coins were used as currency for a time, although most of it was either tax evasion (paying bonuses in bitcoin, for example) or to buy illegal drugs. People who heard about bitcoin but had no reason to do that stuff had no reason to figure out how to buy bitcoins, so they didn't.
Also, the "dream" held out there that bitcoin will be a tool for the little guy is very much a be careful what you wish for situation. There has been a dark side to all of the so-called disruptive innovations of the last decade -- downsides that blind proponents refuse to acknowledge. Uber, airbnb, etc., have all caused as many problems as they have solved, and cryptocurrency and tokens are no different.
China is moving forward with plans to shut down Bitcoin exchanges in the country, starting with trading platforms in key cities. All Bitcoin exchanges in Beijing and Shanghai have been ordered to submit plans for winding down their operations by 20 September. ... All exchanges are required to send regulators a detailed "risk-free" plan of how they intend to exit the market before 18:30 local time on Wednesday 20 September.
Fundamentals are good and team is good, HYPE hasn't hit it yet.
Cheers
Fundamentals are good and team is good, HYPE hasn't hit it yet.
Cheers
I'm honestly curious - what "fundamentals" do cryptocurrencies/exchanges/companies have?
-W
I'm honestly curious - what "fundamentals" do cryptocurrencies/exchanges/companies have?lol
Fundamentals are good and team is good, HYPE hasn't hit it yet.This kind of comment is what I'd expect from a PUMP & DUMP kind of investor. The statements made about future value have no basis. It would be more productive if you give some review of this new coin you just bought and how it's better than others rather than a shameless pump.
We must accept the fact that the cryptocurrency is the future of currency as the blockchain technology is far better than the traditional way followed by the central banks.
For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers.
For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers.
Saying that institutional banks utilizing blockchain technology to become more efficient is a threat to an open and decentralized bitcoin is like saying that a gas powered pickup truck model increasing its miles per gallon from 15MPG to 25MPG is a threat to Tesla. Bitcoin is such a huge paradigm shift that an efficiency improvement for centralized financial institutions utilizing fiat money will not be what impacts its success.
Well, as a sort of normal non-aligned person who uses money, I'd be much more likely to use (for actually buying stuff) a crypto currency issued by a major bank or government than Bitcoin or some other free-range crypto. The various horror stories of exchanges disappearing, people having their crypto stolen, etc all add up (for me, and probably for most folks without a strong preexisting opinion) to total distrust of any of them.
When ordinary people (not rich Chinese trying to hide money or speculate) start buying and selling actual stuff with Bitcoin on a large scale, you could convince me.
-W
For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers.
Saying that institutional banks utilizing blockchain technology to become more efficient is a threat to an open and decentralized bitcoin is like saying that a gas powered pickup truck model increasing its miles per gallon from 15MPG to 25MPG is a threat to Tesla. Bitcoin is such a huge paradigm shift that an efficiency improvement for centralized financial institutions utilizing fiat money will not be what impacts its success.
market share has nothing to do with it, i believe the point was that the markets don't overlap. that's why it's not earth-shattering for the crypto community. people who buy teslas don't care about the latest models of gas-powered pickups. likewise, people who believe in the future of non-government cryptocurrencies don't care about a new way banks are going to be transacting with fiat currency.
market share has nothing to do with it, i believe the point was that the markets don't overlap. that's why it's not earth-shattering for the crypto community. people who buy teslas don't care about the latest models of gas-powered pickups. likewise, people who believe in the future of non-government cryptocurrencies don't care about a new way banks are going to be transacting with fiat currency.
That was exactly my point.
If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought.
Now, if you'd excuse me, I am off to demand that I purchase a Ferrari for a few bucks while their marketshare is negligible.
If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought.
First off, marketshare of what? Second, in what world is the price of anything ever dictated by marketshare? By that measure, any new product, asset or commodity that comes to market would automatically start with a value of $0. It is no different for currencies.
The value of something in an open market is strictly determined by supply and demand. The more demand for something with a limited supply, then the greater its value. The market determines the value. Bitcoin is one of the few completely open and unmanipulated marketplaces out there, so if this economic principle were ever true for anything, it would be for bitcoin. You can argue that some people are purchasing bitcoin at today's price on the premise that its future marketshare of the gold market (for example) will be a certain amount, but that doesn't change the fact that today's value of bitcoin is based on today's market forces (supply/demand) of bitcoin, not tomorrow's. So the given price of bitcoin today is strictly based on today's supply and demand for it. So long as people continue to view it as a good store of value, then there will continue to be new people looking to bitcoin to store some of their wealth. The premise that it is a good store of value has a direct relationship with how well the network operates and whether or not it is technologically stable, which for the last almost 10 years, it has been so incredibly.
Now, if you'd excuse me, I am off to demand that I purchase a Ferrari for a few bucks while their marketshare is negligible.
Invested in my first ICO. It was painless. I feel like I am on the ground floor of an amazon, microsoft, or pets.bomb. I am ready for moon or total loss. So exciting. I still rather have a highly diversified crytpo ETF that spreads out the risks.
I didn't invest at Google IPO because I didn't quite understand how it all worked.I hate the feeling I have now looking at what could have been.
The mind is kinda selective though. You remember Google because they were the winner. There were a lot of losers, and picking the winner was not easy to do...
If you are based in the USA, you are either not "getting in on the ground floor" or the companies you are investing in through ICOs are going to end up in big trouble with the SEC. At best, companies in the USA are able to offer kickstarter-like ICOs where you are prepaying for a product that may exist in the future, potentially at a discount to its ultimate market price.
To understand the difference between these two transactions, ask anyone who helped kickstart the Oculus Rift with $2.4M in funding what their share of the profit was when Lucky Palmer went on to sell the company to facebook for a sweet $2.3B less than two years later (1000x return in two years).
Outside the USA you could indeed be getting in on the ground floor with various business ventures with something like an equity stake, but keep in mind that many VCs and Angel investors end up losing money, even the ones that make money expect to lose money on between 9/10 and 19/20ths of their investments, and that's after careful review of business plans and assessing the qualifications and personal qualities of the founders. As long as you really are prepared for a total loss though... here's hoping you shoot the moon!
One thing I've noticed when discussing cryptocurrencies elsewhere is that actual discussion of things that can materially effect the future of cryptocurrency is almost totally absent among crypto boosters.
For example: by the end of 2018, it's quite likely that the single biggest cryptocurrency on earth will be one developed by a consortium of six banks for the purposes of simplifying cross-border transfers. This project was announced about two months ago, and doesn't make use of any existing cryptocurrencies; instead it uses blockchain technology to simply make the existing system easier. If you think crypto has a future beyond fringe uses, this should be genuinely earth-shattering: we've just been shown that existing cryptocurrencies will be irrelevant to perhaps 99.9% of the world's money market activity. And yet, the day this appeared in the Financial Times, bitcoin's price simply kept going up. Even here, I don't believe there's been a single mention of it. At the very least, crypto is limited to interpersonal transactions that can't be done using existing currencies: at the most, even that is potentially under threat as it's now clear that banks can build their own systems for these purposes. And yet there's nothing; no acknowledgement of what this means, no acknowledgement that it's even happening.
Fair points ICO's should not be considered an "investment", but they have potential for making you real money. I'm not sure how a kickstarter does that.
My personal opinion is that a crypto index fund is a very bad idea.
Further to that, an index fund runs the risk of building false confidence. Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry.
My personal opinion is that a crypto index fund is a very bad idea.
Further to that, an index fund runs the risk of building false confidence. Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry.
So your stance is essentially that the crypto-currency industry as a whole does not have any worthwhile future at all? Wow, that's quite the bearish stance. Even some of the most bearish of bears on crypto-currencies yield to the fact that crypto-currencies in general are here to stay.
My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase. There may be cryptocurrencies in the future (although it's instructive to note that perhaps 99% of the population of the US have never once used cryptocurrency, and perhaps 99% of the remainder haven't used it for anything except speculative investment or illegal activity), but there's no reason to assume that what's currently popular will be what turns out to be any use whatsoever.
There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be. There's nothing stopping organisations which like blockchain technology from simply using that without reference to existing cryptocurrency. A gigantic chunk of the money that's currently in cryptocurrency is only there because of the promise of massive gains: if we believe the market will crash (and I have very little doubt that it will), we have no basis for trying to figure out what cryptocurrencies will be worth when the dust settles. Nothing. Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty, putting money in a crypto index is close to pointless.
My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase. There may be cryptocurrencies in the future (although it's instructive to note that perhaps 99% of the population of the US have never once used cryptocurrency, and perhaps 99% of the remainder haven't used it for anything except speculative investment or illegal activity), but there's no reason to assume that what's currently popular will be what turns out to be any use whatsoever.
There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be. There's nothing stopping organisations which like blockchain technology from simply using that without reference to existing cryptocurrency. A gigantic chunk of the money that's currently in cryptocurrency is only there because of the promise of massive gains: if we believe the market will crash (and I have very little doubt that it will), we have no basis for trying to figure out what cryptocurrencies will be worth when the dust settles. Nothing. Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty, putting money in a crypto index is close to pointless.
