Author Topic: What do you think of adding a low% of crypto allocation  (Read 31357 times)

Malcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #300 on: October 25, 2021, 12:21:55 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

Yeah, no personal attack, B42 just holds a very strong opinion, like he does about basically everything.

Agree or disagree with him, that's fine. You can think his opinion is totally ridiculous if you want, and you are totally free to call him out on it, people often do when he gets dogmatic about things. But that wouldn't be considered a personal attack, just as his post singling out what one person has said also isn't a personal attack.

He's heavily criticized ideas, which is entirely fair play. People are totally entitled to criticize his ideas in return, but instead the rebuttals seem to be getting personal, which is kind of ironic.

I say this as someone who is not pro or anti crypto. I have no skin in this game, but what I do observe are reactive, sarcastic, defensive comments from one side more than the other.

That may be just a product of this forum being predominantly anti-crypto, so the crypto folks feel frustrated here. I don't know.

But as someone who is avidly reading along and trying to better understand the two sides and where the truth lies between them, I can say that B42 has been extremely effective in articulating their side of the debate and I keep wishing that someone on the pro-crypto side would really articulately pick apart his arguments in a way that really made sense to me.

However, perhaps this is not the forum to find that.

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #301 on: October 25, 2021, 12:25:28 PM »
Sometimes I think of BTC (and crypto in general) like this:
1. No, won't be currency. Not broadly, not really really.
2. Will have some value over time but current price is probably above that value
3. Probably won't be stable in price but if it does, will take a long time to get there
4. Might end up having store-of-value utility even if prices are unstable

And:
5. Yes, is in a speculative bubble
6. Might be nowhere near the end of the speculative bubble
7. The limit on price might be social, not logical
8. A fair approximation of the upper price limit might be things like:
a. How many dollars are people willing to "invest" (store) in risk assets, minus the valuation of the stock market, during an optimistic period
b. When nearly all, not just some, of markets' speculative energy is in BTC
c. When speculative valuation on crypto is higher than the total value of the stock market
d. When valuation of crypto is larger than the stock market
e. (Some of these overlap) When total valuation of risk "assets" (say, stocks + crypto) is much higher than stocks alone have ever been.

8c, 8d, and 8e may well put the global financial system at risk of a BTC-triggered meltdown. So in a way, I'm rooting for a BTC crash before they happen.

It's hard to measure the items in 8, but my guess that if these thoughts are true, the upper limit on BTC is far higher than today. Like BTC at US$250,000 or $500,000. Maybe $1 million.

There's a part of me that then says "Well, then it's not too late to buy. Take the ride!" Haven't done it though.

Re the thread topic, if the upper limit of valuation is far higher than today, a small % crypto could have a big positive impact on returns - if you can get yourself out before the Last Big Crash. Sometimes I think the way to go is reset rarely, like maybe once a year instead of once a quarter, and set some share-of-risk-market boundaries for when to sell.

The majority of people here supporting this are of the get rich quicker mindset.

Even in a forum with a simple equation for wealth accumulation you have people believing in this thing.

Take rosy for example. Hit a 6 figure number years ahead of schedule. Not by following the logic. But bc they bought a lottery ticket. Built in belief. Not a single person in any crypto thread has articulated it's value.  Other than it goes up. So I don't want to miss it. Austin take rosy. Proclaiming it's value as a currency and yet doesn't understand modern economics or admittedly how currency functions

I'm all about using inventive ways to get richer faster to shorten the timeline. Anyone can look at my history of posts and journals here to see that. But at some point you have to know when to fold em.  And these staunch advocates of a meer collectible can't see past their own greed.

Resentment is not a good look on you.

Rather than resentment, I read a deep philosophical theme here:

If we support the lifestyle of the FIRE movement, do we have a moral obligation to use our voices to speak toward replicable methods of achieving it over time. Because the traditional stock market, index fund route seems replicable over time (roughly a century of data), we feel comfortable growing our movement through investing using this method. And--because of the relatively short time frame and high volatility--we are much less secure in enouraging others to use crypto positions to reach FIRE.

I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

If philosophy is what you're looking for, consider:
The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.
Bertrand Russell

Agreed.  The MMM audience, including myself, tends to be well-informed but rigid in their collective financial views.  We are predisposed to think the best way to obtain FIRE is to earn alot, live below our means, and invest heavily into traditional markets (S&P 500, REITS, Bonds, ect.).  Some people take this "best approach", which unites us, to the extremes and act as though it is the only approach.

Unevitably, when a Mustachian asks about crypto it instantly becomes controversial because some Mustachians explain why they believe it's not a bad idea to invest a small portion of their portfolio into it and other Mustachians attack them for trying to find shortcuts to the long, hard, but well-deserved journey to FIRE.  If you don't see the appeal to crypto that's fine, there is much more that unites us here.  However, you are being insulting when you personally target another Mustachian and dismiss their well-thought out strategy as a get rich quick scheme.  It is mean-spirited and intellectually dishonest.

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #302 on: October 25, 2021, 12:26:05 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

Yeah, no personal attack, B42 just holds a very strong opinion, like he does about basically everything.

Agree or disagree with him, that's fine. You can think his opinion is totally ridiculous if you want, and you are totally free to call him out on it, people often do when he gets dogmatic about things. But that wouldn't be considered a personal attack, just as his post singling out what one person has said also isn't a personal attack.

He's heavily criticized ideas, which is entirely fair play. People are totally entitled to criticize his ideas in return, but instead the rebuttals seem to be getting personal, which is kind of ironic.

I say this as someone who is not pro or anti crypto. I have no skin in this game, but what I do observe are reactive, sarcastic, defensive comments from one side more than the other.

That may be just a product of this forum being predominantly anti-crypto, so the crypto folks feel frustrated here. I don't know.

But as someone who is avidly reading along and trying to better understand the two sides and where the truth lies between them, I can say that B42 has been extremely effective in articulating their side of the debate and I keep wishing that someone on the pro-crypto side would really articulately pick apart his arguments in a way that really made sense to me.

However, perhaps this is not the forum to find that.

I'm waiting for that too - I'll get on any gravy train that i think has real long term traction.  I think i've proven that here -

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #303 on: October 25, 2021, 12:52:46 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

Yeah, no personal attack, B42 just holds a very strong opinion, like he does about basically everything.

Agree or disagree with him, that's fine. You can think his opinion is totally ridiculous if you want, and you are totally free to call him out on it, people often do when he gets dogmatic about things. But that wouldn't be considered a personal attack, just as his post singling out what one person has said also isn't a personal attack.

He's heavily criticized ideas, which is entirely fair play. People are totally entitled to criticize his ideas in return, but instead the rebuttals seem to be getting personal, which is kind of ironic.

I say this as someone who is not pro or anti crypto. I have no skin in this game, but what I do observe are reactive, sarcastic, defensive comments from one side more than the other.

That may be just a product of this forum being predominantly anti-crypto, so the crypto folks feel frustrated here. I don't know.

But as someone who is avidly reading along and trying to better understand the two sides and where the truth lies between them, I can say that B42 has been extremely effective in articulating their side of the debate and I keep wishing that someone on the pro-crypto side would really articulately pick apart his arguments in a way that really made sense to me.

However, perhaps this is not the forum to find that.

I'm waiting for that too - I'll get on any gravy train that i think has real long term traction.  I think i've proven that here -

These things have been discussed ad nauseum here.  I am not going to dig it up but there was another thread from earlier in the year where you guitar, and Telecaster dismissed all the arguements for crypto.  Crypto has its pros and cons.  If your sound judgment tells you not to put a little skin in the game then it's best to just stay on the sidelines.

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #304 on: October 25, 2021, 12:58:37 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

Yeah, no personal attack, B42 just holds a very strong opinion, like he does about basically everything.

Agree or disagree with him, that's fine. You can think his opinion is totally ridiculous if you want, and you are totally free to call him out on it, people often do when he gets dogmatic about things. But that wouldn't be considered a personal attack, just as his post singling out what one person has said also isn't a personal attack.

He's heavily criticized ideas, which is entirely fair play. People are totally entitled to criticize his ideas in return, but instead the rebuttals seem to be getting personal, which is kind of ironic.

I say this as someone who is not pro or anti crypto. I have no skin in this game, but what I do observe are reactive, sarcastic, defensive comments from one side more than the other.

That may be just a product of this forum being predominantly anti-crypto, so the crypto folks feel frustrated here. I don't know.

But as someone who is avidly reading along and trying to better understand the two sides and where the truth lies between them, I can say that B42 has been extremely effective in articulating their side of the debate and I keep wishing that someone on the pro-crypto side would really articulately pick apart his arguments in a way that really made sense to me.

However, perhaps this is not the forum to find that.

I'm waiting for that too - I'll get on any gravy train that i think has real long term traction.  I think i've proven that here -

These things have been discussed ad nauseum here. I am not going to dig it up but there was another thread from earlier in the year where you guitar, and Telecaster dismissed all the arguements for crypto.  Crypto has its pros and cons.  If your sound judgment tells you not to put a little skin in the game then it's best to just stay on the sidelines.

The arguments for crypto haven't been dismissed . . . they've been debated and found wanting (repeatedly, and on many fronts).

Malcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #305 on: October 25, 2021, 01:02:53 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

Yeah, no personal attack, B42 just holds a very strong opinion, like he does about basically everything.

Agree or disagree with him, that's fine. You can think his opinion is totally ridiculous if you want, and you are totally free to call him out on it, people often do when he gets dogmatic about things. But that wouldn't be considered a personal attack, just as his post singling out what one person has said also isn't a personal attack.

He's heavily criticized ideas, which is entirely fair play. People are totally entitled to criticize his ideas in return, but instead the rebuttals seem to be getting personal, which is kind of ironic.

I say this as someone who is not pro or anti crypto. I have no skin in this game, but what I do observe are reactive, sarcastic, defensive comments from one side more than the other.

That may be just a product of this forum being predominantly anti-crypto, so the crypto folks feel frustrated here. I don't know.

But as someone who is avidly reading along and trying to better understand the two sides and where the truth lies between them, I can say that B42 has been extremely effective in articulating their side of the debate and I keep wishing that someone on the pro-crypto side would really articulately pick apart his arguments in a way that really made sense to me.

However, perhaps this is not the forum to find that.

I'm waiting for that too - I'll get on any gravy train that i think has real long term traction.  I think i've proven that here -

These things have been discussed ad nauseum here.  I am not going to dig it up but there was another thread from earlier in the year where you guitar, and Telecaster dismissed all the arguements for crypto.  Crypto has its pros and cons.  If your sound judgment tells you not to put a little skin in the game then it's best to just stay on the sidelines.

