Author Topic: What do you think of adding a low% of crypto allocation  (Read 83136 times)

maizefolk

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Re: What do you think of adding a low% of crypto allocation
« Reply #300 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 #301 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 #302 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 #303 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 #304 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 #305 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 #306 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 #307 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 #308 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 #309 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 #310 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 #311 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 #312 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 #313 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 #314 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 #315 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 #316 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 #317 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 #318 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 #319 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 #320 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 #321 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. 


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Re: What do you think of adding a low% of crypto allocation
« Reply #322 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.

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Re: What do you think of adding a low% of crypto allocation
« Reply #323 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 #324 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 #325 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.

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Re: What do you think of adding a low% of crypto allocation
« Reply #326 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 #327 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 #328 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 #329 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 #330 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 #331 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 #332 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 #333 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 #334 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 #335 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.

clarkfan1979

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Re: What do you think of adding a low% of crypto allocation
« Reply #336 on: October 27, 2021, 11:29:01 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.

It's fake crypto that is not worth anything. Literally zero. He fell for a scam but is in denial. He owns it. He believes it to be worth over one million. It's actually worth zero.

I'm guessing some random guy in India created a website claiming to sell "the new crypto". He probably posts the price and artificially increases the price every few months on his website. It always goes up. You just send him a few thousand dollars and you will be worth millions in a few short months. The problem is that if you ever try to cash out your crypto, it cannot be exchanged for real money. You just need to convince someone else to accept it as real currency. 

According to him, everyone else is an idiot because they will not accept his crypto for real currency. The conversations are incredibly bizarre.

 


JohnnyZ

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Re: What do you think of adding a low% of crypto allocation
« Reply #337 on: October 27, 2021, 11:31:47 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.

I for one have found this thread very interesting, though probably no one has changed their mind, but there was some interesting discussion and from the crypto side, even if I don't find they very persuasive, finally some actual arguments instead of "I made so much money LMAO have fun staying poor" and "if you're against crypto you don't understand it" the same few posters contributed in previous threads.


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"

 Maybe they can buy something in El Salvador instead?
 Seriously though, this is not about "understanding crypto"; why would the seller accept when they don't even know how much they'll get? It could be up or down 20% before they're even done with the papers.

BicycleB

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Re: What do you think of adding a low% of crypto allocation
« Reply #338 on: October 27, 2021, 11:32:29 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.

Maybe it's in one of these companies that is lending "your" BTC to several borrowers, but you have to buy in from a non-US address because <reasons>, with the unspoken reason that the firm can't legally operate in the US? And the practical one that you sent your original investment out using a fake non-US computer address, now you have no ability to compel its return?

I think I've read that getting your money out of those is tricky.

dandarc

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Re: What do you think of adding a low% of crypto allocation
« Reply #339 on: October 27, 2021, 11:54:25 AM »
Lost a decade long friendship because I tried to smile and nod, but just couldn't for too long and told a guy exactly what I thought of his day-trading Dogecoin scheme - that coin is pretty stupid, but not nearly the most stupid coin out there. Also found myself unable to ignore him when he escalated to mining and was lying about the price of electricity in our city. So much of this stuff is obviously a scam. Guaranteed 10% per day returns. Your chosen platform's website is one page with no details at all? C'mon man. This is an unregulated space and the hype this time around is all people who still don't understand the technology in the slightest but are experiencing big time FOMO.

And I had this written up yesterday much lengthier - but as an anti-crypto person, I have absolutely nothing to prove. This is just another thing in the sea of ideas that might become something worthwhile or more likely will prove to be nothing of consequence ever. If I'm wrong, I'll benefit via my index funds all the same. With a side bonus of being able to benefit from almost anything else that becomes as huge as the pro-crypto crowd claims this will be. All without having to waste a minute thinking about it (I'm still working on actually doing this last part, but at least I know I don't have any reason to think about this). I might bring up some points on why not to get into crypto because, as with any investment and particularly with one that is very new to you, and even more particularly with one that is very new to pretty much everyone, you should be starting from a place of deep skepticism.

