Prove Me Wrong: Cryptocurrencies are NOT good investments

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March2009
Posts: 76
Joined: Sat Mar 21, 2020 7:04 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by March2009 »

HanSolo

[/quote]

If the consensus is that it's good to have options, then we should look forward to a future when there's as many coin varieties as there are ETFs today... or even more.

But there's that fly in the ointment... those who are trying to capture massive gains in one particular coin might not do so well if the market becomes widely diverse.

Suddenly, the beauty of having options becomes less beautiful... for some.
[/quote]

Bingo! :sharebeer
In bear markets, stocks return to their rightful owners. - J.P. Morgan
ballons
Posts: 782
Joined: Sun Aug 18, 2019 3:05 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by ballons »

claypigeon wrote: Wed May 05, 2021 10:08 pm
ballons wrote: Wed May 05, 2021 6:30 pm
claypigeon wrote: Wed May 05, 2021 5:20 pm...
Apologies if my post was unclear. You get paid as the middleman to delegate your crypto so others transactions can be validated. You also pay about 25 cents last I checked ( as it’s a flat 0.16 coin fee based on the crypto’s worth) which can be lowered and will once scaled, to transact yourself. ...
I don't want to pay 25 cents to a middleman. How do I get rid of crypto middlemen, including any premiums, to bring that to $0.00?
Develop a more efficient coin. Ultimately there’s some theoretical cost with any transaction. But much cheaper for the cost to be the actual transaction cost than the transaction cost plus a brick and mortar bank plus an ACH system plus salaries and employees and pensions and bailouts, etc. Somehow with 0.1% interest and making a profit elsewhere, banks still get away with these fees. My hope is at minimum defi forces brick and mortar banks to cut their ridiculous fees. Become more like vanguard/ fidelity/ Ameritrade and offer subsidized free trades making up the cost in other areas
I don't want more efficient crypto middlemen. I don't want any crypto middlemen. Is that possible?
av111
Posts: 250
Joined: Mon Jan 26, 2015 1:27 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by av111 »

So serious question - what is the agreement after 13 pages

1. Does any of the coins (BTC, DOGE, ETH) that are rising up so fast, report quarterly Book value, revenue and profits?
2. Are the coins likely to replace gold as an alternate universal store of value
3. Are any of these coins likely to replace USD as a standard currency of the world

If not, would you not be always looking for the first sign of trouble to dump and run back to USD?

If yes, I should lump sum move into one of the coins or a diversified basket of coins
AV111
ballons
Posts: 782
Joined: Sun Aug 18, 2019 3:05 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by ballons »

Freefun wrote: Thu May 06, 2021 2:20 pm
YRT70 wrote: Thu May 06, 2021 2:11 pm
Freefun wrote: Thu May 06, 2021 2:09 pm The potential for blockchain is enormous and much of it is not specific to finance - it can disrupt almost any industry.
What are the top other uses than finance?
Healthcare
Entertainment / Media
Supply Chain / T&L
Retail / E-Commerce
Energy
Government / Public Sector / Defense
Construction
Real Estate
I only see disruption with finance and even that isn't assured considering you still can't buy a pizza with crypto easily. The rest are just improving efficiencies and automation via blockchain. Index investing would capture that vs chasing speculative dog coins.
langlands
Posts: 1060
Joined: Wed Apr 03, 2019 10:05 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by langlands »

av111 wrote: Thu May 06, 2021 3:50 pm So serious question - what is the agreement after 13 pages

1. Does any of the coins (BTC, DOGE, ETH) that are rising up so fast, report quarterly Book value, revenue and profits?
2. Are the coins likely to replace gold as an alternate universal store of value
3. Are any of these coins likely to replace USD as a standard currency of the world

If not, would you not be always looking for the first sign of trouble to dump and run back to USD?

If yes, I should lump sum move into one of the coins or a diversified basket of coins
Certainly, there's no consensus and there's unlikely to ever be a consensus.

1. Look into ETH and Defi. I assume you know that cryptocurrencies will never "report" quarterly book value, revenue, or profits. They're not registered companies. But ETH is the leader in terms of being a value creation engine.