That's not fair at all.

I am actively looking to understand crypto, I've been reading a bunch on it and feel like no matter how much I read, I can't make sense between the two sides.

I very much appreciate seeing arguments from both sides, and have no issue with someone staunchly arguing their point.

There are A LOT of us out there who want to better understand *both* sides.

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #306 on: October 25, 2021, 01:18:18 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

Yeah, no personal attack, B42 just holds a very strong opinion, like he does about basically everything.

Agree or disagree with him, that's fine. You can think his opinion is totally ridiculous if you want, and you are totally free to call him out on it, people often do when he gets dogmatic about things. But that wouldn't be considered a personal attack, just as his post singling out what one person has said also isn't a personal attack.

He's heavily criticized ideas, which is entirely fair play. People are totally entitled to criticize his ideas in return, but instead the rebuttals seem to be getting personal, which is kind of ironic.

I say this as someone who is not pro or anti crypto. I have no skin in this game, but what I do observe are reactive, sarcastic, defensive comments from one side more than the other.

That may be just a product of this forum being predominantly anti-crypto, so the crypto folks feel frustrated here. I don't know.

But as someone who is avidly reading along and trying to better understand the two sides and where the truth lies between them, I can say that B42 has been extremely effective in articulating their side of the debate and I keep wishing that someone on the pro-crypto side would really articulately pick apart his arguments in a way that really made sense to me.

However, perhaps this is not the forum to find that.

I'm waiting for that too - I'll get on any gravy train that i think has real long term traction.  I think i've proven that here -

These things have been discussed ad nauseum here.  I am not going to dig it up but there was another thread from earlier in the year where you guitar, and Telecaster dismissed all the arguements for crypto.  Crypto has its pros and cons.  If your sound judgment tells you not to put a little skin in the game then it's best to just stay on the sidelines.

That's not fair at all.

I am actively looking to understand crypto, I've been reading a bunch on it and feel like no matter how much I read, I can't make sense between the two sides.

I very much appreciate seeing arguments from both sides, and have no issue with someone staunchly arguing their point.

There are A LOT of us out there who want to better understand *both* sides.

What do you want to want to know? 

Malcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #307 on: October 25, 2021, 01:42:35 PM »
What do you want to want to know?

The same thing I've been asking since the beginning of this thread: where does the truth lie between the two sides that tend to be quite extremely opposed?

What I find frustrating is that most pro crypto people argue as if it's just a given that crypto is the best thing ever, and that those who question it are just clueless, ignorant idiots.

This stance is hard to grasp since so many of the arguments from those against crypto sound quite informed and reasonable.

It's frustrating to read.

It doesn't help that I know a few people in the crypto tech world who don't invest in crypto coins themselves and even more who mount a lot of similar arguments as I see here against investing in hugely valued coins like Bitcoin.

I've got one "expert" saying Etherium is the only coin that makes sense to invest in, and yet another saying that despite some hiccups that EOS remains the "Etherium killer", and yet more saying that it's premature to heavily invest in any individual coins, except as pure speculation.

And then I have piles of really angry people on the internet basically calling everyone stupid for not buying Bitcoin.

It's fucking confusing.
« Last Edit: October 25, 2021, 01:46:05 PM by Malcat »

BicycleB

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Re: What do you think of adding a low% of crypto allocation
« Reply #308 on: October 25, 2021, 03:51:45 PM »
What do you want to want to know?

The same thing I've been asking since the beginning of this thread: where does the truth lie between the two sides that tend to be quite extremely opposed?

What I find frustrating is that most pro crypto people argue as if it's just a given that crypto is the best thing ever, and that those who question it are just clueless, ignorant idiots.

This stance is hard to grasp since so many of the arguments from those against crypto sound quite informed and reasonable.

It's frustrating to read.

It doesn't help that I know a few people in the crypto tech world who don't invest in crypto coins themselves and even more who mount a lot of similar arguments as I see here against investing in hugely valued coins like Bitcoin.

I've got one "expert" saying Etherium is the only coin that makes sense to invest in, and yet another saying that despite some hiccups that EOS remains the "Etherium killer", and yet more saying that it's premature to heavily invest in any individual coins, except as pure speculation.

And then I have piles of really angry people on the internet basically calling everyone stupid for not buying Bitcoin.

It's fucking confusing.

That's a really legitimate quandary! Quite interesting to hear the report of your crypto insiders, too. A key cautionary data point to my ears.

I know I'm not saying anything new here, but - the BTC attitude you see "piles" of seems like a motivated paradigm. A paradigm in that once you see the vision of BTC Shall Rule, everything fits into its gravity. Motivated in that, obviously, the inherent vision of rising wealth depends on acceptance by others at some point; acceptance makes it real, denial threatens the vision. It's only a store of value if people think it is. The feel seems a lot like MLM things that I've seen, except that the downline is replaced by acceptance of the BTC-centric future. And once you're in, breaking out requires a painful shift, so the stakes of denial get even higher, I guess. 

As far as the truth, I wonder too. It seems like kind of a Schrodinger's thing because it's not really determined yet. Yet the general picture seems clear-ish (??). There's something that might be of value, but exactly how and how much is unclear. The something's under feverish and varied development, like early autos (or 1600s tulip bulbs), while being both encouraged and obscured by the fever of excitement about the high financial value now ascribed to one of the early strains (BTC). Most of the what we see is the fever.

Unless people do end up accepting forever that BTC has value. Can't quite sort out the odds.
« Last Edit: October 25, 2021, 04:25:56 PM by BicycleB »

solon

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Re: What do you think of adding a low% of crypto allocation
« Reply #309 on: October 25, 2021, 04:09:31 PM »
Could you all do me a favor? Suppose you were trying to summarize this thread for a CEO. You have to produce 3-4 good points for each side of the debate. Bonus points for using bullets. For example:

Pro Crypto
  • a really good argument
  • another really good argument
  • yet a third really good argument

Anti Crypto
  • a really good argument
  • another really good argument
  • yet a third really good argument



(I admit I haven't read through this thread. But it's so lengthy it seems like a quick summary might reset the debate and help everyone understand it better.)

Malcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #310 on: October 25, 2021, 04:14:45 PM »
Could you all do me a favor? Suppose you were trying to summarize this thread for a CEO. You have to produce 3-4 good points for each side of the debate. Bonus points for using bullets. For example:

Pro Crypto
  • a really good argument
  • another really good argument
  • yet a third really good argument

Anti Crypto
  • a really good argument
  • another really good argument
  • yet a third really good argument



(I admit I haven't read through this thread. But it's so lengthy it seems like a quick summary might reset the debate and help everyone understand it better.)

From what I can tell the argument goes like this

Pro
"Something, something fiat, something, something gains, something something Bitcoin is legal currency in El Salvador"

Con

"Something, something crypto is actually useless, something, something, banned in China, something, something, slow and wasteful"

BicycleB

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Re: What do you think of adding a low% of crypto allocation
« Reply #311 on: October 25, 2021, 04:57:04 PM »
Could you all do me a favor? Suppose you were trying to summarize this thread for a CEO. You have to produce 3-4 good points for each side of the debate. Bonus points for using bullets. For example:

Pro Crypto
  • a really good argument
  • another really good argument
  • yet a third really good argument

Anti Crypto
  • a really good argument
  • another really good argument
  • yet a third really good argument



(I admit I haven't read through this thread. But it's so lengthy it seems like a quick summary might reset the debate and help everyone understand it better.)

Can't give you good, I'm here to learn. Common and semi-plausible from one reader's viewpoint:

Pro
1. Novel blockchain technology provides an electronic means of exchange and value storage with decentralized (aka nongovernmental) security, a unique value
2. Has been used to create electronic coins that rise in value at first, due to inherent features in the algorithm, but are limited in total number and thus can provide a store of value that's more reliable than fickle fiat currency. This can provide a useful store of value when governments inevitably inflate their currencies. Digital gold!
3. Realistically, the fact these are not inherently part of the existing financial system has offered a variety of opportunities that derive from avoiding financial regulation. For a while longer, these opportunities will be quite profitable.

Anti
4. The main use of decentralized crypto is evading government. That's of limited value, and as regulation increases, the value will fade away or at least be small. Advocates make bigger claims for it than this but none of them will really work.
5. The creation of individual "coins" uses large and increasing amounts of energy, making crypto destructive to the climate.
6. The original value rise was triggered by the algorithmic tricks from point 2 above, but it's primarily become a speculative bubble with no enduring value underneath - especially because new types of "coins" can be made at will, cheaply. Existing coins are far above any intrinsic value already and the bubble is going to pop.

PS. Argument zero is in the pro bucket. Namely, one day crypto will be fast reliable non-inflationary non-governmental electronic currency, solving the saver's problem that there is no risk free store of value, and until then it thrillingly rises in value. But the counterarguments that it can't do all that at once seem compelling enough that it's hard to count that as a "good" argument - it just looks like the most common.

(leaves to go buy popcorn with credit card)
« Last Edit: October 25, 2021, 05:20:57 PM by BicycleB »

waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #312 on: October 25, 2021, 05:16:05 PM »
I'll give it a shot:

Pro:
-Existing ways of paying for stuff are expensive (ie credit card fees of 3-4%, wire transfer fees to/from foreign countries even higher) and crypto can allow people to pay each other, in theory at least, inexpensively and securely.
-Crypto can allow people to prove ownership of both digital and real-world items, and to create binding contracts without a third party.
-Crypto can prevent governments from debasing the value of fiat currency and causing hyperinflation crises.

Con:
-The leading cryptocurrency (bitcoin) has never succeeding in becoming a method of making payments as it is extremely volatile in value. This volatility, along with it's deflationary nature (fixed/limited supply of coins) make it unusable as a currency and it will never be used to make transactions in any meaningful way. Hence it has no utility and, at best, can function only as "digital gold" (or like a baseball card/collectible) as a store of value. No other cryptocurrencies, even those with better designs, have so far succeeded in becoming commonly used for commerce either.
-There are thousands of other cryptocurrencies, and a low bar to entry. There is nothing stopping national governments from creating their own cryptocurrencies and/or making any extant non-government currencies illegal (something that has already happened). This means that investing in any individual cryptocurrency is, at best, extremely risky as most or even all current versions will likely end up useless and valueless.
-The cryptocurrency world is rife with fraud (some would say it's mostly fraud) and existing values are propped up by orders of magnitude (ie tether) by said fraud.
-Crypto (or at least bitcoin) uses an incredible amount of energy and is an environmental disaster.

Hopefully that helps.