Pro-crypto crowd, on the other hand, actually needs to really prove the case because they're the ones making the outlandish claim and trying to convince people to buy into this stuff. And super important to make a good case right now because you really need those greater fools if you want to exchange your crypto for anything useful. So far, the arguments are just not very convincing, particularly to those of us who got to hear all of them back in 2018 or whenever that last big BTC runup happened, and the time before that.
« Last Edit: October 27, 2021, 12:01:23 PM by dandarc »

clarkfan1979

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Re: What do you think of adding a low% of crypto allocation
« Reply #340 on: October 27, 2021, 12:17:05 PM »
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.


I for one have found this thread very interesting, though probably no one has changed their mind, but there was some interesting discussion and from the crypto side, even if I don't find they very persuasive, finally some actual arguments instead of "I made so much money LMAO have fun staying poor" and "if you're against crypto you don't understand it" the same few posters contributed in previous threads.


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"

 Maybe they can buy something in El Salvador instead?
 Seriously though, this is not about "understanding crypto"; why would the seller accept when they don't even know how much they'll get? It could be up or down 20% before they're even done with the papers.


It's not real. It's fake and it's a scam. Someone created a fake website with fake crypto and sells it to conspiracy theory followers that have a poor understanding of economics.

I am obviously doing a poor job of explaining myself. For that, I apologize.

Here is my best analogy.

Please send me $2,000 in U.S. currency and I will send you $2,000 in my crypto currency. I guarantee you that it will be worth $80,000 in two months. However, you can never actually collect real money from me. Then I go off and list a bunch of excuses.


MustacheAndaHalf

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Re: What do you think of adding a low% of crypto allocation
« Reply #341 on: October 27, 2021, 12:24:46 PM »
It's fake crypto that is not worth anything. Literally zero. He fell for a scam but is in denial. He owns it. He believes it to be worth over one million. It's actually worth zero.
... The problem is that if you ever try to cash out your crypto, it cannot be exchanged for real money. You just need to convince someone else to accept it as real currency. 
Is the fake crypto he bought on this list of 6800+ crypto currencies?
https://coinmarketcap.com/

That's the angle I would use to pressure his belief.  If this crypto has been so profitable, why isn't it on the list with 6800 other crypto currencies?  Some of those have gone up +1000% as well, so the special returns are no reason to keep it off the list.


You could also ask "which crypto exchange do you use?", or ask him to look up the crypto exchange himself, on this list of 300:
https://coinmarketcap.com/rankings/exchanges/

Almost all of those exchanges have a market called "BTCUSDT" - the most popular market by far.  As a buyer, you pay USDT and buy BTC.  As a seller, you sell BTC and get USDT.  Almost every crypto exchange will have USDT.  Which means this guy should be able to sell his crypto for USDT.  If it's a scam, there will be no way to trade his crypto for USDT.  It's a really bad sign if he can't convert his crypto holdings into USDT.

(International crypto exchanges aren't allowed to transact in USD.  The U.S. Treasury Department will come after them with anti-money laundering rules, and can force their bank to drop them.  Banks do not want to be sanctioned by the U.S. - they can be dropped off the international banking system.  But those rules don't apply to USDT, so crypto exchanges use that, instead)

clarkfan1979

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Re: What do you think of adding a low% of crypto allocation
« Reply #342 on: October 27, 2021, 01:54:52 PM »
It's fake crypto that is not worth anything. Literally zero. He fell for a scam but is in denial. He owns it. He believes it to be worth over one million. It's actually worth zero.
... The problem is that if you ever try to cash out your crypto, it cannot be exchanged for real money. You just need to convince someone else to accept it as real currency. 
Is the fake crypto he bought on this list of 6800+ crypto currencies?
https://coinmarketcap.com/

That's the angle I would use to pressure his belief.  If this crypto has been so profitable, why isn't it on the list with 6800 other crypto currencies?  Some of those have gone up +1000% as well, so the special returns are no reason to keep it off the list.