2. Most likely candidates are BTC, LTC, maybe even DOGE to eat into gold's market cap. Replacement is a bit strong. It seems natural that there would be an equilibrium containing both a physical and digital store of value.

3. Unlikely in my opinion.

It's a speculative investment space. Treat it like any other speculative investment class. For most bogleheads, I guess that would mean ignoring it, but I personally think a diversified portfolio of speculative investments is a good complement to a more traditional portfolio.

I see this notion that either crypto will fail, or crypto will succeed and it will eventually be in an index anyway so there's nothing for me to do. This is pretty weak logic. The point of course is that by the time crypto is represented at market weight within the S&P 500, the opportunity for outsized gains is long past.
Last edited by langlands on Thu May 06, 2021 4:09 pm, edited 1 time in total.
EnjoyIt
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Joined: Sun Dec 29, 2013 8:06 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

I think we are in a bit of an equities bubble, but I'm not doing anything about it.

For all the crypto fans, do any of you think we are in a crypto bubble right now considering how fast bitcoin, ETH, and DOGE have risen? I realize, just because we are in a bubble does not mean we should change our AA or our investing philosophy. Just curious on people's thoughts.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
x3sphere
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by x3sphere »

EnjoyIt wrote: Thu May 06, 2021 4:08 pm I think we are in a bit of an equities bubble, but I'm not doing anything about it.

For all the crypto fans, do any of you think we are in a crypto bubble right now considering how fast bitcoin, ETH, and DOGE have risen? I realize, just because we are in a bubble does not mean we should change our AA or our investing philosophy. Just curious on people's thoughts.
yes. Crypto has always be cyclical and I don't this run will be any different. As someone who was in the market since 2013 I'd guess we are around the mid-point right now. I started taking profits on some of my positions but still holding 80%. Not timing the market but just rebalancing mostly since crypto is a huge portion of my portfolio now.
txhill
Posts: 626
Joined: Tue Mar 16, 2021 12:27 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

av111 wrote: Thu May 06, 2021 3:50 pm So serious question - what is the agreement after 13 pages

1. Does any of the coins (BTC, DOGE, ETH) that are rising up so fast, report quarterly Book value, revenue and profits?
2. Are the coins likely to replace gold as an alternate universal store of value
3. Are any of these coins likely to replace USD as a standard currency of the world

If not, would you not be always looking for the first sign of trouble to dump and run back to USD?

If yes, I should lump sum move into one of the coins or a diversified basket of coins
There is no agreement here really. But for what I think is a "balanced" response (ok a pro-crypto response):

1. No crypto "reports" anything. But ETH does generate substantial revenue from the number of transactions taking place on the network through decentralized apps, generating $716 million in transaction revenue in April 2021. That's comparable to the revenue generated by AWS back in 2015. These transaction fees currently are paid to miners, but once ETH 2.0 is live, that value instead will accrue to ETH holders. https://www.theblockcrypto.com/data/on- ... s/ethereum Coins like BTC and DOGE do not generate much revenue themselves (and none that will accrue to coin owners, only to miners) but can easily be lent out to earn interest, just like you'd do with a bond.

2. Unknown, but BTC has the strongest hold on the store of value narrative and, based on gold's recent performance, BTC seems to be eating gold's lunch. DOGE operates on similar principles as BTC though so no one knows who will prevail as a store of value, but there is a high demand for a digital store of value. Agree with other poster that demand for gold will never go to zero.

3. Unlikely in my view, although some may disagree. Central banks (including the U.S.) will produce their own digital cryptocurrencies that will be used as standard currencies. It is unlikely that the standard monetary system would be purely decentralized due to the limitations such a system would impose on governments.
EnjoyIt
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

txhill wrote: Thu May 06, 2021 4:45 pm ...
2. Unknown, but BTC has the strongest hold on the store of value narrative and, based on gold's recent performance, BTC seems to be eating gold's lunch. DOGE operates on similar principles as BTC though so no one knows who will prevail as a store of value, but there is a high demand for a digital store of value. Agree with other poster that demand for gold will never go to zero.
....
Clipped quote for just this topic.