-W

JohnnyZ

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Re: What do you think of adding a low% of crypto allocation
« Reply #313 on: October 25, 2021, 06:15:31 PM »
Pro:
-Existing ways of paying for stuff are expensive (ie credit card fees of 3-4%, wire transfer fees to/from foreign countries even higher) and crypto can allow people to pay each other, in theory at least, inexpensively and securely.

 It may be my western privilege speaking, but I've never really understood that argument. I can wire money to any EU country without any fee, and I can use transferwise to send money in many countries with great exchange rates. It seems to me what we need is not a new currency, but a paypal without all the price-gouging.
 On the other hand, apparently you have to be an IT major, who has extensively researched exchanges and possibly bought some hardware, to be able to use bitcoin safely.

maizefolk

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Re: What do you think of adding a low% of crypto allocation
« Reply #314 on: October 25, 2021, 08:28:37 PM »
I'll give it a shot:

Pro:
-Existing ways of paying for stuff are expensive (ie credit card fees of 3-4%, wire transfer fees to/from foreign countries even higher) and crypto can allow people to pay each other, in theory at least, inexpensively and securely.
-Crypto can allow people to prove ownership of both digital and real-world items, and to create binding contracts without a third party.
-Crypto can prevent governments from debasing the value of fiat currency and causing hyperinflation crises.

Con:
-The leading cryptocurrency (bitcoin) has never succeeding in becoming a method of making payments as it is extremely volatile in value. This volatility, along with it's deflationary nature (fixed/limited supply of coins) make it unusable as a currency and it will never be used to make transactions in any meaningful way. Hence it has no utility and, at best, can function only as "digital gold" (or like a baseball card/collectible) as a store of value. No other cryptocurrencies, even those with better designs, have so far succeeded in becoming commonly used for commerce either.
-There are thousands of other cryptocurrencies, and a low bar to entry. There is nothing stopping national governments from creating their own cryptocurrencies and/or making any extant non-government currencies illegal (something that has already happened). This means that investing in any individual cryptocurrency is, at best, extremely risky as most or even all current versions will likely end up useless and valueless.
-The cryptocurrency world is rife with fraud (some would say it's mostly fraud) and existing values are propped up by orders of magnitude (ie tether) by said fraud.
-Crypto (or at least bitcoin) uses an incredible amount of energy and is an environmental disaster.

Hopefully that helps.

-W

This seems a pretty good summary of both the strongest pro and strongest con arguments.

The only amendment I'd suggest is that I would extend the first "pro" point that not only do existing ways of paying for stuff not-in-person cost 3-4%, but they also create private gatekeeping of who does and does not get to receive payment via a relatively small number of corporations. This small set of companies may someday decide I'm not allowed to buy (legal) product A, pay for (legal) service B, or contribute to (legal) political cause C.

I first heard about bitcoin around the same time visa and mastercard had decided to cut off wikileaks from donations through credit card networks for choosing to publish leaked US diplomatic cables. It had never occurred to me that credit card companies could just decide a certain organization wouldn't be allowed to receive money. Was very formative to how I view the cryptocurrencies.

Also having had a fair bit of exposure to the Chinese banking system where there are various opaque, confusing, and changing rules about how much money you can take out and where and who you can send money to also probably played a role in how much more value I seem to put on the idea of being able to pay money to people without needing my bank to cooperate and agree with me than many other folks seem to value the same feature.

waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #315 on: October 25, 2021, 08:58:08 PM »
Yeah, the one sentence summary, I think, is:

"Crypto has the amazing potential to improve the human condition and make everyone happier, wealthier, and more free, but bitcoin can't do that and is useless trash backed up by fraud."

-W
« Last Edit: October 25, 2021, 09:25:50 PM by waltworks »

FrugalFukuoka

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Re: What do you think of adding a low% of crypto allocation
« Reply #316 on: October 25, 2021, 10:54:59 PM »
https://bitsonblocks.net/basics-bitcoins-blockchains-book/

I recommend this book to anyone serious about understanding any of the concepts discussed here. It's refreshing in the sense that the author is very knowledgeable and not trying to be persuasive.

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #317 on: October 26, 2021, 07:36:49 AM »
For those that wish to understand some aspects of the positive case for Bitcoin, I (again) recommend this piece (a 20-30 minute read):
https://www.lynalden.com/invest-in-bitcoin/

To me, it comes across as balanced and objective, and the author seems knowledgeable and smart.

If someone can point me towards a similarly detailed, well-balanced and objective piece with an anti-Bitcoin conclusion, I would be very glad to read it.

Malcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #318 on: October 26, 2021, 07:55:39 AM »
For those that wish to understand some aspects of the positive case for Bitcoin, I (again) recommend this piece (a 20-30 minute read):
https://www.lynalden.com/invest-in-bitcoin/

To me, it comes across as balanced and objective, and the author seems knowledgeable and smart.

If someone can point me towards a similarly detailed, well-balanced and objective piece with an anti-Bitcoin conclusion, I would be very glad to read it.

Yeah, that article doesn't say anything different than what has been said here, and it basically says that Bitcoin is appropriate as a small portion of an otherwise well diversified investment portfolio because of the speculative potential.

This is exactly in line with what basically everyone on this forum agrees with in terms of crypto as an investment. Some coins will explode in value, Bitcoin may continue to explode in value. A small portion of a well diversified portfolio invested in crypto is a reasonable way to capture some of that potential explosive growth.

I don't think anyone here would argue against that. I don't even think B42 would argue against anyone gambling a small part of their portfolio on a speculative investment, even if he believes the growth is based on nonsense. There's still potential money to be made in nonsense.

That's why I asked the question early on, if I'm not concerned about FOMO or speculation, is there any logical reason that I should be invested in crypto at this time, and the response from both sides was "not really".

I personally have an interesting perspective, because I'm very interested in understanding, I don't hold an anti-crypto position, but I have zero FOMO, so I'm not looking at it from an individual investment perspective.

I'm just trying to cut through the bullshit. And there is A TON of bullshit. ESPECIALLY from the pro-crypto side.

I'm sorry, but objectively, I have never seen more fucking nonsense than I have read and heard from tons and tons of morons who are intensely bullish on crypto.

Like the article you cited, the most rational, and reasonable perspectives I've seen that are pro-crypto have been very conservative in their investment recommendations.

I have yet to see a compelling source that recommends anything beyond a modest, speculative play.

Because I keep seeing what I'm hearing from the kind of people who are currently advising governments on future use of blockchain. The money in new inventions is almost never in the inventions, it's in the businesses who figure out how to use the inventions.

So the more I learn about this, the more I'm becoming convinced that individual coins are not the optimal crypto play, but that there are no ideal plays for individual consumers at this point. So small, speculative coin purchases remain the most reasonable bet for people with FOMO.

Exactly as that article states.

As always though, I am not at all confident in my position, and am very open to learning how my interpretation is wrong. I'm just REALLY struggling to find high quality pro-crypto content that says anything other than what you've already posted.

MustacheAndaHalf

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Re: What do you think of adding a low% of crypto allocation
« Reply #319 on: October 26, 2021, 09:03:53 AM »
Has anyone done a study of "new crypto coins" and their performance after 3 months or 12 months?  They have a significant chance of going nowhere, like the "venture capital" investing of the crypto world.  Very early, very risky investments.  I'd be curious if their gains are worth the coins that go to zero - especially compared to BTC or ETH.

I think the biggest gap between "pro crypto" and "anti crypto" is the time frame.  If you point to the future, you can make a case for what cryptocurrencies could become.  But "anti crypto" can point to the present, where not much has been done.

If Bitcoin's market cap was turned into a public U.S. company, it would land at #5 on the S&P 500, between Facebook and Amazon.  It would be +50% larger than Visa and Mastercard, combined.  Do you rely on Facebook or Bitcoin more?  Spend with Visa or Bitcoin more?  Market cap is a point against Bitcoin.

Maybe the best way to decide for yourselves is to look at the past 10 years of Bitcoin.  There's the Lightning Network for faster, more efficient transactions.  The potential for "smart contracts", but it's still a work in progress.  Adoption of Bitcoin into futures markets and large holdings by billionaires.  In the past 10 years, is that enough to justify Bitcoin's price or not?

waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #320 on: October 26, 2021, 09:21:07 AM »
I got this email today from Venmo:
    
"Got a few bucks? You could use it to buy crypto.   
    
Did you know you can put that money sitting in your Venmo account to good use? You could use it to buy Bitcoin, Ethereum, and more in a few taps!"

There's also an amazing graphic of a dollar dissolving and turning into some kind of coin with a weird symbol on it.

-W

 
 

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #321 on: October 26, 2021, 10:13:31 AM »
For those that wish to understand some aspects of the positive case for Bitcoin, I (again) recommend this piece (a 20-30 minute read):
https://www.lynalden.com/invest-in-bitcoin/

To me, it comes across as balanced and objective, and the author seems knowledgeable and smart.

If someone can point me towards a similarly detailed, well-balanced and objective piece with an anti-Bitcoin conclusion, I would be very glad to read it.

Yeah, that article doesn't say anything different than what has been said here, and it basically says that Bitcoin is appropriate as a small portion of an otherwise well diversified investment portfolio because of the speculative potential.

This is exactly in line with what basically everyone on this forum agrees with in terms of crypto as an investment. Some coins will explode in value, Bitcoin may continue to explode in value. A small portion of a well diversified portfolio invested in crypto is a reasonable way to capture some of that potential explosive growth.

I don't think anyone here would argue against that. I don't even think B42 would argue against anyone gambling a small part of their portfolio on a speculative investment, even if he believes the growth is based on nonsense. There's still potential money to be made in nonsense.

That's why I asked the question early on, if I'm not concerned about FOMO or speculation, is there any logical reason that I should be invested in crypto at this time, and the response from both sides was "not really".

I personally have an interesting perspective, because I'm very interested in understanding, I don't hold an anti-crypto position, but I have zero FOMO, so I'm not looking at it from an individual investment perspective.

I'm just trying to cut through the bullshit. And there is A TON of bullshit. ESPECIALLY from the pro-crypto side.

I'm sorry, but objectively, I have never seen more fucking nonsense than I have read and heard from tons and tons of morons who are intensely bullish on crypto.

Like the article you cited, the most rational, and reasonable perspectives I've seen that are pro-crypto have been very conservative in their investment recommendations.

I have yet to see a compelling source that recommends anything beyond a modest, speculative play.

Because I keep seeing what I'm hearing from the kind of people who are currently advising governments on future use of blockchain. The money in new inventions is almost never in the inventions, it's in the businesses who figure out how to use the inventions.

So the more I learn about this, the more I'm becoming convinced that individual coins are not the optimal crypto play, but that there are no ideal plays for individual consumers at this point. So small, speculative coin purchases remain the most reasonable bet for people with FOMO.