You could also ask "which crypto exchange do you use?", or ask him to look up the crypto exchange himself, on this list of 300:
https://coinmarketcap.com/rankings/exchanges/

Almost all of those exchanges have a market called "BTCUSDT" - the most popular market by far.  As a buyer, you pay USDT and buy BTC.  As a seller, you sell BTC and get USDT.  Almost every crypto exchange will have USDT.  Which means this guy should be able to sell his crypto for USDT.  If it's a scam, there will be no way to trade his crypto for USDT.  It's a really bad sign if he can't convert his crypto holdings into USDT.

(International crypto exchanges aren't allowed to transact in USD.  The U.S. Treasury Department will come after them with anti-money laundering rules, and can force their bank to drop them.  Banks do not want to be sanctioned by the U.S. - they can be dropped off the international banking system.  But those rules don't apply to USDT, so crypto exchanges use that, instead)

"It's a really bad sign if he can't convert his crypto holdings into USDT."

I agree that it is a really bad sign. There is no exchange. It's a fake website with a fake currency. I immediately realized that it was a scam. He was in denial. He just blamed everyone else for "not understanding crypto"

It's now one year later and he hasn't mentioned it. It's possible that he realized that he lost all his money to a scam. He doesn't want to talk about it because it's embarrassing and that is understandable.

The bigger part that is super embarrassing that he doesn't realize is when he gives the hard sell to the real estate agent to use his 1 million of "crypto" to buy a 2-3 million dollar house. It's the equivalent of offering monopoly money for the house. When the realtor won't even put their name on it, they blame the realtor. They just don't understand monopoly money.

I'm not pressing him for any details. I've heard enough of this crap over the past 5 years. It's not possible for him to realize that these are scams because he is so invested in conspiracy theories. Unfortunately, his group is a pretty easy target on the internet for scams. People make a living taking money from these people. 

 

maizefolk

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Re: What do you think of adding a low% of crypto allocation
« Reply #343 on: October 27, 2021, 05:16:55 PM »
Pro-crypto crowd, on the other hand, actually needs to really prove the case because they're the ones making the outlandish claim and trying to convince people to buy into this stuff.

Just to clarify, you can be pro-crypto and not think it makes sense an investment (I also don't think turkish lira, japanese yen, or gold coins make sense as investments).

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #344 on: October 27, 2021, 05:25:21 PM »
Pro-crypto crowd, on the other hand, actually needs to really prove the case because they're the ones making the outlandish claim and trying to convince people to buy into this stuff.

Just to clarify, you can be pro-crypto and not think it makes sense an investment (I also don't think turkish lira, japanese yen, or gold coins make sense as investments).

I'd agree with this statement. I think the underlying tech has a future. I don't think BTC does eth might but not enough for me to buy any. Just like I don't buy individual stocks. Or invest in ultra specific market sectors.

The whole financial world could run on Blockchain some day that doesn't mean BTC has to exist for that.

dandarc

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Re: What do you think of adding a low% of crypto allocation
« Reply #345 on: October 27, 2021, 05:55:10 PM »
Fair point - we are in a thread about allocating a portion of your portfolio to crypto currency, but I didn't write out "pro direct ownership of crypto crowd".

dandarc

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Re: What do you think of adding a low% of crypto allocation
« Reply #346 on: October 27, 2021, 06:03:06 PM »
Pro-crypto crowd, on the other hand, actually needs to really prove the case because they're the ones making the outlandish claim and trying to convince people to buy into this stuff.

Just to clarify, you can be pro-crypto and not think it makes sense an investment (I also don't think turkish lira, japanese yen, or gold coins make sense as investments).

I'd agree with this statement. I think the underlying tech has a future. I don't think BTC does eth might but not enough for me to buy any. Just like I don't buy individual stocks. Or invest in ultra specific market sectors.