Do you believe this run up is because people believe in BTC/DOGE as the future or do you think it is a speculative frenzy, or a combination of the two. I will assume it is a combination of the two, what percent do you think is speculative? I purposefully left ETH and other coins out of the question as they have some utility.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
txhill
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

EnjoyIt wrote: Thu May 06, 2021 5:04 pm
txhill wrote: Thu May 06, 2021 4:45 pm ...
2. Unknown, but BTC has the strongest hold on the store of value narrative and, based on gold's recent performance, BTC seems to be eating gold's lunch. DOGE operates on similar principles as BTC though so no one knows who will prevail as a store of value, but there is a high demand for a digital store of value. Agree with other poster that demand for gold will never go to zero.
....
Clipped quote for just this topic.

Do you believe this run up is because people believe in BTC/DOGE as the future or do you think it is a speculative frenzy, or a combination of the two. I will assume it is a combination of the two, what percent do you think is speculative? I purposefully left ETH and other coins out of the question as they have some utility.
It's a lot of things. For BTC, it's a combo of (1) greater recognition and acceptance of it as a store of value, especially by institutional investors, (2) supply shock that comes with halving events every 4 years, and (3) speculative frenzy. I have no idea how to quantify how much is speculative frenzy but I actually don't think it's that much just yet, given how much more price action there has been in altcoins. I suspect BTC has a lot more room to run if we continue to see adoption trends.

For DOGE, it's (1) the meme economy and (2) speculative frenzy. The first part is the same thing driving GME. And a lot of it is speculative frenzy, I'm guessing. But it is really hard to guess how much of each, and it is hard to guess how resilient the meme effect is. I never would have guessed GME to have stuck at $150+ for this long, so I just don't know. I'm not touching DOGE myself.
Freefun
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Freefun »

ballons wrote: Thu May 06, 2021 4:04 pm
Freefun wrote: Thu May 06, 2021 2:20 pm
YRT70 wrote: Thu May 06, 2021 2:11 pm
Freefun wrote: Thu May 06, 2021 2:09 pm The potential for blockchain is enormous and much of it is not specific to finance - it can disrupt almost any industry.
What are the top other uses than finance?
Healthcare
Entertainment / Media
Supply Chain / T&L
Retail / E-Commerce
Energy
Government / Public Sector / Defense
Construction
Real Estate
I only see disruption with finance and even that isn't assured considering you still can't buy a pizza with crypto easily. The rest are just improving efficiencies and automation via blockchain. Index investing would capture that vs chasing speculative dog coins.
For all the millions of blockchain investments, pizza delivery isn’t a high priority. There is however a Bitcoin pizza holiday.

https://www.coindesk.com/bitcoin-pizza- ... lo-hanyecz
Remember when you wanted what you currently have?
Hustlinghustling
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Hustlinghustling »

langlands wrote: Thu May 06, 2021 4:05 pm
I see this notion that either crypto will fail, or crypto will succeed and it will eventually be in an index anyway so there's nothing for me to do. This is pretty weak logic. The point of course is that by the time crypto is represented at market weight within the S&P 500, the opportunity for outsized gains is long past.
side thought... I know there’s just no better way to do it, but the mechanism of indexing in this sense is the worst form of performance chasing. always buying high and selling low
ballons
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by ballons »

Freefun wrote: Thu May 06, 2021 5:23 pm
ballons wrote: Thu May 06, 2021 4:04 pm
Freefun wrote: Thu May 06, 2021 2:20 pm
YRT70 wrote: Thu May 06, 2021 2:11 pm
Freefun wrote: Thu May 06, 2021 2:09 pm The potential for blockchain is enormous and much of it is not specific to finance - it can disrupt almost any industry.
What are the top other uses than finance?
Healthcare
Entertainment / Media
Supply Chain / T&L
Retail / E-Commerce
Energy
Government / Public Sector / Defense
Construction
Real Estate
I only see disruption with finance and even that isn't assured considering you still can't buy a pizza with crypto easily. The rest are just improving efficiencies and automation via blockchain. Index investing would capture that vs chasing speculative dog coins.
For all the millions of blockchain investments, pizza delivery isn’t a high priority. There is however a Bitcoin pizza holiday.