It is clear from what you've posted you have your biases and misunderstands of the technology and how it works. The blatant bogus statistics that you spout out are ridiculous and for someone who denounces speculation, you sure are doing an awful lot of it yourself.
Also, I don't think you understand how the crypto indexes work (such as BTWTY and Crypto20). They reallocate themselves to the top twenty crypto-currencies every month or so. So unless the crypto-currency market completely dries up (extremely unlikely), then a crypto-index fund has a lot of value. Plus, unlike mutual funds today, they're low maintenance with non-existent fees (driven by programming) and can't be manipulated and you don't have to worry whether or not your institution is gambling your money away behind the seasons. This is the power that mathematics, openness, and programmable money will bring to the financial industry.
One of the things I find odd about the crypto currency folks is how emotional they are about it (not you Maizeman!)
I own lots of stuff - stocks, bonds, a couple houses, many big fancy tools, etc. All of those things have some intrinsic value to varying degrees.
When I want to sell or buy something, I could care less what I use to make that transaction as long as it's easy, relatively secure, and that the currency is stable in value and accepted pretty much everywhere. I have no interest in whether or not that's dollars, bitcoins, dirty socks, you name it. I'm agnostic on the specific currency as long as it has those basic attributes.
As of right now, none of that applies, and the "success" of crypto looks more to me like failure, since none of them have managed to become commonly used or even stable in value. I have no interest in buying something that has no use and is only transacted with itself (I don't go out and buy a bunch of dollars to stick under my bed either, and those at least are easy to use for buying stuff I actually want).
So an index fund to me seems more like the cherry on top of a speculation sundae than evidence that the markets are "mature" or that you can "invest" in the technology as a whole by buying such a fund.
-W
What's with the furiously emotional response?
You asked about my position, and I explained it. I specifically avoided discussing the specifics of the technology, because the reasons I believe cryptocurrencies will collapse have nothing to do with the technology itself.
Regarding the rebalancing: I don't think you've read what I've written. I argued that indexing cryptocurrencies is futile, because they're all exposed to the same major risks, and explained that I expect to see a severe crypto crash. I do expect to see a drastic shrinkage in the crypto market, so monthly rebalancing and near-zero fees make no difference. Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value? If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates.
On the subject of my numbers: yes, I guessed, because real figures are hard to come by. That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency. And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto.
-"If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought."
-"The risks involved in investing in Bitcoin are almost identical to the risks involved in investing in Ethereum, or Ripple, or Monero"
-"they all have wildly volatile price swings, they're all more or less completely unusable as actual currency, and they're all effectively in the same mode characterised by Robert Shipper as indicative of a bubble."
-"Building an index fund does nothing to negate those risks, which are vastly bigger than the risks specific to individual altcoins."
-"My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase."
-"There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be."
-"Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value"
-"If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates."
-"Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty, putting money in a crypto index is close to pointless."
-"My personal opinion is that a crypto index fund is a very bad idea."
-"Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry."
-"That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency."
-"And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto."
I'm unable to follow this. Is blockchain the protocol? So investing/trading in the currency (e.g. bitcoin) will result in adoption of blockchain technology as a standard? I don't understand how that in turn would make the tokens more valuable.
I know all the protocols listed above and have a working understanding of how protocols are developed and evolve through consortiums and standards bodies like IETF. So I get about half of your comment above, but I don't think it ties together like you suggest.
My understanding is that blockchain is the protocol, like TCP/IP or HTTP are protocols. The coins are what travels over the protocol, like a particular webpage or Netflix show would. Now that we have this new protocol, companies (like banks) are starting to put it to all kinds of new uses. Recording the transfer of digital tokens is a nice proof of concept, but it seems the protocol can move on to bigger things without the original tokens that got it started.
What's with the furiously emotional response?
You asked about my position, and I explained it. I specifically avoided discussing the specifics of the technology, because the reasons I believe cryptocurrencies will collapse have nothing to do with the technology itself.
Regarding the rebalancing: I don't think you've read what I've written. I argued that indexing cryptocurrencies is futile, because they're all exposed to the same major risks, and explained that I expect to see a severe crypto crash. I do expect to see a drastic shrinkage in the crypto market, so monthly rebalancing and near-zero fees make no difference. Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value? If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates.
On the subject of my numbers: yes, I guessed, because real figures are hard to come by. That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency. And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto.
What was it about my post that was "furiously emotional"? I don't think I posted anything or wrote any sentence that exuded any emotion at all, in fact. Was there something specific about my post that led you to believe it was furiously emotional?
I did read what you wrote and to be honest I didn't really see much of any specifics other than your opinion on the matter...Quote-"If there are people who think Bitcoin's price shouldn't necessarily bear any relation to market share, we're in an even bigger and more ridiculous bubble than I thought."
-"The risks involved in investing in Bitcoin are almost identical to the risks involved in investing in Ethereum, or Ripple, or Monero"
-"they all have wildly volatile price swings, they're all more or less completely unusable as actual currency, and they're all effectively in the same mode characterised by Robert Shipper as indicative of a bubble."
-"Building an index fund does nothing to negate those risks, which are vastly bigger than the risks specific to individual altcoins."
-"My personal opinion is that the cryptocurrency industry as it's currently comprised is in a spectacular bubble phase."
-"There's no day-to-day use case for crypto as it stands, and ten years in it doesn't look as though there ever will be."
-"Why would I mention monthly rebalancing when discussing a fund I fully expect will lose perhaps 90% of its value"
-"If I have absolutely no faith in the underlying asset class, then it doesn't matter how the index fund operates."
-"Bitcoin could fall to a dollar; Ethereum could fall to a cent. With that kind of uncertainty, putting money in a crypto index is close to pointless."
-"My personal opinion is that a crypto index fund is a very bad idea."
-"Someone who invests in a crypto index fund may well think they're properly diversified, but they're still entirely exposed to the vicissitudes of what remains a very immature industry."
-"That said, though, I'd be pretty confident that less than three million Americans have actually possessed cryptocurrency."
-"And I'd be outright astonished if thirty thousand Americans have managed to actually pay for a legal good or service with crypto."
These are all the things from the last several posts of yours and most of it is either just speculative itself, misinformed and opinionated, or just outright false.
Investing in a crypto index fund allows an individual to diversify among crypto-currencies as a whole. It is no different than someone who feels that technology companies will do well, but rather than investing in specific companies, they invest in a fund that diversifies among the largest tech companies. You don't invest in a fund like that unless you're already comfortable investing in the underlying market itself. The same goes for a crypto index fund. Clearly, for someone like you who doesn't think crypto-currencies will be around in 10 years, then its not a fund targeted toward an individual like yourself. But, to say that they're a bad idea when they're clearly designed for individuals comfortable with the idea of crypto-currencies fails to understand the benefit they provide. They're for the individuals who feel that crypto-currencies have a place in the world, but aren't comfortable picking a winner just yet. If a particular crypto-currency fails and loses market cap, then it will fall out of the index fund and another currency will take its place. Overall, however, if one feels that the overall market will continue to grow (so far it has), then the index fund will as well.
I don't mind debating crypto-currencies and one look back at my previous posts throughout this threat and others regarding crypto-currencies will show that I enjoy a good debate and will always keep things cordial and free from personal attacks. However, looking at your previous quotes above, it is difficult to have an adequate debate regarding a topic when one side fails to talk about anything specific or outright uses false or exaggerated information.
"The blatant bogus statistics that you spout out are ridiculous."
This is what I was referring to as an emotional response.
Regarding the statistics I mentioned (and freely admitted were very rough guesses): it appears as though I have severely overestimated the number of American cryptocurrency users. This item of research from Cambridge University (http://www.cam.ac.uk/research/news/study-highlights-growing-significance-of-cryptocurrencies) indicates that the total number of users worldwide is three million, so my estimate of the same number for America alone was off by quite a distance. Cryptocurrency is in fact a good deal more niche than I had thought.
Regarding my estimate of 1% of transactions being for the purchase of legal goods or services: I freely admit that this is a shot in the dark. There's very little data on this at present; the best I could find just now was a survey done at a Chinese conference, where the self-reported figure for such transactions was 5%. If you have data to the contrary, feel free to share; I'm happy to recant in the face of better data.
On the specific subject of cryptocurrencies as a method for monetising protocol adoption: I have to say, I've been discussing cryptocurrencies with ardent advocates for a while now, and you're the first person I've seen coming in with this as a potential use case. It makes for interesting reading, and makes sense of some of what I've read elsewhere that was poorly explained. I'd still be extremely wary of investing in crypto at the moment, as I'm convinced prices have bee badly inflated by speculative investment, but I'm a good deal less cynical about its uses in ten to fifteen years than I was yesterday.
Would I be right in saying that this effectively means buying Siacoin is equivalent to putting money into an early-stage startup?
Interesting example on Sia. On the surface it looks like a valid concept and real use of digital currency for decentralized cloud storage.