Exactly as that article states.

As always though, I am not at all confident in my position, and am very open to learning how my interpretation is wrong. I'm just REALLY struggling to find high quality pro-crypto content that says anything other than what you've already posted.

Like all investments, crypto is speculative.  I don't think anyone would say crypto isn't. 

I don't know any of the "pro-crypto" Mustachians that advocate for more than putting a small portion of their portfolio into crypto.  In fact, I don't tell anyone to buy it.  I can tell you that I personally only ever put in a very small portion of my own disposable income in crypto since 2017 and, while I feel Bitcoin has steadily become stronger and stronger with each year, I have no plans to change that.  So I would certainly not advocate for anyone putting anything more than a modent amount into crypto.  Personally, only 3% of my disposable income has gone into crypto since 2017; most of that went in when noone was talking about crypto (2018-2019) and almost all of it went into Bitcoin or Ethereum.  Like you, I read up on crypto.  Like you, I was turned off by the moonboys.  Like you, I was even more turned off by the altcoin shillers.  My sentiments are the same today than they were then.

Where we differ is that I determined that I like many of the characteristics of bitcoin that people here pass disparagments on: 21m cap, immutabie public Ledger, consensus design, POW security, thousands of developers working on bitcoin and side projects built on top of bitcoin (e.g. lightning network), it's track record of perseverance over years and track record of only improving, growing utility, and it's blossoming into a recognized asset class.  I made the determination that I wanted to see bitcoin to succeed and I wanted to be apart of it so I bought some and continued to read about it and frequent bitcoin forums.

Then I learned about ethereum and all the cool things people were doing with ethereum's smart contracts at the time.  I saw value in that. Then I learned about oracles on etheruem and how Eth3  will open doors that I didnt think were possible.  I saw even more value in Etheruem and by connection; bitcoin.

That said, I am truly glad you took the time to study it and make your own determination.  I am good with us being united on the other 94% if our sound portfolios (I have another 3% of my money tied into something that is non-crypto but pure speculative/hobby that I am too embarrassed to discuss!).

ChpBstrd

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Re: What do you think of adding a low% of crypto allocation
« Reply #322 on: October 26, 2021, 10:15:59 AM »
I got this email today from Venmo:
    
"Got a few bucks? You could use it to buy crypto.   
    
Did you know you can put that money sitting in your Venmo account to good use? You could use it to buy Bitcoin, Ethereum, and more in a few taps!"

There's also an amazing graphic of a dollar dissolving and turning into some kind of coin with a weird symbol on it.

-W

You should see how hard Interactive Brokers is pushing crypto. Giant quote tables appear on your main screen. Messages appear in your inbox. Emails are sent weekly. The message is, "you're missing out and this investment is totally legitimate - on par with index funds!". If it all comes crashing down, expect class action lawsuits.

waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #323 on: October 26, 2021, 10:22:52 AM »
You should see how hard Interactive Brokers is pushing crypto. Giant quote tables appear on your main screen. Messages appear in your inbox. Emails are sent weekly. The message is, "you're missing out and this investment is totally legitimate - on par with index funds!". If it all comes crashing down, expect class action lawsuits.

It feels like end-stage pyramid scheme/MLM stuff, where there aren't many investors/suckers left so you have to try harder and harder to rope more in.

-W

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #324 on: October 26, 2021, 10:28:35 AM »
For those that wish to understand some aspects of the positive case for Bitcoin, I (again) recommend this piece (a 20-30 minute read):
https://www.lynalden.com/invest-in-bitcoin/

To me, it comes across as balanced and objective, and the author seems knowledgeable and smart.

If someone can point me towards a similarly detailed, well-balanced and objective piece with an anti-Bitcoin conclusion, I would be very glad to read it.

Yeah, that article doesn't say anything different than what has been said here, and it basically says that Bitcoin is appropriate as a small portion of an otherwise well diversified investment portfolio because of the speculative potential.

This is exactly in line with what basically everyone on this forum agrees with in terms of crypto as an investment. Some coins will explode in value, Bitcoin may continue to explode in value. A small portion of a well diversified portfolio invested in crypto is a reasonable way to capture some of that potential explosive growth.

I don't think anyone here would argue against that. I don't even think B42 would argue against anyone gambling a small part of their portfolio on a speculative investment, even if he believes the growth is based on nonsense. There's still potential money to be made in nonsense.

The article does add a lot of context and background to some of the headline issues already discussed here, and it's a clear answer to the Topic question.

That's not my understanding. The article concludes with a positive recommendation. I think the anti consensus here is that you should steer clear (plus some varying opinions about those that invest so little that win/lose makes no difference anyway).

That's why I asked the question early on, if I'm not concerned about FOMO or speculation, is there any logical reason that I should be invested in crypto at this time, and the response from both sides was "not really".

I personally have an interesting perspective, because I'm very interested in understanding, I don't hold an anti-crypto position, but I have zero FOMO, so I'm not looking at it from an individual investment perspective.

I'm just trying to cut through the bullshit. And there is A TON of bullshit. ESPECIALLY from the pro-crypto side.

I'm sorry, but objectively, I have never seen more fucking nonsense than I have read and heard from tons and tons of morons who are intensely bullish on crypto.

Like the article you cited, the most rational, and reasonable perspectives I've seen that are pro-crypto have been very conservative in their investment recommendations.

I have yet to see a compelling source that recommends anything beyond a modest, speculative play.

Modest ? I agree. There is much uncertainty here.
Speculative ? I agree, but it's speculation based on some sound and detailed reasoning, as opposed to just some crazy hopeful punt.

Because I keep seeing what I'm hearing from the kind of people who are currently advising governments on future use of blockchain. The money in new inventions is almost never in the inventions, it's in the businesses who figure out how to use the inventions.

So the more I learn about this, the more I'm becoming convinced that individual coins are not the optimal crypto play, but that there are no ideal plays for individual consumers at this point. So small, speculative coin purchases remain the most reasonable bet for people with FOMO.

Exactly as that article states.
as that article states . . . specifically for Bitcoin - and including reasons why Bitcoin over other crypto.

And not just FOMO. For me personally, as a little (potential) insurance against devalued fiat / inflation / pumped up markets; all of which = risk to my primary conventional stash / income.

As always though, I am not at all confident in my position, and am very open to learning how my interpretation is wrong. I'm just REALLY struggling to find high quality pro-crypto content that says anything other than what you've already posted.

That's fair enough - I too have many doubts. The posts and the article have covered quite a wide range - is there a specific area that has been overlooked ?

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #325 on: October 26, 2021, 10:41:30 AM »


And not just FOMO. For me personally, as a little (potential) insurance against devalued fiat / inflation / pumped up markets; all of which = risk to my primary conventional stash / income.



whats the baseline for me to know if crypto is a pumped up market today or not and how this is insurance against that?  The last time the market crash BTC fell further than the market.

Malcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #326 on: October 26, 2021, 11:04:14 AM »
Like all investments, crypto is speculative.  I don't think anyone would say crypto isn't. 

I don't know any of the "pro-crypto" Mustachians that advocate for more than putting a small portion of their portfolio into crypto.  In fact, I don't tell anyone to buy it.  I can tell you that I personally only ever put in a very small portion of my own disposable income in crypto since 2017 and, while I feel Bitcoin has steadily become stronger and stronger with each year, I have no plans to change that.  So I would certainly not advocate for anyone putting anything more than a modent amount into crypto.  Personally, only 3% of my disposable income has gone into crypto since 2017; most of that went in when noone was talking about crypto (2018-2019) and almost all of it went into Bitcoin or Ethereum.  Like you, I read up on crypto.  Like you, I was turned off by the moonboys.  Like you, I was even more turned off by the altcoin shillers.  My sentiments are the same today than they were then.

Where we differ is that I determined that I like many of the characteristics of bitcoin that people here pass disparagments on: 21m cap, immutabie public Ledger, consensus design, POW security, thousands of developers working on bitcoin and side projects built on top of bitcoin (e.g. lightning network), it's track record of perseverance over years and track record of only improving, growing utility, and it's blossoming into a recognized asset class.  I made the determination that I wanted to see bitcoin to succeed and I wanted to be apart of it so I bought some and continued to read about it and frequent bitcoin forums.

Then I learned about ethereum and all the cool things people were doing with ethereum's smart contracts at the time.  I saw value in that. Then I learned about oracles on etheruem and how Eth3  will open doors that I didnt think were possible.  I saw even more value in Etheruem and by connection; bitcoin.

That said, I am truly glad you took the time to study it and make your own determination.  I am good with us being united on the other 94% if our sound portfolios (I have another 3% of my money tied into something that is non-crypto but pure speculative/hobby that I am too embarrassed to discuss!).

I haven't made my own conclusions though, I am completely clueless as to where I stand on crypto. That's why I'm so confused and value well thought out perspectives of any sort.

I recently contemplated a speculative real estate investment and was left equally ambivalent.

But I do like to try and understand things.

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #327 on: October 26, 2021, 11:36:27 AM »
And not just FOMO. For me personally, as a little (potential) insurance against devalued fiat / inflation / pumped up markets; all of which = risk to my primary conventional stash / income.

whats the baseline for me to know if crypto is a pumped up market today or not and how this is insurance against that? 

The last time the market crash BTC fell further than the market.

I'm not sure there is a baseline. However, I see good potential for further growth in Bitcoin - the trend is towards greater adoption and it seems to be gathering breadth. Despite it's spectacular growth, it doesn't seem pumped-up to me. I made no claim that my Bitcoin investment is insurance against a Bitcoin crash (??).

A fair point that has been made before (in this topic, I think). My expectation is that Bitcoin will become (is becoming ?) less speculative and more of an established store-of-value as it matures.
There is undoubtedly a fair amount of nervous money in Bitcoin currently, and that's prone to jumping ship at the first sign of trouble in any market. Store-of-value money is likely to be more resilient and negatively-correlated to the stock markets - more like gold, yet very different to gold in terms of continued growth potential.

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #328 on: October 26, 2021, 11:39:04 AM »
And not just FOMO. For me personally, as a little (potential) insurance against devalued fiat / inflation / pumped up markets; all of which = risk to my primary conventional stash / income.

whats the baseline for me to know if crypto is a pumped up market today or not and how this is insurance against that? 

The last time the market crash BTC fell further than the market.

I'm not sure there is a baseline. However, I see good potential for further growth in Bitcoin - the trend is towards greater adoption and it seems to be gathering breadth. Despite it's spectacular growth, it doesn't seem pumped-up to me. I made no claim that my Bitcoin investment is insurance against a Bitcoin crash (??).