The whole financial world could run on Blockchain some day that doesn't mean BTC has to exist for that.
Or any other crypto currency - there might be something to the underlying tech (emphasis on might) but crypto currency - this particular application of that technology is a solution looking for a problem. But the IBM private Blockchain is not as sexy as the brand new casino.

js82

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Re: What do you think of adding a low% of crypto allocation
« Reply #347 on: October 27, 2021, 06:09:29 PM »
It's fake crypto that is not worth anything. Literally zero. He fell for a scam but is in denial. He owns it. He believes it to be worth over one million. It's actually worth zero.
... The problem is that if you ever try to cash out your crypto, it cannot be exchanged for real money. You just need to convince someone else to accept it as real currency. 
Is the fake crypto he bought on this list of 6800+ crypto currencies?
https://coinmarketcap.com/

That's the angle I would use to pressure his belief.  If this crypto has been so profitable, why isn't it on the list with 6800 other crypto currencies?  Some of those have gone up +1000% as well, so the special returns are no reason to keep it off the list.


You could also ask "which crypto exchange do you use?", or ask him to look up the crypto exchange himself, on this list of 300:
https://coinmarketcap.com/rankings/exchanges/

Almost all of those exchanges have a market called "BTCUSDT" - the most popular market by far.  As a buyer, you pay USDT and buy BTC.  As a seller, you sell BTC and get USDT.  Almost every crypto exchange will have USDT.  Which means this guy should be able to sell his crypto for USDT.  If it's a scam, there will be no way to trade his crypto for USDT.  It's a really bad sign if he can't convert his crypto holdings into USDT.

(International crypto exchanges aren't allowed to transact in USD.  The U.S. Treasury Department will come after them with anti-money laundering rules, and can force their bank to drop them.  Banks do not want to be sanctioned by the U.S. - they can be dropped off the international banking system.  But those rules don't apply to USDT, so crypto exchanges use that, instead)

For the sake of pointing it out: Just because it's on CoinMarketCap doesn't mean it's not a scam.  There's a bunch of garbage that's listed on there that's basically a bunch of dudes saying "let's make a coin from some open source code, hype it on reddit/social media to sucker people in, get the price to go up, and then we can cash out".  I'd go so far as to say that *most* of these coins will eventually be worthless (and a non-trivial number are outright scams), but there will be a handful of genuine ones that survive to become important/impactful beyond an investment tool.


Just to clarify, you can be pro-crypto and not think it makes sense an investment (I also don't think turkish lira, japanese yen, or gold coins make sense as investments).

Agreed.  And FWIW, crypto is pretty clearly not a good investment once the adoption cycle winds down - just like cash is trash, so will be crypto once rising demand stops driving prices.  I see Crypto as interesting in the near to mid term, useless(as an asset class, not a technology) in the long term.

ChpBstrd

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Re: What do you think of adding a low% of crypto allocation
« Reply #348 on: October 27, 2021, 08:42:50 PM »
I'm not pressing him for any details. I've heard enough of this crap over the past 5 years. It's not possible for him to realize that these are scams because he is so invested in conspiracy theories. Unfortunately, his group is a pretty easy target on the internet for scams. People make a living taking money from these people. 

People are just going to have to wise up or get wiped out. Hundreds of thousands of Americans have just lost their lives to COVID, after vaccines became available, because they believed social media influencers over doctors, scientists, and public health experts. Millions more will suffer long COVID or disability. People are sitting in jail right now because they believed online nonsense and committed some act of violence or fraud. Now you have people putting everything into this hybrid ponzi / MLM coin scam because it keeps attracting marks and all the influencers are making (monetized) videos about it. If you wouldn't take stock-picking advice from Wall Street Bets, and you wouldn't take healthcare advice from Dr. Fucking Oz, and you're not doing the latest TikTok challenge that involves huffing WD-40 and trying to run down the street or whatever, then WTF would you let social media / media influence you to buy something that is both worthless and useless??? It's. All. The. Same. Gullibility.