I did some digging and have some concerns though. This thing could be just taking off, or it could be failing - I'm not sure. The coin itself had a spike in July, but now is down about 75% from the peak. I guess this was due to speculation? It seems that speculators driving up the price could effectively kill the whole thing before it gets off the ground by driving up the price too high.
I see the top hosts are offering storage for free now as well. So in effect, the coin is not being used at all for it's intended purpose right now? There is so much over-capacity in the network and so few early users that hosting storage is not profitable (income=0).
I did some digging and have some concerns though. This thing could be just taking off, or it could be failing - I'm not sure. The coin itself had a spike in July, but now is down about 75% from the peak. I guess this was due to speculation? It seems that speculators driving up the price could effectively kill the whole thing before it gets off the ground by driving up the price too high.
The OP was pretty clear that this was not a thread to debate if crypto currency is legit/real/of value/etc. But to discuss crypto portfolios, unfortunately it has been hijacked pretty hard.
Can you all stop now?
The OP was pretty clear that this was not a thread to debate if crypto currency is legit/real/of value/etc. But to discuss crypto portfolios, unfortunately it has been hijacked pretty hard.
Can you all stop now?
- Banker friendly coin: XRP
I personally do not like the thought of centralized coins, but this is a hedge more then anything that banks like control and will start using this platform.
- Banker friendly coin: XRP
I personally do not like the thought of centralized coins, but this is a hedge more then anything that banks like control and will start using this platform.
Limiting myself to the terms of the thread: going by the announcement from the six-bank consortium, financial institutions are going to skip the middleman and build their own cryptocurrency rather than use someone else's.
When I want to sell or buy something, I could care less what I use to make that transaction as long as it's easy, relatively secure, and that the currency is stable in value and accepted pretty much everywhere. I have no interest in whether or not that's dollars, bitcoins, dirty socks, you name it. I'm agnostic on the specific currency as long as it has those basic attributes.
As of right now, none of that applies, and the "success" of crypto looks more to me like failure, since none of them have managed to become commonly used or even stable in value. I have no interest in buying something that has no use and is only transacted with itself (I don't go out and buy a bunch of dollars to stick under my bed either, and those at least are easy to use for buying stuff I actually want).
In the spirit of the original post I thought I'd share a bit of my personal experience with crypto for those interested.
I've been doing the Mustachian method of index funds, slow-and-steady, etc. for 20 years. It has served me well. I kept a couple percent of my money reserved in cash for opportunities and then put a small percentage of that money into active investing (we're talking at most $2000 or so) mainly for entertainment. Trading individual stocks got me more active in something I enjoy so I played with it in a low-risk manner for a while. Good, wholesome, nerdy fun.
I learned about Bitcoin back when it was around $200 or so and bought $5 worth on a paper wallet from a friend. I just wanted to know how the technology worked, really. I set it aside and then learned more, bought a little more, etc. I went to a Crypto conference in August, 2014 and listened to a very compelling talk given by Vitalik Buterin about this new thing he was building called Ethereum and I immediately saw potential - if he and the team were able to pull it off, of course.
I put a few hundred dollars worth of my speculative "play" investment money into it and promptly forgot about it for a year and a half or so. I didn't even realize that people were trading it in any serious way until I looked up Ethereum and my $0.30 Ethers were trading at over $1 each. Crazy ROI especially for something so speculative. It went up so fast after that that I didn't know what to do. I sold enough to recoup my investment and to realize a little profit and let the rest ride. It was all safe money now.
Fast forward to a few months ago and what was left had gone up to be worth hundreds of thousands of dollars. It went from "price of a new car" to "price of a decent house" so quickly that I was gobsmacked. My wife and I decided to get out while the getting was great and realized enough gains to pay off our house! We're in our late 30s and there's enough left to buy another house with... all from a speculative bet 3 years ago.
I don't want to get anyone's hopes up nor do I want to proclaim that I'm some kind of investing genius. I won the lottery and I know it. This was a once in a lifetime speculation done entirely with money that was outside of our normal investment plan. Had I lost the few hundred dollars, fine - not a huge setback.
As to current holdings, I remain fascinated by the space. I hold Ethereum (inside and outside of an IRA), a little Bitcoin inside an IRA, and a few smaller startups (LINK, QTUM, NEO, MTH, OMG) that I managed to purchase at their ICO or close to it. Some are up, some are down. I doubt that I'll strike oil again like I did with ETH though.
Now I'm trying to reconcile just how far out of whack my overall asset allocation is. I never intended for crypto to be such a large portion of my portfolio and I'm trying to slowly divest. The tax situation is such that I want to do it slowly because of the capital gains. Come January 1st I'll be liquidating some more and moving it into good 'ol VTSAX. :)
I am not suggesting anything other than the OP's initial post. Personally I love debating the pros/cons/hype/potentials/scams/ etc just not here on this thread.The OP was pretty clear that this was not a thread to debate if crypto currency is legit/real/of value/etc. But to discuss crypto portfolios, unfortunately it has been hijacked pretty hard.
Can you all stop now?
The name should probably be changed then . . . currently it reads "Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion". You're suggesting that something like "Re: OFFICIAL: Blockchain / Crypto-Currency - Only Promotion And Good Words Allowed" would be more apt.
New day, new all-time high.
Scared money don't make money!
BTC over $5200! This little crytpo thing is 3% of my total portfolio but 90% of the gains. Pretty insane. Triggered another rebalance.
I believe omg to be the strongest contender despite the omg blockchain not yet existing, as compared to the current top 12 in coinmarketcap.com.
....
If anyone has questions, I'll share what I know.
Being MMM, low cost passive index funds are well proven. Applying the same to crypto currencies is what the Crypto 20 (C20) token provides. The fund contains the top 20 coins, is autonomous, and rebalanced weekly.
https://crypto20.com
If you feel that crypto will grow over time then this is a great way to have exposure to the top 20 coins in the market.
Just to be clear, I'm a longterm holder of eth as well.
I think that much of the value for those crypto comes from the fact that they are existing and functioning blockchains.
Iota is currently centralized and using a coordinator to springboard the network until it achieves enough network effect where it no longer needs to rely on the coordinator. I'm not convinced that it will be able to effectively remove the coordinator. In addition, there is the controversy surrounding it regarding cryptographic vulnerabilities.
The zksnark zero-proof in zec is planned for use in eth, and I don't see why it won't be adapted into omg.
From an empirical perspective, eth has a more foundational infrastructure, greater developer mindshare, and superior ecosystem over dash.
As for omg, once it goes live, it can integrate into an existing payment network infrastucture and allow various payment networks to transact with each other. Exclusive loyalty or reward programs, in-game currencies, etc, have the potential to be unlocked and transacted as value into a greater network. Also, an advantage omg will have over many of the existing blockchains is that a standardized onboarding cash in/out process is expected to be unveiled before year end; instead of relying on other crypto to get it, people will directly be able to trade for it with cash at supporting establishments (possibly convenience stores). Merchants and consumers will have a reason to use omg (reduced transactional barriers, lower overhead costs, trustless trust standard, etc).
So if I'm reading correctly the elevator pitch is that omg (once it is up and running) should be much easier to transfer into and out of (either from normal currencies, other cryptocurrencies, or game/reward program points) without requiring the use of 3rd party exchanges?
OMG will be huge, I have about 2% of my total crypto portfolio in it and expect great returns over the next few years.
my current portfolio
AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT
my current portfolio
AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT
Interesting, most of your choices are platforms built on Ethereum.
What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?
my current portfolio
AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT
Interesting, most of your choices are platforms built on Ethereum.
What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?
Touching on this, there are alot of shilling, misinformation, and pump-and-dumps in crypto. Projects get intensely hyped and made out to be extremely promising.
Most of these projects are purely whitepaper! They have no product. The idea-makers have no inkling of the pitfalls and challenges of the business world or getting a product to market and adoption. Even if they have code to show for a product, or actually launch a product, it's not a guarantee of success. There is also a very subtle form of scamming, where the ico projects put on the front of actively working on a product and releasing continuous updates, knowing the product will never pick up momentum.
If you are in the cryptoworld, be very conservative where you put your money.
my current portfolio
AEternity
IOTA
ART
SNGLS
GNT
BNT
ANT
Interesting, most of your choices are platforms built on Ethereum.
What makes you feel that you can pick the winners (essentially stock picking) out of a blooming new field with thousands of new developments as opposed to just picking Ethereum (essentially holding the index)?
Or literally holding an index of the top 20 crypto currencies using C20 - https://crypto20.com
A good overview of C20 with links to YouTube interviews -
https://cryptocurrencyinvesting.news/crypto20-offers-peace-of-mind-with-the-first-crypto-index-fund/
Thanks for the input man. Can you please avoid posting that anymore? I don't know your affiliation but mentioning it twice in such a short amount of time is coming off as self seeking. If not, I apologize but I just wanted to get this out in the clear.
Oh man. This is a millennial train wreck.
You guys are going to lose your asses.
Bitcoin really hitting new highs, currently at 5963.01 dollars per unit, looking for a spot to buy few coins, but the price is too high right now.