A fair point that has been made before (in this topic, I think). My expectation is that Bitcoin will become (is becoming ?) less speculative and more of an established store-of-value as it matures.
There is undoubtedly a fair amount of nervous money in Bitcoin currently, and that's prone to jumping ship at the first sign of trouble in any market. Store-of-value money is likely to be more resilient and negatively-correlated to the stock markets - more like gold, yet very different to gold in terms of continued growth potential.

you compare it to gold and yet it has yet to do anything like gold except consume massive amounts of energy being mined. 

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #329 on: October 26, 2021, 11:58:10 AM »
And not just FOMO. For me personally, as a little (potential) insurance against devalued fiat / inflation / pumped up markets; all of which = risk to my primary conventional stash / income.

whats the baseline for me to know if crypto is a pumped up market today or not and how this is insurance against that? 

The last time the market crash BTC fell further than the market.

I'm not sure there is a baseline. However, I see good potential for further growth in Bitcoin - the trend is towards greater adoption and it seems to be gathering breadth. Despite it's spectacular growth, it doesn't seem pumped-up to me. I made no claim that my Bitcoin investment is insurance against a Bitcoin crash (??).

A fair point that has been made before (in this topic, I think). My expectation is that Bitcoin will become (is becoming ?) less speculative and more of an established store-of-value as it matures.
There is undoubtedly a fair amount of nervous money in Bitcoin currently, and that's prone to jumping ship at the first sign of trouble in any market. Store-of-value money is likely to be more resilient and negatively-correlated to the stock markets - more like gold, yet very different to gold in terms of continued growth potential.

you compare it to gold and yet it has yet to do anything like gold except consume massive amounts of energy being mined. 

I'm expecting that Bitcoin will become (is becoming ?) more like gold.
« Last Edit: October 26, 2021, 12:00:55 PM by LateStarter »

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #330 on: October 26, 2021, 12:04:23 PM »
And not just FOMO. For me personally, as a little (potential) insurance against devalued fiat / inflation / pumped up markets; all of which = risk to my primary conventional stash / income.

whats the baseline for me to know if crypto is a pumped up market today or not and how this is insurance against that? 

The last time the market crash BTC fell further than the market.

I'm not sure there is a baseline. However, I see good potential for further growth in Bitcoin - the trend is towards greater adoption and it seems to be gathering breadth. Despite it's spectacular growth, it doesn't seem pumped-up to me. I made no claim that my Bitcoin investment is insurance against a Bitcoin crash (??).

A fair point that has been made before (in this topic, I think). My expectation is that Bitcoin will become (is becoming ?) less speculative and more of an established store-of-value as it matures.
There is undoubtedly a fair amount of nervous money in Bitcoin currently, and that's prone to jumping ship at the first sign of trouble in any market. Store-of-value money is likely to be more resilient and negatively-correlated to the stock markets - more like gold, yet very different to gold in terms of continued growth potential.

you compare it to gold and yet it has yet to do anything like gold except consume massive amounts of energy being mined. 

I'm expecting that Bitcoin will become (is becoming ?) more like gold.
[/quote]

so your fundamental bet is on BTC being something collected or shall we just call it what it is a collectible.  Which have throughout history been very very almost extremely volatile with respect to how people feel about it and typically come in fads.  So you're picking one of the OLDEST BEST performing collectibles and saying yeah its going to be that.  Feel like you've been in a confirmation bias machine.  With all the things that have been collected through out time or just even all the stocks in the world making that proclamation is like trying to find a needle in a haystack. 

ChpBstrd

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Re: What do you think of adding a low% of crypto allocation
« Reply #331 on: October 26, 2021, 12:08:25 PM »
Just put it all in the new eNaira cryptocurrency out of Nigeria. What could go wrong?

https://finance.yahoo.com/video/nigeria-launches-cryptocurrency-enaira-amid-155450308.html

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #332 on: October 26, 2021, 12:15:02 PM »
Just put it all in the new eNaira cryptocurrency out of Nigeria. What could go wrong?

https://finance.yahoo.com/video/nigeria-launches-cryptocurrency-enaira-amid-155450308.html

Just the other day I was contacted by a Nigerian prince.  He needed access to my accounts to move some money.  I really would have lost out if he just used cryptocurrency instead!

MustacheAndaHalf

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Re: What do you think of adding a low% of crypto allocation
« Reply #333 on: October 26, 2021, 01:07:25 PM »
I have a flawed get rich scheme - hack Satoshi's wallets.  Now if the founder of Bitcoin had used only one wallet to store 1.1 million Bitcoin, that wallet would be worth about $68 billion.  If you set a computer working to hack it, and it succeeded... that computer would earn about one penny an hour, because it would take 0.65 billion years.

But the wallets are are more spread out, like the one that moved 616 BTC to another location ($38 million USD at current prices).  I wonder if Satoshi moved $38 million BTC into a brokerage account, and can now take our loans against it?

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #334 on: October 26, 2021, 01:07:38 PM »
Like all investments, crypto is speculative.

Technically, I don't believe that's accurate. "Speculative", as I understand it, means an investor expects to profit by timing price fluctuations correctly. And, as you've stated, this is the only way to make money by purchasing bitcoin—hoping you can sell it to someone else later for more money.

This is substantially different than other things people typically consider investments. Stocks pay (or have the expectation to eventually pay) dividends. Bonds have yields. There is a very obvious and "win-win" system whereby investors profit even if they never need to sell their shares to someone at a higher price later.

Where we differ is that I determined that I like many of the characteristics of bitcoin that people here pass disparagments on: 21m cap, immutabie public Ledger, consensus design, POW security, thousands of developers working on bitcoin and side projects built on top of bitcoin (e.g. lightning network), it's track record of perseverance over years and track record of only improving, growing utility, and it's blossoming into a recognized asset class.  I made the determination that I wanted to see bitcoin to succeed and I wanted to be apart of it so I bought some and continued to read about it and frequent bitcoin forums.

Many of us pass disparagements on these characteristics because these are characteristics that are detrimental. Let's go over them:

1. 21m cap. A fixed money supply will lead to deflation in a growing economy. Given the classical quantity theory formula 𝑀𝑉=𝑃𝑌, where M=the money supply, V = the velocity of money, P = the price, and Y = the quantity of real goods. Assuming M stays constant (21M bitcoins), and Y increases (a growing economy), you see that the price or the velocity. must compensate. By virtually any theory of economics, from Austrian to Keynesian, this is a very bad idea.
2. Immutable public ledger. Crypto enthusiasts like to mention this as evidence that Bitcoin is "secure". In my mind, this is tantamount to lying. It depends on a really bizarre definition of "secure" that misleads people into thinking they're less likely to be scammed if they transact in Bitcoin. But in reality, because there are no trusted 3rd parties, and because the ledger is immutable, if someone tricks you into a fraudulent transaction, there is nothing you can do about it. Credit card payments, by contrast, can be stopped and reversed. The immutability doesn't reduce fraud—it just shifts who suffers the consequences: to the consumer. Some merchants, and certainly most swindlers definitely like the immutable ledger idea, though.
3. Consensus design. I'm curious what you find beneficial here?
4. POW security. Proof of Work is another thing Bitcoin (rightfully, imo) gets attacked for. Proof of Work is the deliberately wasteful scheme by which Bitcoin solves the double spending problem. This problem only exists in authorityless distributed systems. So it's unclear what you like about PoW. Much like a Segway, it is a neat invention. But... I'm not convinced that it's particularly useful for much.

I think the remaining points can be summed up as "other people are spending time/money on it, therefore..." aka argumentum ad populum—so no point in arguing that one.

« Last Edit: October 26, 2021, 01:22:09 PM by the_gastropod »

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #335 on: October 26, 2021, 01:50:49 PM »
Like all investments, crypto is speculative.

Technically, I don't believe that's accurate. "Speculative", as I understand it, means an investor expects to profit by timing price fluctuations correctly. And, as you've stated, this is the only way to make money by purchasing bitcoin—hoping you can sell it to someone else later for more money.

This is substantially different than other things people typically consider investments. Stocks pay (or have the expectation to eventually pay) dividends. Bonds have yields. There is a very obvious and "win-win" system whereby investors profit even if they never need to sell their shares to someone at a higher price later.

Where we differ is that I determined that I like many of the characteristics of bitcoin that people here pass disparagments on: 21m cap, immutabie public Ledger, consensus design, POW security, thousands of developers working on bitcoin and side projects built on top of bitcoin (e.g. lightning network), it's track record of perseverance over years and track record of only improving, growing utility, and it's blossoming into a recognized asset class.  I made the determination that I wanted to see bitcoin to succeed and I wanted to be apart of it so I bought some and continued to read about it and frequent bitcoin forums.

Many of us pass disparagements on these characteristics because these are characteristics that are detrimental. Let's go over them:

1. 21m cap. A fixed money supply will lead to deflation in a growing economy. Given the classical quantity theory formula 𝑀𝑉=𝑃𝑌, where M=the money supply, V = the velocity of money, P = the price, and Y = the quantity of real goods. Assuming M stays constant (21M bitcoins), and Y increases (a growing economy), you see that the price or the velocity. must compensate. By virtually any theory of economics, from Austrian to Keynesian, this is a very bad idea.
2. Immutable public ledger. Crypto enthusiasts like to mention this as evidence that Bitcoin is "secure". In my mind, this is tantamount to lying. It depends on a really bizarre definition of "secure" that misleads people into thinking they're less likely to be scammed if they transact in Bitcoin. But in reality, because there are no trusted 3rd parties, and because the ledger is immutable, if someone tricks you into a fraudulent transaction, there is nothing you can do about it. Credit card payments, by contrast, can be stopped and reversed. The immutability doesn't reduce fraud—it just shifts who suffers the consequences: to the consumer. Some merchants, and certainly most swindlers definitely like the immutable ledger idea, though.
3. Consensus design. I'm curious what you find beneficial here?
4. POW security. Proof of Work is another thing Bitcoin (rightfully, imo) gets attacked for. Proof of Work is the deliberately wasteful scheme by which Bitcoin solves the double spending problem. This problem only exists in authorityless distributed systems. So it's unclear what you like about PoW. Much like a Segway, it is a neat invention. But... I'm not convinced that it's particularly useful for much.

I think the remaining points can be summed up as "other people are spending time/money on it, therefore..." aka argumentum ad populum—so no point in arguing that one.

Speculating means you buy it with the goal of making money or not losing opportunity cost in the process.  We speculate everytime we buy a stock or and index fund; its not inherently harmful nor unmustachian. 