Literal death and the loss of one's fortune is the price of believing disinformation on the internet. Wise up or die. Only the skeptical will survive in the 21st century.

FrugalFukuoka

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Re: What do you think of adding a low% of crypto allocation
« Reply #349 on: October 27, 2021, 11:52:59 PM »
I'm not pressing him for any details. I've heard enough of this crap over the past 5 years. It's not possible for him to realize that these are scams because he is so invested in conspiracy theories. Unfortunately, his group is a pretty easy target on the internet for scams. People make a living taking money from these people. 

People are just going to have to wise up or get wiped out. Hundreds of thousands of Americans have just lost their lives to COVID, after vaccines became available, because they believed social media influencers over doctors, scientists, and public health experts. Millions more will suffer long COVID or disability. People are sitting in jail right now because they believed online nonsense and committed some act of violence or fraud. Now you have people putting everything into this hybrid ponzi / MLM coin scam because it keeps attracting marks and all the influencers are making (monetized) videos about it. If you wouldn't take stock-picking advice from Wall Street Bets, and you wouldn't take healthcare advice from Dr. Fucking Oz, and you're not doing the latest TikTok challenge that involves huffing WD-40 and trying to run down the street or whatever, then WTF would you let social media / media influence you to buy something that is both worthless and useless??? It's. All. The. Same. Gullibility.

Literal death and the loss of one's fortune is the price of believing disinformation on the internet. Wise up or die. Only the skeptical will survive in the 21st century.

https://www.rationaloptimist.com/ ;)

It looks like the discussion is derailing a bit into an argument about a new invention called the bicycle that is supposedly a great boat by it's proponents which is vehemently denied by it's opponents saying it will sink like a rock. We'll have some really smart and creative people explain how a contraption with the bicycle on top could potentially power the boat and therefore justify the utility of the bicycle, which naturally will be 'too complicated' to understand by intelligent opponents who really try to understand it all but cannot see how this would possibly be better than a paddle. In the meanwhile there is a small group of people seeing the bicycle for what it is, a great tool for transport on land.

Digital tokens, blockchain technology, smart contracts, they all have great potential to make our lives easier, but they do not all mean BTC and the only use case is not limited to 'digital currency'. Firstly, if you're not aware what each part is, and it's potential utility, read up on those separately (preferably outside of the context of BTC ).

Secondly, if we do want to have an argument what drives the price of a cryptocurrency, let's dive in systematically: just like any other financial asset it's driven by buyers and sellers who make trading decisions. As predominantly index investors we probably all know this to be emotional in the short term, enter your favorite Warren Buffet or Benjamin Graham quote. Luckily for an asset class such as equity this gets dampened over time as there is some real undeniable activity (or lack thereof) represented by the token (stock) you buy or sell. With a cryptocurrency, it's true that a lot of it's owners do not fully grasp the utility thereof, proving a lot of the opponents in this thread right that it tends to be a pump and dump scheme. Look at the volatility of BTC and read twitter, and the pump and dump is so transparent you wonder who would possibly fall for this.
Which brings us to the next point, aside from just popularity keeping the price from going to 0 frequently, what is the reason behind BTC and ETH, and other more accepted cryptocurrencies having an increasingly higher bottom? That is some form of utility. Whether in the case of BTC that utility is the decentralized nature of transferring value, or it's volatility by itself, or any other of a myriad of reasons, is all very debatable; but one thing that is increasingly clear is that the concept and underlying technology are persistent.
So lastly, why invest in BTC or ETH or other cryptocurrencies?
1. The volatility, if properly risk managed by e.g. assigning only a low allocation, can increase portfolio performance
2. The correlation to other asset classes can contribute in terms of diversification
3. The project that will see widespread adoption in the real world will likely see the value of it's associated tokens increase by a many-fold

And why not invest? The same reasons, it's volatile, you can find diversification in lower risk products, and you don't necessarily want to follow a Taleb style portfolio of 90% security and 10% high risk high return. Fair enough.