Crypto currencies are to investing what a brand new GM truck is to Mustachians.
Isn't this the opposite of what this blog preaches ? Do any of you ever experienced an extended bear market? Where you lost hundreds of thousands in equity value in a matter of months?
If so, do you feel comfortable with things like bitcoin? Yes? How?
I want to hear from the 40+ crowd who have experienced these kinds of events.
Crypto currencies are to investing what a brand new GM truck is to Mustachians.
Isn't this the opposite of what this blog preaches ? Do any of you ever experienced an extended bear market? Where you lost hundreds of thousands in equity value in a matter of months?
If so, do you feel comfortable with things like bitcoin? Yes? How?
I want to hear from the 40+ crowd who have experienced these kinds of events.
Lifeanon269-
Have you purchased a tangible good or service with your bitcoin?
I'd like to know if you've used it for its intended purpose, or if it's only an investment vehicle for you.
All my spending money is in Bitcoin (I've stated this in past posts here as well, so I'm not just saying this in response to you). I'd rather have my spending money in Bitcoin as opposed to USD as this allows me to further increase my savings.
Lifeanon269-
Have you purchased a tangible good or service with your bitcoin?
I'd like to know if you've used it for its intended purpose, or if it's only an investment vehicle for you.
All my spending money is in Bitcoin (I've stated this in past posts here as well, so I'm not just saying this in response to you). I'd rather have my spending money in Bitcoin as opposed to USD as this allows me to further increase my savings. If my spending money goes up 10% one month, then that allows me to put more into savings than I otherwise would have. Its volatility isn't as painful when it comes to my spending money since 1) I don't spend much each month and 2) my monthly spending is spread out over the course of the month, therefore Bitcoin's price volatility evens out for all my expenditures.
In case you're wondering, I have a Bitcoin debit card that allows me to make purchases using Bitcoin. My money is stored in Bitcoin until the time of the transaction where it is converted to USD without any transaction fee. This is what I referred to above where I said that Bitcoin is extremely liquid. I can have my money in Bitcoin and at any moment, I can spend it. I also do make purchases directly with Bitcoin on a few websites that support it (Amazon purchases through Purse, Overstock, NewEgg, etc).
With that said, I would like to question why the question was posed in the first place. Were you questioning its use as a currency? Its current adoption level matches its current merchant acceptance. That is to say it is very low. The reason why it has been such a good investment hinges solely on the fact that it is such a young market. At the point at which we see its value as currency being realized (ie, merchant acceptance and widespread use), its value as an investment will have diminished. Irregardless of any of this, however, its value as a store of value will always remain since that is mostly dependent upon the soundness and stability of the technology itself.
Irregardless of any of this, however, its value as a store of value will always remain since that is mostly dependent upon the soundness and stability of the technology itself.
Crypto currencies are to investing what a brand new GM truck is to Mustachians.
Isn't this the opposite of what this blog preaches ? Do any of you ever experienced an extended bear market? Where you lost hundreds of thousands in equity value in a matter of months?
If so, do you feel comfortable with things like bitcoin? Yes? How?
I want to hear from the 40+ crowd who have experienced these kinds of events.
Can you further explain your analogy? The comparison you make to a GM truck doesn't really make sense at all.
Being "mustachian" is more about living a simple frugal life to achieve a high savings rate and become financially independent than it is about any one particular investment strategy. Even Mr. Money Mustache has invested in high risk/high reward investments.
So I don't think being "mustachian" excludes one from investing in crypto-currencies.
I feel very comfortable investing in bitcoin for numerous reasons.
1) It isn't correlated with any other investment class and it has so far shown itself to be disassociated with most other markets. Therefore it is a good investment option for diversifying against my other index funds.
2) I work in the technology field (Information Security) and I understand the technology of bitcoin deeply. Therefore, investing in a technology that I firmly believe has a bright future makes sense to me. I think it is one of the greatest technological achievements since the Internet. For the first time, we can now create something that is both digital and scarce and can't be copied.
3) I invested in bitcoin early on and therefore my investment has seen tremendous growth over the last several years. Even if bitcoin experiences an extreme drop from today's value or an extensive bear market for the foreseeable future, I will has still made more money had I just invested my money in any other traditional investment option.
4) I am extremely bearish on current traditional financial systems and think that we're in one of the largest debt bubbles ever. Until Bitcoin came along, there was really no way to hedge against something like this as just about ever other asset class is either manipulated and/or intertwined with everything else that makes up our economy. Bitcoin's true value won't be understood until we experience another financial crisis. While I continue to invest in my traditional index funds and max out all my pre-tax investment options, Bitcoin provides me a hedge against those in the event something horrible happens.
5) Bitcoin is extremely liquid and fungible, unlike many retirement investment accounts. This is a great benefit to someone who is planning to retire early, which is something that goes against society's norms. While I plan on retiring in my early 40's, sometimes life can throw a curve ball, so it is nice to have a decent chunk of money that is for retirement, but is available any time of day that can be accessed and used in any way I see fit. There aren't many good investments that I can be long on, while still having the ability to access it at any time without restrictions or penalties.
6) If crypto-currencies are seen as a "millennial" investment, wouldn't it make sense that I invest in something that has a growing number of young investors in the future investing in something that has a positive feedback loop relative to its adoption? If most millennials don't understand why gold is a store of value and yet are fully willing to adopt Bitcoin as such, then it makes sense that Bitcoin would have a stronger future market as those millennials begin choosing where to put their money.
I can go on digging further into why I think Bitcoin is a good investment option, but there are just some of the reasons why I choose to put some of my money in it and why it shouldn't just be seen as some obscure fad.
Irregardless of any of this, however, its value as a store of value will always remain since that is mostly dependent upon the soundness and stability of the technology itself.
It's quotes like this that make me extremely wary of cryptocurrencies. That's simply untrue. The only "value" that cryptocurrencies have as a store of value is completely and totally dependent on other people being willing to trade goods / services / other currencies for them. Same as anything else. The technology can be completely sound and stable, but if no one wants to buy your bitcoin then it has lost every bit of its value. Will that happen any time soon? I don't know, but "bitcoin has no real value so it's real value is potentially INFINITE" type quotes certainly don't make me want to trade my USD for your bitcoin.
Your debit card sounds absolutely amazing! I apologize for being so late to the discussion that I hadn't properly read other posts of yours.
Indeed I am trying to figure out whether Bitcoin is a currency, or if the emphasis on investing through it has transformed it more into a commodity a la gold.
My big concern about websites like overstock is that they still quote the prices in $$ until the very end, then they give you the option to pay via Bitcoin. I'm worried that until we start thinking about prices totally within Bitcoin (and you sound like you've built the infrastructure--personally--to do this), it won't be a currency, but more a medium of exchange will be something more akin to payment processing that credit cards are currently providing, rather than being something like the Euro.
Essentially what you're suggesting is that all the people who today feel that bitcoin is a safe and secure protocol and are willing to put their hard earned cash in it will someday cease to feel it is a safe and secure protocol...and thus its value would plummet. In order for that to happen, then the network would need to experience some type of hiccup or compromise [paraphrasing] or there would have to be a worldwide governmental clamp down.
For perspective, even if Bitcoin's market capitalization remained constant from here on out (about $100 billion), then its future value in the year ~2140 when all 21 million Bitcoins are mined would still be about $4760...
Also, my above statement was in regards to the fact that this is all true whether or not Bitcoin is ever used as an everyday currency or not. Bitcoin does not need to be used as an everyday currency for people to realize that it still has value because of the security it provides as a store of value.
All that's required for people to stop feeling safe and secure is for them to stop feeling safe and secure.
But there's no reason whatsoever to assume that the market cap will remain constant or close to constant. It could skyrocket, it could crash to zero. The one and only factor that differentiates these scenarios is people's willingness to continue pouring money into the bitcoin marketplace. It's all pure speculation on future behavior.
I mean, I know I'm being a downer on cryptocurrencies in a crytpcurrency thread. So by all means you do your thing. I will stick to government-backed currencies and investments backed by real appreciating assets.
All that's required for people to stop feeling safe and secure is for them to stop feeling safe and secure.
I agree, but people don't just change attitudes about things without some type of forcing. You do realize your statement sounds a little ridiculous, right? Why would someone change their opinion about something unless there was something that caused them to have a change of attitude toward it?
Take gold for example. People always argue how gold has "inherent value" given its uses in industry, electronics, medicine, etc. However, has the market cap for gold ever dropped all the way down to its base market value that only covered its uses for industry, electronics, medicine, etc? If the answer to that is no (which it is), then even during all the economic calamities that gold has withstood as a store of value, it still held value simply because people felt it did, not because of its uses or "inherent value".
You say that you'll stick with government backed currencies, but all the same critiques you've leveled against Bitcoin can be said of government backed currencies. Fiat currencies are backed by the government, but all that means is that they back them as legal tender under national borders. That doesn't mean that they guarantee their value.
In other words:
Its the technology that drives its value, not the speculation.
In other words:
Its the technology that drives its value, not the speculation.