Bitcoin is an asset like gold.  It's fixed supply is a net positive because investors have the confidence that it's supply won't fluctuate at the whim of a central authority.  You can use bitcoin as a currency if you want, and some do, but I would wager most view it as an asset and have done so for atleast the past 7 years.

The immutable public Ledger means your coins can't be double spent.  This is a counter to wire fraud and also facilitates trustless transactions.  This has its downside, which some may say is an upside (including me), because it also allows government to seize funds (i.e. colonial pipeline) and enforce tax laws.  Alot of crypto proponents don't like these last two thing but I see it all as a positive.

Consensus is good because it, in theory, results in more careful, calculated, and popular updates.  The alternative is having legislators pass unpopular laws in the dead of night that the people don't want.  This happens all the time.

POW is not wasted energy because that energy ensures transactions are secure and immutable.  Moreover, if you don't like POW then crypto is not a zero sum game.  You can chose to back other cryptos that don't have POW. 

Finally, you aren't going to convince me that it's irrelevant that there are thousands of developers working on improving or building services ontop of bitcoin.  These developers help scale bitcoin.  It's only going to get better, cheaper, quicker, and more accessible from here. 


LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #336 on: October 26, 2021, 01:56:03 PM »
And not just FOMO. For me personally, as a little (potential) insurance against devalued fiat / inflation / pumped up markets; all of which = risk to my primary conventional stash / income.

whats the baseline for me to know if crypto is a pumped up market today or not and how this is insurance against that? 

The last time the market crash BTC fell further than the market.

I'm not sure there is a baseline. However, I see good potential for further growth in Bitcoin - the trend is towards greater adoption and it seems to be gathering breadth. Despite it's spectacular growth, it doesn't seem pumped-up to me. I made no claim that my Bitcoin investment is insurance against a Bitcoin crash (??).

A fair point that has been made before (in this topic, I think). My expectation is that Bitcoin will become (is becoming ?) less speculative and more of an established store-of-value as it matures.
There is undoubtedly a fair amount of nervous money in Bitcoin currently, and that's prone to jumping ship at the first sign of trouble in any market. Store-of-value money is likely to be more resilient and negatively-correlated to the stock markets - more like gold, yet very different to gold in terms of continued growth potential.

you compare it to gold and yet it has yet to do anything like gold except consume massive amounts of energy being mined. 

I'm expecting that Bitcoin will become (is becoming ?) more like gold.

so your fundamental bet is on BTC being something collected or shall we just call it what it is a collectible.  Which have throughout history been very very almost extremely volatile with respect to how people feel about it and typically come in fads.  So you're picking one of the OLDEST BEST performing collectibles and saying yeah its going to be that.

No, you're misquoting me again. I clearly said I expect it to become something more like gold.
For clarity, my view (and that of many others) is that the Bitcoin price is likely to become less positively-correlated with the stock market and will tend towards negative-correlation - more like gold.

Feel like you've been in a confirmation bias machine.

Nope, I've seen, read and heard many different views - and I'm interested in all of them. Almost every one of my posts here includes a caveat of uncertainty and an acknowledgement of risk. Contrast that to the conviction and certainty expressed by many here, with regard to a novel technology and an inherently uncertain future.

I probably come across as more pro-Bitcoin than I really am. I am pro-Bitcoin, and I've disagreed with many of the anti concerns raised here but I haven't disagreed with all of them. The deflationary currency issue is interesting and I'm endeavouring to learn more about it.

With all the things that have been collected through out time or just even all the stocks in the world making that proclamation is like trying to find a needle in a haystack.

Well, maybe and maybe not. For someone that is positive about the future of crypto, there are legitimate 'network effect' arguments that put Bitcoin in a strong position vs the competition. See the article I linked previously if you're interested in the detail.

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #337 on: October 26, 2021, 02:00:41 PM »
Like all investments, crypto is speculative.

Technically, I don't believe that's accurate. "Speculative", as I understand it, means an investor expects to profit by timing price fluctuations correctly. And, as you've stated, this is the only way to make money by purchasing bitcoin—hoping you can sell it to someone else later for more money.

This is substantially different than other things people typically consider investments. Stocks pay (or have the expectation to eventually pay) dividends. Bonds have yields. There is a very obvious and "win-win" system whereby investors profit even if they never need to sell their shares to someone at a higher price later.

Where we differ is that I determined that I like many of the characteristics of bitcoin that people here pass disparagments on: 21m cap, immutabie public Ledger, consensus design, POW security, thousands of developers working on bitcoin and side projects built on top of bitcoin (e.g. lightning network), it's track record of perseverance over years and track record of only improving, growing utility, and it's blossoming into a recognized asset class.  I made the determination that I wanted to see bitcoin to succeed and I wanted to be apart of it so I bought some and continued to read about it and frequent bitcoin forums.

Many of us pass disparagements on these characteristics because these are characteristics that are detrimental. Let's go over them:

1. 21m cap. A fixed money supply will lead to deflation in a growing economy. Given the classical quantity theory formula 𝑀𝑉=𝑃𝑌, where M=the money supply, V = the velocity of money, P = the price, and Y = the quantity of real goods. Assuming M stays constant (21M bitcoins), and Y increases (a growing economy), you see that the price or the velocity. must compensate. By virtually any theory of economics, from Austrian to Keynesian, this is a very bad idea.
2. Immutable public ledger. Crypto enthusiasts like to mention this as evidence that Bitcoin is "secure". In my mind, this is tantamount to lying. It depends on a really bizarre definition of "secure" that misleads people into thinking they're less likely to be scammed if they transact in Bitcoin. But in reality, because there are no trusted 3rd parties, and because the ledger is immutable, if someone tricks you into a fraudulent transaction, there is nothing you can do about it. Credit card payments, by contrast, can be stopped and reversed. The immutability doesn't reduce fraud—it just shifts who suffers the consequences: to the consumer. Some merchants, and certainly most swindlers definitely like the immutable ledger idea, though.
3. Consensus design. I'm curious what you find beneficial here?
4. POW security. Proof of Work is another thing Bitcoin (rightfully, imo) gets attacked for. Proof of Work is the deliberately wasteful scheme by which Bitcoin solves the double spending problem. This problem only exists in authorityless distributed systems. So it's unclear what you like about PoW. Much like a Segway, it is a neat invention. But... I'm not convinced that it's particularly useful for much.

I think the remaining points can be summed up as "other people are spending time/money on it, therefore..." aka argumentum ad populum—so no point in arguing that one.

Speculating means you buy it with the goal of making money or not losing opportunity cost in the process.  We speculate everytime we buy a stock or and index fund; its not inherently harmful nor unmustachian. 

Bitcoin is an asset like gold.  It's fixed supply is a net positive because investors have the confidence that it's supply won't fluctuate at the whim of a central authority.  You can use bitcoin as a currency if you want, and some do, but I would wager most view it as an asset and have done so for atleast the past 7 years.

The immutable public Ledger means your coins can't be double spent.  This is a counter to wire fraud and also facilitates trustless transactions.  This has its downside, which some may say is an upside (including me), because it also allows government to seize funds (i.e. colonial pipeline) and enforce tax laws.  Alot of crypto proponents don't like these last two thing but I see it all as a positive.

Consensus is good because it, in theory, results in more careful, calculated, and popular updates.  The alternative is having legislators pass unpopular laws in the dead of night that the people don't want.  This happens all the time.

POW is not wasted energy because that energy ensures transactions are secure and immutable.  Moreover, if you don't like POW then crypto is not a zero sum game.  You can chose to back other cryptos that don't have POW. 

Finally, you aren't going to convince me that it's irrelevant that there are thousands of developers working on improving or building services ontop of bitcoin.  These developers help scale bitcoin.  It's only going to get better, cheaper, quicker, and more accessible from here.

so is it like gold or is it maybe going to become like gold b/c you've stated both in your analysis.  or is it like beanie babies of which many people produced lots of extra crap for including storage of and many sold at one point for many times over value today.  Same with sneakers today.  there are a finite number of air jordan's created in a given year there never will be any more of that specific shoe released in that specific vintage.  people produce lots of extra crap for sneakers too.  There is also only one mona lisa.  through out time there has been many many many ways to store value - you've selected that this will be gold got it ... but then you said maybe it will be ... but then you said it is.  man i'm confused.

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #338 on: October 26, 2021, 02:09:53 PM »
Speculating means you buy it with the goal of making money or not losing opportunity cost in the process.  We speculate everytime we buy a stock or and index fund; its not inherently harmful nor unmustachian.

You can use whatever word and/or definition you like. But at the end of the day businesses (stocks) have value because they earn profits, and in turn pay you money (in dividends). This also means there is something "there" to price them. Bitcoin is different in that it is 100% pure speculation. There is no revenue. This is substantially different from investments advocated by this community, generally, and much more similar to meme stocks. What's odd is we don't see many "What do you think about adding a low % of GME allocation?" threads...

Bitcoin is an asset like gold.  It's fixed supply is a net positive because investors have the confidence that it's supply won't fluctuate at the whim of a central authority.  You can use bitcoin as a currency if you want, and some do, but I would wager most view it as an asset and have done so for atleast the past 7 years.

And let the goal post shift game begin! Either Bitcoin is a currency or an asset. It cannot be both: the attributes that make a good asset necessarily make it a bad currency, and the attributes that make for a good currency necessarily make for a poor asset. That you—and frankly most—crypto enthusiasts fail to grasp this very basic rule of finance is part of the reason many of us struggle to take you seriously.

The immutable public Ledger means your coins can't be double spent.

And then there's this stuff. Like that's not at all the point of the immutable ledger. The immutable/public ledger is for audibility. Immutable public ledgers (merkle trees) have been widely used in software development for ~40 years. They are very cheap and efficient. Proof of Work is the mechanism that prevents double-spending. Proof of Work is necessarily VERY inefficient and expensive.

This is a counter to wire fraud and also facilitates trustless transactions.  This has its downside, which some may say is an upside (including me), because it also allows government to seize funds (i.e. colonial pipeline) and enforce tax laws.  Alot of crypto proponents don't like these last two thing but I see it all as a positive.

These are problems very few of us on this board will ever have to deal with. As I've repeatedly agreed: Bitcoin's single actual use-case is regulatory arbitrage. I think it's important to understand this is not a technical feat. This is only a temporary "too new to have yet been regulated" point in time. This use-case will evaporate eventually.

Consensus is good because it, in theory, results in more careful, calculated, and popular updates.  The alternative is having legislators pass unpopular laws in the dead of night that the people don't want.  This happens all the time.

But Bitcoin is digital gold, not a currency, right? What legislators are passing gold laws?! Or have you goal-post shifted back to currency chat already? Tough to keep track.