Wow, you actually believe this right now?
The exact opposite is true, actually.
I'm for Crypto, and have money in various coins. But you are lying to yourself if you think blockchain cryptocurrencies prices aren't driven by almost pure speculation at this point. The majority of people that own Bitcoin are doing it for a ROI. Period.
And THAT is why this thing COULD come crashing down very fast. It's propped up on speculation, and could crumble, actually much faster, than the housing and tech markets did.
I'm sure I'll be written off as the tired old man here. I'm 49.
Was concerns me the most is that most of the under 35 crowd has only know an EXTREME period of market growth their entire investing lives. Not just extreme but unprecedented!
Twice I've seen my stash grow to unbelievable levels and lose its value in a matter of a year. I've seen friends lose homes, jobs, spouses, etc. over these market crashes .
I suggest you don't speculate a large portion of your net worth. Believe me
I'm sure I'll be written off as the tired old man here. I'm 49.
Was concerns me the most is that most of the under 35 crowd has only know an EXTREME period of market growth their entire investing lives. Not just extreme but unprecedented!
Twice I've seen my stash grow to unbelievable levels and lose its value in a matter of a year. I've seen friends lose homes, jobs, spouses, etc. over these market crashes .
I suggest you don't speculate a large portion of your net worth. Believe me
"All mass appeal technology adoptions follow an S-curve."
All mass appeal technology adoptions involve a drastic reduction in price as the technology is adopted. They would be utter failures otherwise.
If there are a billion people holding bitcoin, but none are buying, the value is nothing - you cannot sell your bitcoin. If there are 1.5 people selling for every 1 person buying, the value crashes precipitously until it gets low enough that an extra half-person decides to buy. Neither of those situations requires a technological problem, merely an economic or psychological problem are sufficient.
If there are a billion people holding bitcoin, but none are buying, the value is nothing - you cannot sell your bitcoin. If there are 1.5 people selling for every 1 person buying, the value crashes precipitously until it gets low enough that an extra half-person decides to buy. Neither of those situations requires a technological problem, merely an economic or psychological problem are sufficient.
Your scenarios are only half of it though. If a billion people own Bitcoin and no one is selling, that means that everyone values the Bitcoin that they own way above what anyone is able to pay for it.
In other words, they'd be priceless.
That would never happen because you're assuming that no one would ever put a price on the Bitcoin they own. Everyone always has a price. Therefore, if a billion people own Bitcoin, there will always be Bitcoin for sale.
Sherr didn't say a billion people owning and no one selling, Sherr said no one buying. That's a crucial difference. You're right that everyone values their bitcoin above what people are willing to pay in that scenario, and that value is (some amount of money -- e.g. 0.01 for lots of bitcoins) and no buyers are willing to pay any amount of money.
"All mass appeal technology adoptions follow an S-curve."
All mass appeal technology adoptions involve a drastic reduction in price as the technology is adopted. They would be utter failures otherwise.
That's true of the technology is a mass-produced good with no scarcity that can achieve production improvements over time. That's not true for a limited scarce asset that achieves critical mass adoption.
The adoption S-curve and the price of said technology are two different functions.
as far as I'm aware, the technology S-curve has historically been marked by an increase in supply that outstrips the increase in demand, hence the reduction in price.
What cryptocurrencies are doing is far closer in terms of supply/demand relationships to historical bubbles, which would indicate that we're better off looking at tulip bulbs and the Irish property market (where ever-increasing demand crashed against limited supply growth and triggered booms in pricing) than the iPod and the printing press (where supply continuously ramped up as demand kept increasing) for an idea of what the crypto market is likely to do.
This isn't a particularly controversial point: the guy who literally wrote the book on economic bubbles (and won a Nobel for it) has specifically argued that cryptocurrencies are in a bubble.
You've even acknowledged that the motivations of investors in the market is principally speculative.
The S-curve has less to do with supply and demand and more simply to do with the adoption of the innovation by the public at large.That just sounds like demand. How can the public adopt an innovation but not buy it? If they really are separate concepts, how do you measure the adoption rate/prevalence without looking at how many good and services are bought?
That just sounds like demand. How can the public adopt an innovation but not buy it? If they really are separate concepts, how do you measure the adoption rate/prevalence without looking at how many good and services are bought?
I agree that the price itself doesn't matter (you can just pay with tiny fractions of a bitcoin if it's worth $1,000,000).
Crypto currencies are to investing what a brand new GM truck is to Mustachians.
Isn't this the opposite of what this blog preaches ? ...
I want to hear from the 40+ crowd who have experienced these kinds of events.
Do any of you ever experienced an extended bear market? Where you lost hundreds of thousands in equity value in a matter of months?
If so, do you feel comfortable with things like bitcoin? Yes? How?
For those with the technical background to understand it
I understand the technology. I think it's probably nothing but a pyramid scheme
There seems to be a recurring dismissal of finance guys who are calling Bitcoin a worthless bubble as "just not getting it". I think they probably do, you don't get to be the CEO of JPMorgan or whatever by being a dummy. I think it's somewhat arrogant to dismiss all criticisms as "well they just don't understand as much as I do" (again, I know you're not doing this).
I understand the technology. I think it's probably nothing but a pyramid scheme
This seems to contradict the idea that you understand the technology of Bitcoin. Either you don't understand Bitcoin or you don't understand what a pyramid scheme is.There seems to be a recurring dismissal of finance guys who are calling Bitcoin a worthless bubble as "just not getting it". I think they probably do, you don't get to be the CEO of JPMorgan or whatever by being a dummy. I think it's somewhat arrogant to dismiss all criticisms as "well they just don't understand as much as I do" (again, I know you're not doing this).
There are plenty of valid criticisms of bitcoin and crypto-currencies that have been discussed throughout this thread (bogus/fraudulent ICOs, harmful regulations, competing currencies, scaling issues, etc). However, when Jamie Dimon, that CEO of JP Morgan Chase that you refer of, is in an interview and is asked a question about ICOs and that is literally the first time he's ever heard of the term ICO, then that makes me question his knowledge on the subject matter of which he is speaking. Therefore, when he makes the claim that Bitcoin is a bubble, I have little faith that he's actually done any analysis to come up with that claim. The same goes for Howard Marks, where as I mentioned before, in his memo that he released to his investors, he actually admitted that he doesn't understand the technology at all.
So I find it hard to agree with you on idea that some of these people that are claiming Bitcoin is a bubble actually have done a detailed analysis as to why they think so. No doubt they are very smart people, but that doesn't make them an expert of all things. They certainly haven't shared their analysis from what I've seen outside of a simple "yup, the price is too high too fast!" In fact, I rarely ever hear an analysis as to why someone thinks Bitcoin is a bubble, all I hear is that another financial person has claimed Bitcoin is a bubble and then it makes a news headline. When that's been going on for several years, it grows increasingly difficult to take them seriously.
I agree that you shouldn't invest any money in crypto-currencies that you aren't prepared to lose. I also think that the amount of money you put into crypto-currencies should be proportional to the amount of understanding you have of the technology. That same advice could be said of just about any investment. For example, I'd advise against putting money into the stock of a company that you have little understand of and don't follow on a daily/hourly basis. I also don't think you should invest in real estate if you don't understand the real estate market in which you're investing.
To clarify, when I say people should have the technical background, I was talking about the technical aspects of the bitcoin asset that make it difficult for the non-technically savvy to even use it safely. For example, it acts like cash or gold in that if it gets stolen or you forget your passwords it is gone. You can't call up someone and get it back.For those with the technical background to understand it
I know that this is not what you're doing, so don't take it personally because I'm not accusing you of anything. I'm just going to piggyback on your comment to say something that's been on my mind.
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Way to demonstrate exactly my point an hour and one minute after I posted.
I could imagine a hypothetical future where cryptocurrency is widely used to settle payments, but the tools for trading in and out of it on both ends are so fast/efficient that the total value of that cryptocurrency only needs to be a few billion to facilitate millions of transactions per day.
As it stands, if you want to pay for something electronically (with a debit card, we'll leave credit cards out of this) you swipe the card, and then the card processor charges the merchant a fee (~3%) in exchange for transferring the money between you and providing some level of fraud prevention/security.
At some point you start to wonder about the point of having the "currency" part of it at all, if you're just transferring dollars to dollars.
I think some of the recent debate brings up a good point. Bitcoin is touted as a currency, hell, coin is part of its name. But, by most definitions of true currency, Bitcoin falls short.
Bitcoin has all the hallmarks of what made gold so valuable before the advent of paper currency.
This is, to put it mildly, an extravagantly dismissive attitude. It's not an exact copy of a pyramid scheme (because if it was, it would be completely illegal), but the characteristics are not too dissimilar. In each case, you're seeing a progressively larger flow of money into a product, fuelled by the gains realised by prior investors, and fuelling a still larger flow of money into the product. There are enough characteristics in common that the comparison isn't unwarranted. It's not as tight a match as with Robert Schiller's description of a bubble, but it's still a reasonable comparison to make.
Why would a blockchain token having a backing tie to some foreign currency be particularly useful? Just use the foreign currency, they are already digital.
The value crypto brings is in how it is disconnected from any government/nation state and from banks. It can't be inflated by some government nor confiscated, nor devalued, etc. If you hold the crypto yourself it won't be loaned out by your bank, nor can it be taken out of your account due to legal demand. Understanding why this is valuable is difficult if you don't have much wealth. If you don't have much wealth you don't worry about protecting it, moving it, or it being locked down or taken away from you.
To get a idea what I mean, consider you held several million worth of crypto. A crypto wallet, including all crypto balances and historical transactions, can be completely encoded by a dozen secret words you can memorize. So now no matter where you go, those dozen words uniquely control your millions, and nobody else can touch it. If you get on a plane and fly to another country, when you land your millions went with you, in your head. You don't have to request a bank to send money to another country, no bank can put a hold on that wealth, no government can confiscate it, and no physical asset had to be shipped. The other people in the plane had to report even small amounts of cash they were traveling with, your millions already exist everywhere on the planet already. No other money or asset in the world has that ability. Crypto is like nothing else.
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The only thing backing means is that the government honors exchanges of coins to their currency at a specific valuation. That provides price stability and intrinsic value.
I could imagine a hypothetical future where cryptocurrency is widely used to settle payments, but the tools for trading in and out of it on both ends are so fast/efficient that the total value of that cryptocurrency only needs to be a few billion to facilitate millions of transactions per day.
Yes, this is sort of where I see it going. As it stands, if you want to pay for something electronically (with a debit card, we'll leave credit cards out of this) you swipe the card, and then the card processor charges the merchant a fee (~3%) in exchange for transferring the money between you and providing some level of fraud prevention/security.
But they *don't* trade your dollars into Visa-Bux and back again to do that. And there's not really a reason that bitcoin/blockchain tech needs to have a "currency" attached to it with *any particular value* in order to facilitate transactions, if both parties just want dollars in the end. All the bitcoin on earth could be worth $500 million and you could use it for exchange that way (dollars instantaneously to bitcoin instantaneously to dollars) or it could be worth $500 quadrillion. Doesn't matter.
At some point you start to wonder about the point of having the "currency" part of it at all, if you're just transferring dollars to dollars.
So while I see the technology being a great thing and possibly a wonderful way to get the vampire squid credit/debit card companies from siphoning 2-3% of the every transaction, I *don't* think that means buying bitcoins (or any other crypto "currency") is a good investment or correlated to the potential of the technology.
What makes Bitcoin more valuable than Dogecoin?
I think I got off track on the intrinsic value piece. The point I was trying to focus on more was the vulnerability of the value and adoption of any one type of coin to be completely overtaken by another newer coin with some extra feature. We could argue about the intrinsic value of non-commodity backed national currency like the US dollar (which is backed by the value of the US economy, although susceptible to inflation/deflation), but that's more of a red herring in this context.
What makes Bitcoin more valuable than Dogecoin?
What makes gold more valuable than silver? People simply value it more. You can argue about gold's industrial uses, but gold was still held in high value long before those industrial uses came along. Personally, I like the look of silver or platinum more in jewelry than gold. Gold is simply valuable because a lot of people place value on it. Because of that value placed on it combined with its scarcity (you can't just go in your back yard and dig some up), it has a lot of value. There are some metals out there that are more scarce, have more industrial function, or even perhaps are better ornamentally, yet gold is still one of the better store of values. Gold historically has no "moat" against other precious metals outside of humans just blindly valuing it for what it is.
The same is true for Bitcoin. There may be better functioning alt-coins out there for specific tasks. There may be better alt-coins out there that are more secure or anonymous. There may be better alt-coins that are technologically or cryptographically better or easier to use. But, they're not better enough to overtake Bitcoin as a store of value. People simply value it more than all other currencies by a lot. Some reasons make sense as to why, some don't. However, unlike gold that is a static element, Bitcoin is not so static. It can be molded through consensus to become what the market needs it to be. There are other alt-coins that are similar enough where specific functionality can be tested within smaller markets to see how they perform and then those very same features can be added to Bitcoin if needed. Bitcoin's market lead along with the fact that new features can and likely will be added will keep Bitcoin as the #1 currency for the foreseeable future.
A new crypto-currency popping up out of the blue is no more of a threat to Bitcoin's value than a new metal being discovered is a threat to gold's value as a precious metal. That's not to say I wouldn't keep a close eye on the market over the next several years to see what's going on in the industry to see what new technology is out there. Anything is possible and if you're just blindly stashing away Bitcoin and turning your back on it, there is always a chance you'll get burned. But, I don't see the threat of other alt-coins as a reason to avoid Bitcoin altogether. I'd merely view other currencies as lively experimentation is a burgeoning new industry; definitely something to keep an eye on.
I'm not sure I agree with a lot of these points. There are some very specific reasons why gold is more valuable than silver. Two big ones are that 1) gold is more rare, and 2) it's chemically inert (whereas silver tarnishes for example). In fact, gold is extremely unique in its combination of softness and chemical stability. So right off the bat we have two good predictors on value: rarity and practicality. That does seem to make sense to me.
Bitcoin certainly gets to claim rarity on the grounds that it has a finite supply, but then so does any other crypto coin, so I'm honestly not sure how to factor that in. As for practicality, again it's hard to measure how Bitcoin directly compares to other coins as the comparison may be use-case dependent. But, you do see effects like Etherium (which maybe should be called Bitcoin-v2) coming out of nowhere and claiming a significant market share due to perceived practicality improvements.
And that's the thing. You mention that Bitcoin is not so static, but I look at it and see it as being very static. A coin is a token that can be anonymously exchanged with a way to verify the exchange. There are going to be a fixed number of coins, and that's that. I don't get this idea of it 'becoming what the market needs it to be'. They are what they are, and that's a secure distributed system for the validated exchange of tokens. But, anyone can pretty much on a whim fork/clone the code and create their own parallel system decoupled from the valuation of any other system.
And yes, I agree that most of Bitcoin's value is due to it being first-to-market, but if that's the main reason it's worth over 1,000 times more than equivalent (or even functionally superior) alt-coins, I don't see how that represents a stable system over a significant number of years. If at any single point in the near or distant future Bitcoin starts to lose market share to an emerging new technology, there will be nothing to stop its value from plummeting due to this feedback loop of its value being tied to its market share. If everyone's jumping to Super-coin and Bitcoin's market share starts dropping, who's going to be sitting there willing to buy Bitcoins at their current price when the value of Super-coin is exploding and there's possible reason to thing that Bitcoin will be come a completely outdated dominated implementation of the next big crypto-currency? If consumer confidence starts declining, the value of a Bitcoin could evaporate in a cloud of smoke as hoarders make a 'run on the bank' and try and offload their inventory in exchange for The Next Big Thing.
"Either you don't understand Bitcoin or you don't understand what a pyramid scheme is."
This is, to put it mildly, an extravagantly dismissive attitude. It's not an exact copy of a pyramid scheme (because if it was, it would be completely illegal), but the characteristics are not too dissimilar. In each case, you're seeing a progressively larger flow of money into a product, fuelled by the gains realised by prior investors, and fuelling a still larger flow of money into the product. There are enough characteristics in common that the comparison isn't unwarranted. It's not as tight a match as with Robert Schiller's description of a bubble, but it's still a reasonable comparison to make.
Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.
-W
Does anyone have further advice?
Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.
-W
is a 24/7 global, secure, cheap, fast, censorship-resistant payment network not producing value? are visa, paypal, and western union valueless as well?
Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.
Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.
i don't know how Ethereum's PoS will work but i imagine it would have to somehow involve spending money on electricity and computer hardware to process transactions and store the blockchain -- therefore a nonzero input to keep generating value via the payment network.
MystryBox, a good set of advice. I'm not sure about #3 on the what-not-to-do list just because I think assumed anonymous nature of cryptocurrencies was one of the things that got people really excited about bitcoin in the early days (before people realized how straightforward it would often be to link an anonymous "wallet" to a particular person). So I still think the anonymous cryptocurrencies are likely candidates if there ever is a significant switch from bitcoin to something else.
That said, even if I'm right about that, you certainly raise a very valid point about the difficulty of getting money back out of crypto without looking like a potential drug dealer if you've got a lot of money sitting in monero or zcash (or whichever other anonymous coins are out there).
I'm torn, I think the 2X fork is wreckless and poorly executed because it doesn't have replay protection, but I wouldn't mind seeing some hashrate go to another chain to allow BTCs difficulty to go down or at the very least hold steady for a while.
How do you manage your Crypto-Currency Portfolios?
On the basis of market capatilization I'm planning to invest in the top 5 crypto currencies and to rebalance every month.
Like a typical passiv index fonds. What is a cheap and simple way to do this?
PS. I haven't read every post in this threat, only the first pages and couldn't find an answer.
The 2X/1X fork is being executed this way on purpose by both sides. The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand. Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding. So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.
To me the whole thing is risking the value (and lead coin status) of BTC. Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded). No matter how it goes I think it's another nail in the coffin of bitcoin maximalism. The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities. Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).