POW is not wasted energy because that energy ensures transactions are secure and immutable.  Moreover, if you don't like POW then crypto is not a zero sum game.  You can chose to back other cryptos that don't have POW. 

Again, PoW is only for solving the double spending problem. Immutability is easily solved with very basic cryptography. And "secure" is meaningless without mentioning an attack-vector (I'm guessing you mean mutating the values, which... again, is very simple and cheap to do).

As for zero sum game... I'm not sure if we agree on what that phrase means?! Every cryptocurrency I'm familiar with is, well, worse than a zero-sum game, they're negative-sum games. But I digress..

Finally, you aren't going to convince me that it's irrelevant that there are thousands of developers working on improving or building services ontop of bitcoin.  These developers help scale bitcoin.  It's only going to get better, cheaper, quicker, and more accessible from here.

It's not irrelevant, but it's not a good reason to get into a whole lot of anything. It's basically the old "if everybody else was jumping off a bridge..." wisdom your parents may've mentioned as a child.
« Last Edit: October 26, 2021, 02:28:30 PM by the_gastropod »

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #339 on: October 26, 2021, 02:16:29 PM »
Like all investments, crypto is speculative.

Technically, I don't believe that's accurate. "Speculative", as I understand it, means an investor expects to profit by timing price fluctuations correctly. And, as you've stated, this is the only way to make money by purchasing bitcoin—hoping you can sell it to someone else later for more money.

This is substantially different than other things people typically consider investments. Stocks pay (or have the expectation to eventually pay) dividends. Bonds have yields. There is a very obvious and "win-win" system whereby investors profit even if they never need to sell their shares to someone at a higher price later.

Where we differ is that I determined that I like many of the characteristics of bitcoin that people here pass disparagments on: 21m cap, immutabie public Ledger, consensus design, POW security, thousands of developers working on bitcoin and side projects built on top of bitcoin (e.g. lightning network), it's track record of perseverance over years and track record of only improving, growing utility, and it's blossoming into a recognized asset class.  I made the determination that I wanted to see bitcoin to succeed and I wanted to be apart of it so I bought some and continued to read about it and frequent bitcoin forums.

Many of us pass disparagements on these characteristics because these are characteristics that are detrimental. Let's go over them:

1. 21m cap. A fixed money supply will lead to deflation in a growing economy. Given the classical quantity theory formula 𝑀𝑉=𝑃𝑌, where M=the money supply, V = the velocity of money, P = the price, and Y = the quantity of real goods. Assuming M stays constant (21M bitcoins), and Y increases (a growing economy), you see that the price or the velocity. must compensate. By virtually any theory of economics, from Austrian to Keynesian, this is a very bad idea.
2. Immutable public ledger. Crypto enthusiasts like to mention this as evidence that Bitcoin is "secure". In my mind, this is tantamount to lying. It depends on a really bizarre definition of "secure" that misleads people into thinking they're less likely to be scammed if they transact in Bitcoin. But in reality, because there are no trusted 3rd parties, and because the ledger is immutable, if someone tricks you into a fraudulent transaction, there is nothing you can do about it. Credit card payments, by contrast, can be stopped and reversed. The immutability doesn't reduce fraud—it just shifts who suffers the consequences: to the consumer. Some merchants, and certainly most swindlers definitely like the immutable ledger idea, though.
3. Consensus design. I'm curious what you find beneficial here?
4. POW security. Proof of Work is another thing Bitcoin (rightfully, imo) gets attacked for. Proof of Work is the deliberately wasteful scheme by which Bitcoin solves the double spending problem. This problem only exists in authorityless distributed systems. So it's unclear what you like about PoW. Much like a Segway, it is a neat invention. But... I'm not convinced that it's particularly useful for much.

I think the remaining points can be summed up as "other people are spending time/money on it, therefore..." aka argumentum ad populum—so no point in arguing that one.

Speculating means you buy it with the goal of making money or not losing opportunity cost in the process.  We speculate everytime we buy a stock or and index fund; its not inherently harmful nor unmustachian. 

Bitcoin is an asset like gold.  It's fixed supply is a net positive because investors have the confidence that it's supply won't fluctuate at the whim of a central authority.  You can use bitcoin as a currency if you want, and some do, but I would wager most view it as an asset and have done so for atleast the past 7 years.

The immutable public Ledger means your coins can't be double spent.  This is a counter to wire fraud and also facilitates trustless transactions.  This has its downside, which some may say is an upside (including me), because it also allows government to seize funds (i.e. colonial pipeline) and enforce tax laws.  Alot of crypto proponents don't like these last two thing but I see it all as a positive.

Consensus is good because it, in theory, results in more careful, calculated, and popular updates.  The alternative is having legislators pass unpopular laws in the dead of night that the people don't want.  This happens all the time.

POW is not wasted energy because that energy ensures transactions are secure and immutable.  Moreover, if you don't like POW then crypto is not a zero sum game.  You can chose to back other cryptos that don't have POW. 

Finally, you aren't going to convince me that it's irrelevant that there are thousands of developers working on improving or building services ontop of bitcoin.  These developers help scale bitcoin.  It's only going to get better, cheaper, quicker, and more accessible from here.

so is it like gold or is it maybe going to become like gold b/c you've stated both in your analysis.  or is it like beanie babies of which many people produced lots of extra crap for including storage of and many sold at one point for many times over value today.  Same with sneakers today.  there are a finite number of air jordan's created in a given year there never will be any more of that specific shoe released in that specific vintage.  people produce lots of extra crap for sneakers too.  There is also only one mona lisa.  through out time there has been many many many ways to store value - you've selected that this will be gold got it ... but then you said maybe it will be ... but then you said it is.  man i'm confused.

Yeah I am confused too because I don't know where you got that from.  I've received many criticism but I've never been called inconsistent.

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #340 on: October 26, 2021, 02:18:24 PM »
Speculating means you buy it with the goal of making money or not losing opportunity cost in the process.  We speculate everytime we buy a stock or and index fund; its not inherently harmful nor unmustachian.

This is not the financial usage as I understand it, and it doesn't seem to correspond with anything I can find online:

"In the world of finance, speculation, or speculative trading, refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain or other major value." - https://www.investopedia.com/terms/s/speculation.asp

"Speculation involves trading a financial instrument involving high risk, in expectation of significant returns. The motive is to take maximum advantage from fluctuations in the market.

Speculators are prevalent in the markets where price movements of securities are highly frequent and volatile. They play very important roles in the markets by absorbing excess risk and providing much needed liquidity in the market by buying and selling when other investors don't participate."  - https://economictimes.indiatimes.com/definition/speculation

"Speculation - Purchasing risky investments that present the possibility of large profits, but also pose a higher-than-average possibility of loss. A profitable strategy over the long term if undertaken by professionals who hedge their portfolios to control the amount of risk." - https://financial-dictionary.thefreedictionary.com/speculation

"In finance, speculation is also the practice of engaging in risky financial transactions in an attempt to profit from short term fluctuations in the market value of a tradable financial instrument—rather than attempting to profit from the underlying financial attributes embodied in the instrument such as value addition, return on investment, or dividends.

Speculators play one of four primary roles in financial markets, along with hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who seek to profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument's underlying attributes" - https://en.wikipedia.org/wiki/Speculation



I believe that most people on this forum advocate for investment rather than speculation.  They don't seem to be equivalent terms.  Speculation is a risky short term thing, that depends upon quick market changes . . . investment is less risky and involves holding the investment for extended periods of times (often decades or longer).
« Last Edit: October 26, 2021, 02:32:02 PM by GuitarStv »

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #341 on: October 26, 2021, 02:30:39 PM »
Speculating means you buy it with the goal of making money or not losing opportunity cost in the process.  We speculate everytime we buy a stock or and index fund; its not inherently harmful nor unmustachian.

You can use whatever word and/or definition you like. But at the end of the day businesses (stocks) have value because they pay you money (in dividends). This also means there is something "there" to price them. Bitcoin is different in that it is 100% pure speculation. There is no revenue. This is substantially different from investments advocated by this community, generally, and much more similar to meme stocks.

Bitcoin is an asset like gold.  It's fixed supply is a net positive because investors have the confidence that it's supply won't fluctuate at the whim of a central authority.  You can use bitcoin as a currency if you want, and some do, but I would wager most view it as an asset and have done so for atleast the past 7 years.

And let the goal post shift game begin! Either Bitcoin is a currency or an asset. It cannot be both: the attributes that make a good asset necessarily make it a bad currency, and the attributes that make for a good currency necessarily make for a poor asset. That you—and frankly most—crypto enthusiasts fail to grasp this very basic rule of finance is part of the reason many of us struggle to take you seriously.

The immutable public Ledger means your coins can't be double spent.

And then there's this stuff. Like that's not at all the point of the immutable ledger. The immutable/public ledger is for audibility. Immutable public ledgers (merkle trees) have been widely used in software development for ~40 years. They are very cheap and efficient. Proof of Work is the mechanism that prevents double-spending. Proof of Work is necessarily VERY inefficient and expensive.

This is a counter to wire fraud and also facilitates trustless transactions.  This has its downside, which some may say is an upside (including me), because it also allows government to seize funds (i.e. colonial pipeline) and enforce tax laws.  Alot of crypto proponents don't like these last two thing but I see it all as a positive.

These are problems very few of us on this board will ever have to deal with. As I've repeatedly agreed: Bitcoin's single actual use-case is regulatory arbitrage. I think it's important to understand this is not a technical feat. This is only a temporary "too new to have yet been regulated" point in time. This use-case will evaporate eventually.

Consensus is good because it, in theory, results in more careful, calculated, and popular updates.  The alternative is having legislators pass unpopular laws in the dead of night that the people don't want.  This happens all the time.

But Bitcoin is digital gold, not a currency, right? What legislators are passing gold laws?! Or have you goal-post shifted back to currency chat already? Tough to keep track.

POW is not wasted energy because that energy ensures transactions are secure and immutable.  Moreover, if you don't like POW then crypto is not a zero sum game.  You can chose to back other cryptos that don't have POW. 

Again, PoW is only for solving the double spending problem. Immutability is easily solved with very basic cryptography. And "secure" is meaningless without mentioning an attack-vector (I'm guessing you mean mutating the values, which... again, is very simple and cheap to do).

As for zero sum game... I'm not sure if we agree on what that phrase means?! Every cryptocurrency I'm familiar with is, well, worse than a zero-sum game, they're negative-sum games. But I digress..

Finally, you aren't going to convince me that it's irrelevant that there are thousands of developers working on improving or building services ontop of bitcoin.  These developers help scale bitcoin.  It's only going to get better, cheaper, quicker, and more accessible from here.