I've been observing the space before my mmm account age. It's highly political. Both sides are not without blemish and information distortion. However, I believe core is the greater evil.
We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.
We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.
Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?
Sounds sort of a like... government.
-W
Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?
Sounds sort of a like... government.
-W
The fact that Bitcoin is counterfeit proof gives it a leg up on the rest of the economy. At least the Bitcoin I own I know are real and legitimate Bitcoin.
That being said, I'd imagine that once derivatives trading starts becoming more popular with Bitcoin, then those derivatives would likely be vulnerable to the same counterfeiting which is why it is always good advice to just invest and hold directly in Bitcoin and not in any derivative markets.
Too bad core, who you seem to love, is busy killing the original design of bitcoin and turning it into a settlement system that they will then use to power higher level derivative networks like sidechains and lightning. I had a big argument with nullc (Greg Maxwell) a few years back about how they were moving away from the "digital property" breakthrough that bitcoin achieved to create a bunch of derivatives on top of bitcoin which would start right down the same road of the mainstream financial system. He didn't care, he's never cared about those aspects of bitcoin.
Their entire refusal to increase the blocksize is not what they claim, it is to obsolete the old bitcoin model and force any new usage into newer derivative technologies (which they of course profit from). So why bother posting about how great those attributes of bitcoin are when you are cheering the group that is killing those attributes?
First off, if you look through this thread and others on this forum, you'll see I am a big advocate of Bitcoin and its capabilities. I'm a firm believer in all that Bitcoin stands for...decentralization, cryptography, open source, consensus, deflationary, etc.
I do support increasing the block size, just not right now...
Third, increasing the block size is not a scaling solution ... Bitcoin as it is designed will never be capable of processing transactions at the same rate that VISA is capable of.
Fourth, that doesn't even touch on the fact that in order for the network to be able to support transaction rates that high, the network would end up being much more centralized. Which out of all properties for Bitcoin, its decentralized nature is probably one of the most important to have come from Satoshi's original whitepaper.
Also, sidechains are completely opt-in. No one is forced to use them... the Lightning Network is still backed by the same verifiable and counterfeit proof Bitcoin blockchain
sidechains ... allow Bitcoin to be much more responsive to what the market needs it to be.
If you want to have a debate with me, go ahead and do so. I'm capable of having a debate based on information without the need to be antagonistic or aggressive.
you are certainly an awesome advocate and you know your stuff. i am debating with myself whether or not to reply to your individual points -- but what the hell. this isn't r/bitcoin -- so we can have a debate! in fact, the exact same debate that's been had zillions of times since blocks have been full.
blocks have been full for a while -- it should have never even got close to this point. the block size limit should have been doubled to 2MB years ago, and probably doubled again at least once more by now. even if monetizing sidechains or the lightning network is the surreptitious goal, you need to raise the block size for it all to work.
VISA levels of tx/sec is a straw man argument. no one is trying to get that to work at this point. 2MB-8MB blocks are more than enough for the next few years.
the original unmodified white paper mentions that "server farms" would be nodes, not individual users. most folks don't run their own email server or web server, yet the internet remains decentralized.
also, the lightning network by design relies on centralization. if you're concerned the peer-to-peer qualities of bitcoin are at risk then you should be against the current lightning network proposals.
sidechains are not opt-in if the block size is 1MB and you're in a bidding war to even get your tx in a block.
the lightning network destroys the original alignment of incentives that give us the incredible security of the today's bitcoin mining network. if fewer people can make on-chain transactions, and the block reward has been halved a few times, why would the miners even mine any longer?
so do hard forks. any feature could be added to bitcoin. bitcoin's supposed to be a honey badger, not a deer in the headlights. increasing the block size limit to 2MB-8MB by the way isn't a "feature" -- it's a much simpler change than that: it allows bitcoin to perform the same way it's performed since 2009.
i think we're all on the same page with that here. agreed.
The mempool was completely empty this week, so that would go against the argument that the current blocksize is not sufficient to handle the current transaction rate demanded of the network.
If Bitcoin is to truly be a competitor to that, then it needs to scale way beyond just 60 tx/sec. That's especially true if the adoption rate kicks into high gear and becomes exponential again like it did this year. You talk about how the blocksize should been increased long ago. That can certainly be argued, but how can that be argued now and at the same time not argue for looking further down the road again and see the writing on the wall that Bitcoin might not be up to the task of handling transactions should adoption exponentially increase yet again.
Quotethe original unmodified white paper mentions that "server farms" would be nodes, not individual users. most folks don't run their own email server or web server, yet the internet remains decentralized.
There is a difference between trust-based centralization and trust-less centralization. ... The Lightning Network can (and likely will) lead to centralized "credit union" style hubs, but like I said, the Lightning Network is completely opt-in.
In one argument you're talking about blocks being completely full which would force users into sidechains. Then in the next argument you're talking about blocks being empty which would cause miners to stop mining. Which is it? You can't argue both.
I am advocating against the SegWit2X hardfork that is planned for November since it has been poorly planned, it's timing doesn't give SegWit a chance, it fails to implement replay protection, and doesn't have community support behind it.
you can't cherry pick data to fit your argument. blocks had been getting closer to being full for years, and now they have been full for some time: https://blockchain.info/charts/avg-block-size?timespan=all&daysAverageString=7
it seems silly to have to say this but doubling the block size as needed and working on sidechains and lightning network are not mutually exclusive. it's pretty simple: if most of the network agrees that blocks are full, then double the block size limit if current technology can handle it. if the block size can't be doubled for technical reasons, then yes unveil the next iteration of whatever sidechain solution you have.
again i think the VISA argument is arbitrary straw man but just to clarify -- in your scenario on the order of 10-100s of tx/sec are on-chain with "trust-less centralization" and on the order of 10,000s tx/sec are off-chain on lightning network hubs with "trust-based" centralization -- and that's ok? where only a few percent of users can use bitcoin in a trustless manner?
nope, in my argument the tiny blocks are full as you say with lightning channel opening/closing tx, and the block reward is trending to zero. difficulty however is not trending to zero, so miners are now mining at a loss because they're not capturing fees for the bulk of transactions, which are off-chain. somewhere before this scenario occurs the miners and users will simply migrate to a chain with larger blocks so they can capture more tx fees.
the fork has had >80% support since mid-june. https://coin.dance/blocks/proposals
if segwit can't compete with 2MB blocks then perhaps the time isn't right for more intricate solutions, see my point above. if bitcoin will exist for years there will be plenty of time to introduce these new wrinkles. the conservative solution is simply increasing the block size now (by "now" i mean after segwit -- the really conservative solution would have been just 2MB) and in the meantime yes, by all means, continuing to work on all manner of "down the road" scaling solutions.
I'm not sure where you're getting your information from and how you're evaluating it. Most of your statements, like above, are inaccurate.
Segwit did not have the support it needed for adoption until the majority of the business and mining community got together and signed the New York agreement to first upgrade the protocol to segwit and then later to 2mb. This was the only way segwit passed.
https://medium.com/@DCGco/bitcoin-scaling-agreement-at-consensus-2017-133521fe9a77
why are futures so worrying to you?
Sure, the futures contract for a given forward month may have a huge number of open contracts or a small number. There will be a self correcting effect if to many contracts are out there and traders are nervous about getting BTC to cover them, they simply buy/sell as appropriate to close the contracts. Most commodity contracts are closed out like this prior to delivery.
Derivatives are dangerous for the institution issuing them if a counter party cannot pay and they end up with a very very highly leveraged position on a security. This is neither good nor bad for the underlying security. When derivatives trigger indexes to be bought and sold, this creates volume that stock following computers pick up on and amplify. But, since the Merc future is the only place those kind of guys can trade, how can they wreck the underlying?
This all may be hyperbole and have no effect if the BTC future is USD settled off an index. If that's the case, institutions may not really trade the futures since they cannot hold underlying to offset positions.
IF they pass the law proposal that you can spend like $600 a transaction tax free, I might use it to pay my household bills or buy more mining hardware.
So what's the use case of buying or selling a bitcoin future rather than a bitcoin itself? The hedging purposes of futures make sense to me for things that are constantly being produced and where industrial buyers know they will need to purchase fixed amounts at regular timepoints (like oil or porkbellies), but I still cannot wrap my head around this for cytocurrencies.
Are they significant futures markets for euros or RMB? If so, what do people use them for?
The two main areas I know of.
1. Leverage... You can buy A LOT of bets for (call) or against (put) which sell in lots of 100 for very cheap. Most of the cost is time value... So if BTC moves $1 in an hour (very possible) you can make $100 with a relatively small investment. I am not sure what the premium is going to be since BTC itself is so scarce, but my guess is it will be fractionalized up the a**.
2. Gets around rules to allow trading on the main exchanges "pretend BTC" which is really cash based and has no real conneciton with reality without being an accredited investor so everyone can buy in.
This may either propel BTC to stupid crazy high prices fast because of the hype or stabalize the price... I am not sure which way it will go.
Bitconnect is a ponzi.
LMFAO, please watch this. https://www.youtube.com/watch?v=kbR1SXIje1U
The Segwit2X hardfork has been suspended this month. Bitcoin rallies! There was much rejoicing! I'm happy there will not be a split in the community.
i don't think we're out of the woods quite yet. we'll see if some group of miners goes forward with the 2x fork, we'll see what happens with the new BCH DAA, and the BTC mempool is getting huge.
things are even crazier than normal in the bitcoin world with BTC crashing and BCH going vertical (for the time being). from a bitcoin portfolios perspective i still think the safest option is to do nothing (don't buy or sell any bitcoin on any fork) and wait (weeks/months) for some sort of resolution. it seems too easy to me to publish a statement saying "2x is canceled" in an attempt to manipulate the market, miners are free to hop from chain to chain, exchanges still have to react to the 2x cancellation, etc.
the segwit2x fork bug is a good example of why we need miners and nodes to run bitcoin implementations published by multiple development teams. i believe some miners use their own bitcoin implementations, but this would have definitely broken many nodes and miners, shaken confidence, and probably caused a price crash.
sorry but core is plainly the opposite of conservative -- to support their business model they changed and added thousands of lines of new code rather than changing a single line of code for max block size. as a result bitcoin fees skyrocketed this week in the frenzy after the 2x cancellation... and the mempool is still at 90MB with tens of thousands of unconfirmed transactions.
Regarding fees, first off, one of the biggest factors in rising fees for bitcoin is simply due to the fact that the price of a single bitcoin has risen astronomically over the last 2 years. Rather than focusing on the fee paid in USD for any given transaction, it should be the fee rate that should be of primary concentration. When you look at fee rates on Bitcoin Cash, the median fee rate is somewhere around 60-70 satoshis/byte. That results in a fee of about 18 cents on the Bitcoin Cash network for a transaction of average size. That same fee rate would result in a fee of $1.15 if the price of Bitcoin Cash were equivalent to the price of Bitcoin today (~$7700). Now, the median fee rate on the bitcoin network today is around 90 satoshis/byte. With an average transaction size of about 230 bytes, this results in your median fee being around $1.60 on the bitcoin network. That's not too far from what the Bitcoin Cash network would look like now if its price were the same as Bitcoin's.
Regarding fees, first off, one of the biggest factors in rising fees for bitcoin is simply due to the fact that the price of a single bitcoin has risen astronomically over the last 2 years. Rather than focusing on the fee paid in USD for any given transaction, it should be the fee rate that should be of primary concentration. When you look at fee rates on Bitcoin Cash, the median fee rate is somewhere around 60-70 satoshis/byte. That results in a fee of about 18 cents on the Bitcoin Cash network for a transaction of average size. That same fee rate would result in a fee of $1.15 if the price of Bitcoin Cash were equivalent to the price of Bitcoin today (~$7700). Now, the median fee rate on the bitcoin network today is around 90 satoshis/byte. With an average transaction size of about 230 bytes, this results in your median fee being around $1.60 on the bitcoin network. That's not too far from what the Bitcoin Cash network would look like now if its price were the same as Bitcoin's.
Could you tell me a bit more about why you'd expect transaction fees priced in satoshis to stay constant as the price of the currency (in dollars/RMB/euros) increases?
Here's why I'm having trouble with that assumption: Transaction fees should be driven by supply and demand. Since the block size is currently fixed for both currencies, we can put aside the supply side entirely (technically I believe this is called having completely inelastic supply). If the price of the currency doubles but people are buying and selling the same goods (from cups of coffee to drug deals to purchases on overstock.com) for the same prices in USD, wouldn't you expect demand curve for bitcoin transactions to stay the same? For example, if I'm willing to buy a $5 cup of coffee with bitcoins if I have to up to but no more than $0.50 in transaction fees when the price of bitcoin was $3,500/bitcoin, I don't think it necessarily true that if the price of bitcoin doubles to $7,000 that I'm now willing to pay up to $1.00 in transaction fees to buy the same $5 cup of coffee.
What I suspect is actually happening is that as the price of conventional bitcoin continues to increase, it draws in more total people (whether they're using the currency as intended or buying in the hopes that the the price continues to increase), which creates more transactions trying to be confirmed, raising the minimum price people have to pay to ensure their transactions get included in a block. This still means that as prices (in USD/RMB/EURO) go up, transaction fees (USD/RMB/EURO) go up, but if I'm right then there is indeed a positive correlation between increasing cryptocurrency price and increasing transaction fees, however there is no reason to think the two increases are linked at a 1:1 rate. If bitcoin doubles in price it might bring in 50% more people (4:3), if bitcoin doubles in price it might bring in twice as many new people as are in the current user community (2:3).* But that 1:1 link is what you'd need for transaction fees to stay constant in terms of satoshis/byte.
*Technically it's not the number of people, it's the number of transactions. A single new user who is going to make 30 bitcoin transactions a month is going to increase the demand curve for bitcoin transactions more than twenty new users who are going to make 1 transaction a month each.
No, thanks that's a set of interesting thoughts.
I completely agree with you that relatively small transactions are going to be the first ones to be priced out of inclusion in blocks when demand for bitcoin (or bitcoin cash) transactions exceeds supply. The reason I focused on something like buying coffee is that these smaller commercial transactions also tend to be the marginal transactions which are more sensitive to transaction fees, and hence they play an outsized role in determining what the transaction fees actually end up looking like for everyone.
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One thing to keep in mind is that transaction fees are only a relatively small part of the revenue miners get from adding to the blockchain at the moment. Right now the block reward is still 12.5 bitcoins (~$100,000). The average transaction fees per block are only 2.2 bitcoins (~$17,000). Even if there was some empty space in some blocks, I think there will always be lots of microtransactions or dust transactions which would be happy to pay lower but greater than zero fees to be included in the blockchain. However you won't see these in the mempool because people know they'd never get confirmed and so don't even bother to try to get them to go through.
To say that they were the opposite of conservative simply because the number of lines of code involved is a misunderstanding of a proper development lifecycle.
Regarding fees, first off, one of the biggest factors in rising fees for bitcoin is simply due to the fact that the price of a single bitcoin has risen astronomically over the last 2 years.
Rather than focusing on the fee paid in USD for any given transaction, it should be the fee rate that should be of primary concentration.
When you look at fee rates on Bitcoin Cash, the median fee rate is somewhere around 60-70 satoshis/byte. That results in a fee of about 18 cents on the Bitcoin Cash network for a transaction of average size.
That same fee rate would result in a fee of $1.15 if the price of Bitcoin Cash were equivalent to the price of Bitcoin today (~$7700). Now, the median fee rate on the bitcoin network today is around 90 satoshis/byte. With an average transaction size of about 230 bytes, this results in your median fee being around $1.60 on the bitcoin network. That's not too far from what the Bitcoin Cash network would look like now if its price were the same as Bitcoin's.
The percentage of SegWit transactions is only around 10-11%. This means that there is still potential to decrease these fees by not only freeing up block weight space for additional transactions and thus decreasing competition in the fee market (lowering the fee rate), but also by decreasing the average size of a transaction using SegWit enabled wallets/addresses.
But where does bitcoin cash go with an increasing load? Competition for block space is already low due to the low transaction volume and large block size. Therefore there isn't much capability for bitcoin cash to decrease the actual fee rate paid and fee of transactions in USD from where they are today. If bitcoin cash were to see the same load of the bitcoin network then that would mean the only option to keep the fee rate the same as it is today would be to increase the block size yet again.
If increasing the block size only allows you to maintain the fee rate that we have today, that means that if the price of bitcoin cash were to increase dramatically, then we'd be in the same position with high fees (in USD) while at the same time decreasing centralization immensely.
Finally, as far as unconfirmed transactions go, there was clearly a transaction spam campaign that occurred after the fork cancellation due to the enormous number of transactions that were broadcast that all had fees of 10 satoshis/byte or lower. This was a very anomalous event.
I hope this clears up some information as I feel like there is a lot of misinformation out there on fees, scaling, etc with regards to the bitcoin network.
I wasn't trying to imply that the increase in the price of bitcoin is the sole reason why transaction fees have drastically risen over the last year (as priced in USD), but I do feel that it is the largest driver thus far given the fact that the price in bitcoin has increased at a much faster rate than the total number of transactions has.
In the instance of bitcoin cash, since block size is essentially being used as the sole means of scalability, this means that the fee market is a delicate balance between ensuring that the mempool isn't always empty and that the blocks aren't always full.
Rereading your original response I see that you're comment was mainly in regards to the recent run up in fees and transactions related to the fork event. Like I said, this was highly anomalous. Taking out events such as the forks in August and November and things look much different with transactions in the 10-20 satoshi/byte range routinely getting processed each day.
So how would full blocks at 8MB be any different than full blocks at 1MB with regards to the fee market?
Once you increase the block size, you can't go backward. So it is absolutely critical that if it is chosen to go forward with such a decision, it is done when it is absolutely necessary and right to do so.
the size of the spike is anomalous... but spikes in the mempool si