It's not irrelevant, but it's not a good reason to get into a whole lot of anything. It's basically the old "if everybody else was jumping off a bridge..." wisdom your parents may've mentioned as a child.

Not all stocks pay dividends.  People buy stocks because they think it's a better place to grow their money than cash.  That's a form of speculation.  Is there more risk is speculating in crypto than the s&p 500 index - well yeah.  That doesn't mean an element of speculation is not in common between the two.

Truthfully, I don't want to convince you to change your views.  You do your thing and I'll do mine and only time will tell which of us is right.

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #342 on: October 26, 2021, 02:36:48 PM »
Not all stocks pay dividends.  People buy stocks because they think it's a better place to grow their money than cash.  That's a form of speculation.  Is there more risk is speculating in crypto than the s&p 500 index - well yeah.  That doesn't mean an element of speculation is not in common between the two.

Some stocks (e.g., Amazon) don't pay dividends because they reinvest their profits into the company. There is 100% an expectation that eventually Amazon will pay profits out as dividends. That is what stock is: entitlement to a company's assets and profits in proportion to how much of their stock you own.

Some other stocks (e.g., GME) are absolutely just speculative nightmares, no question. There is absolutely some grey between the black/white of "speculation" vs "investment". But... you were the one that made the assertion "all investment is speculation". I think that's obviously pretty bogus—there is a massive divide between investing in the S&P500 and investing in Bitcoin.

Truthfully, I don't want to convince you to change your views.  You do your thing and I'll do mine and only time will tell which of us is right.

Ay, that's cool. For your sake, I hope I'm wrong :) Let's mark our calendars to check this thread in 2031 and see what happens?
« Last Edit: October 26, 2021, 02:57:04 PM by the_gastropod »

waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #343 on: October 26, 2021, 03:22:46 PM »
People buy stocks because they think it's a better place to grow their money than cash. 

This, I think, sums it up. There are 2 types of people:

-People who want to save up *money* and not have it lose value, ie who want to grow their money by having cash or cash equivalents.

-People who just want to use money as a tool and have little interest in cash because their wealth is in other assets.

For example, I have low/middle 7 figure net worth, but I probably only have 2% of that in actual dollars (not physical cash) - and I only have that much because I want to have some ready money on hand in case I need to put a new roof on my house and buy a car at the same time or something and I don't want to deal with the hassle of selling stock to accomplish that. If I was less lazy and cared about optimizing more I would move most of that cash into something (stocks, bonds, RE, etc). Money is like a hammer - as long as I have enough hammers to pound the nails I need to pound, I really don't want more. If my on-hand cash loses 5 or 10 or even 20% of it's value in a year, I really don't care all that much.

Then there are the people with thousands of dollars in their walls/mattress, or a bunch of gold in their safe deposit box. People buy the collectors coins out of Parade magazine or off an ad on Fox News. Having that *money* physically in their possession is necessary for their sense of security. Inflation feels like an attack on their very being.

Folks who want money to never lose value predate bitcoin of course, we call them goldbugs. It's a personality type. Honestly it's not a mindset I really understand, but it is what it is.

So to a meaningful degree, some of us are never going to see eye to eye on this.

-W

thesis

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Re: What do you think of adding a low% of crypto allocation
« Reply #344 on: October 26, 2021, 03:47:05 PM »
I remember reading the first few pages of this thread when it first started, and now I've read the last few pages.

Most of the people I know who are buying cryptocurrencies are basically treating them like penny stocks, hoping to buy super low, thereafter to experience high growth and a massive net gain. "To the moon" is one of the most annoying phrases I have heard in this regard.

But this, in itself, is not an indictment of investing in crypto.

Moreover, a lot of libertarian-types are drawn to crytpo currencies because their "de-centralized" use as a store of value seems to appeal to their "fight the government" attitude.

But this, in itself, is not an indictment of investing in crypto.

I'm with Malcat on this one. I may have mentioned before, I keep hoping to see some core principle of understanding emerge from the debate, but I'm not seeing it either way.

What I am slightly concerned about is that financial institutions realize there is money to be made selling these "coins" to the masses, and as others have mentioned, they are pushing this very heavily. Having some crypto has become quite fashionable. But if crypto starts to be used as financial backing more and more, could it actually trigger a recession if it all implodes? This is pure speculation on my part, and it's not the reason I don't own any crytpo, but think of how people got fancy with mortgage-backed securities and how that all imploded in the great recession. Are there now crytpo-backed securities? The popularity it has experienced is not a good thing, IMO, especially since most investors are just trying to chase the gains of Bitcoin, just like how stock investors pine over how much Apple stock would now be worth if they had bought when it first went public (or at least, you get the idea).

I guess my point is, it's not my problem until it's everyone's problem (potentially). As it is, I don't like jumping on fads (or at least, if I'm being deeply honest, I don't like to be thought of as having jumped on any fads), and I don't yet have a compelling reason to invest in crytpo, so I'm comfortably on the outside at this point.

(I'm not overly committed to these views, just wanted to add something)

FLBiker

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Re: What do you think of adding a low% of crypto allocation
« Reply #345 on: October 27, 2021, 09:44:14 AM »
You should see how hard Interactive Brokers is pushing crypto. Giant quote tables appear on your main screen. Messages appear in your inbox. Emails are sent weekly. The message is, "you're missing out and this investment is totally legitimate - on par with index funds!". If it all comes crashing down, expect class action lawsuits.

It feels like end-stage pyramid scheme/MLM stuff, where there aren't many investors/suckers left so you have to try harder and harder to rope more in.

-W

Paypal too.  I just received some money from my dad and got this message: "Did you know your money can now do even more in PayPal?  Buy, sell, and hold crypto right from your PayPal Balance account."  Feels like the cab driver giving me stock tips...


clarkfan1979

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Re: What do you think of adding a low% of crypto allocation
« Reply #346 on: October 27, 2021, 10:20:31 AM »
I've been following this thread since it began. I have read every single post. However, I haven't read every single word of every single post. When someone starts saying the same thing again, I tend to scroll to the bottom, looking for new information.

From my perspective, the pro-crypto side lacks consistency. It's all over the place. I'm less convinced.

From the anti-crypto side, there tends to be more consistency and logic.

This doesn't mean one side is right and one side is wrong. Maybe one side consists of better communicators? That is possible. I sometimes have great ideas, but do a poor job of explaining them.

We have beaten this topic to death, but I would like to attempt to add or expand on a topic that should get more attention. It seems like 90% of the discussions for pro-crypto are based on the technology alone. As a Social Psychologist, let's not forget the behavioral component of holding an investment. As many of you know, I love real estate. However, in 2002-2006, we had a large increase in unqualified buyers. The end result was a real estate crash, even though the asset itself was fundamentally correct. They were not poorly built houses that were falling down. The flaw was the people who owned them and their behavior.

This is not a knock on the people on this forum. This applies more to people outside of this forum. When I look at the people who own bitcoin and other types of crypto, it scares the shit out of me.

For example, I have a family member that believes he owns more than a million dollars in crypto. They want to make an offer on 2-3 million dollar house with the crypto. The real estate agent suggested that they convert their crypto into real U.S. currency and then make the offer in U.S. currency. The family member then comes up with really confusing explanations on why this is not possible. They get upset and blast others for "not understanding crypto"

ChpBstrd

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Re: What do you think of adding a low% of crypto allocation
« Reply #347 on: October 27, 2021, 10:25:50 AM »
Has anyone said this before?

No matter how many ponzi schemes I invest in, I am not diversifying my portfolio.

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #348 on: October 27, 2021, 10:51:07 AM »
I've been following this thread since it began. I have read every single post. However, I haven't read every single word of every single post. When someone starts saying the same thing again, I tend to scroll to the bottom, looking for new information.

From my perspective, the pro-crypto side lacks consistency. It's all over the place. I'm less convinced.

From the anti-crypto side, there tends to be more consistency and logic.

This doesn't mean one side is right and one side is wrong. Maybe one side consists of better communicators? That is possible. I sometimes have great ideas, but do a poor job of explaining them.

We have beaten this topic to death, but I would like to attempt to add or expand on a topic that should get more attention. It seems like 90% of the discussions for pro-crypto are based on the technology alone. As a Social Psychologist, let's not forget the behavioral component of holding an investment. As many of you know, I love real estate. However, in 2002-2006, we had a large increase in unqualified buyers. The end result was a real estate crash, even though the asset itself was fundamentally correct. They were not poorly built houses that were falling down. The flaw was the people who owned them and their behavior.

This is not a knock on the people on this forum. This applies more to people outside of this forum. When I look at the people who own bitcoin and other types of crypto, it scares the shit out of me.

For example, I have a family member that believes he owns more than a million dollars in crypto. They want to make an offer on 2-3 million dollar house with the crypto. The real estate agent suggested that they convert their crypto into real U.S. currency and then make the offer in U.S. currency. The family member then comes up with really confusing explanations on why this is not possible. They get upset and blast others for "not understanding crypto"

probably thinks he avoids the taxes he should be paying on his gains by using it to buy the house b/c its money right -

solon

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Re: What do you think of adding a low% of crypto allocation
« Reply #349 on: October 27, 2021, 11:10:21 AM »
I've been following this thread since it began. I have read every single post. However, I haven't read every single word of every single post. When someone starts saying the same thing again, I tend to scroll to the bottom, looking for new information.

From my perspective, the pro-crypto side lacks consistency. It's all over the place. I'm less convinced.

From the anti-crypto side, there tends to be more consistency and logic.

This doesn't mean one side is right and one side is wrong. Maybe one side consists of better communicators? That is possible. I sometimes have great ideas, but do a poor job of explaining them.

We have beaten this topic to death, but I would like to attempt to add or expand on a topic that should get more attention. It seems like 90% of the discussions for pro-crypto are based on the technology alone. As a Social Psychologist, let's not forget the behavioral component of holding an investment. As many of you know, I love real estate. However, in 2002-2006, we had a large increase in unqualified buyers. The end result was a real estate crash, even though the asset itself was fundamentally correct. They were not poorly built houses that were falling down. The flaw was the people who owned them and their behavior.

This is not a knock on the people on this forum. This applies more to people outside of this forum. When I look at the people who own bitcoin and other types of crypto, it scares the shit out of me.

For example, I have a family member that believes he owns more than a million dollars in crypto. They want to make an offer on 2-3 million dollar house with the crypto. The real estate agent suggested that they convert their crypto into real U.S. currency and then make the offer in U.S. currency. The family member then comes up with really confusing explanations on why this is not possible. They get upset and blast others for "not understanding crypto"

What do you mean he "believes" he owns? Is he not sure? Ownership should be pretty easy to know.