https://www.coindesk.com/bitcoin-pizza- ... lo-hanyecz
Bitcoin as digital gold, or a store of value to accumulate and hold for the long term, has proven more attractive than commerce, as a pair of recent events underscore.
“It was a really interesting system but nobody’s using it,” he said. “If nobody’s using it, it doesn’t matter if I have it all.”
The warnings are there.
EnjoyIt
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Joined: Sun Dec 29, 2013 8:06 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

txhill wrote: Thu May 06, 2021 5:10 pm
EnjoyIt wrote: Thu May 06, 2021 5:04 pm
txhill wrote: Thu May 06, 2021 4:45 pm ...
2. Unknown, but BTC has the strongest hold on the store of value narrative and, based on gold's recent performance, BTC seems to be eating gold's lunch. DOGE operates on similar principles as BTC though so no one knows who will prevail as a store of value, but there is a high demand for a digital store of value. Agree with other poster that demand for gold will never go to zero.
....
Clipped quote for just this topic.

Do you believe this run up is because people believe in BTC/DOGE as the future or do you think it is a speculative frenzy, or a combination of the two. I will assume it is a combination of the two, what percent do you think is speculative? I purposefully left ETH and other coins out of the question as they have some utility.
It's a lot of things. For BTC, it's a combo of (1) greater recognition and acceptance of it as a store of value, especially by institutional investors, (2) supply shock that comes with halving events every 4 years, and (3) speculative frenzy. I have no idea how to quantify how much is speculative frenzy but I actually don't think it's that much just yet, given how much more price action there has been in altcoins. I suspect BTC has a lot more room to run if we continue to see adoption trends.

For DOGE, it's (1) the meme economy and (2) speculative frenzy. The first part is the same thing driving GME. And a lot of it is speculative frenzy, I'm guessing. But it is really hard to guess how much of each, and it is hard to guess how resilient the meme effect is. I never would have guessed GME to have stuck at $150+ for this long, so I just don't know. I'm not touching DOGE myself.
I work in a pretty large establishment with a few hundred employees. Over the last few months I have witnessed several people purchase bitcoins. My response is usually a congrats and good luck type of comment. Although later when digging a little deeper, it turns out that not a single one of them had any clue just how bitcoin works, or about any of the alt coins out there and their purpose. I suspect each and every one of them didn't buy it as a store of wealth but as a speculative item they saw on TV or the internet and want a piece of it. They are looking to get lucky. I realize that my anecdotal evidence of a few people does not make a statistic although I do find it interesting.

I will also share a story I have told on here before. Back in 2017 I was out having lunch with my wife. At the restaurant I overheard what appeared to be a college kid trying to convince his parents the wonders of bitcoin. A few months later bitcoin's bubble burst and it took almost a year for it to hit its bottom in the $3,000 range. I did not realize it then, but that college kid was akin to the shoeshine boy giving stock tips. Again, this is nothing more than an anecdote.

I can clearly see a ton of irrational exuberance out there. People betting that their coins will go up while being completely indifferent about cryptos virtues. I am also very well aware that irrational exuberance can last for many years, not to mention I have yet to see/hear specific shoeshine boy comments.

My point is this: Neither Prahasaurus, yourself nor me can predict the future. It is very obvious that there is a ton of speculation and irrational exuberance out there. How this will play out in the short run is unknown, but if I was making a decent fortune on the recent run up, I would start thinking about selling some of those coins and locking in those gains, even if I thought 5-10 years from now cryptos will be dominating the financial world. I would start thinking about creating an investment policy statement, deciding on an asset allocation that includes cryptos and rebalance. This is the only rational thing to do when there is irrational exuberance out there.

If you say there is no irrational exuberance, may I please point you to DOGE or some of the NFTs recently sold. May I point you to the people who use their bitcoins as collateral to borrow and buy more bitcoins. May I point you to all the recent people who bought cryptos just because Elon Musk made a tweet.

I have no Dog in this fight (pun intended.) I don't win or lose either way. I am already financially independent and don't need to speculate to get rich.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
av111
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by av111 »

langlands wrote: Thu May 06, 2021 4:05 pm
av111 wrote: Thu May 06, 2021 3:50 pm So serious question - what is the agreement after 13 pages

1. Does any of the coins (BTC, DOGE, ETH) that are rising up so fast, report quarterly Book value, revenue and profits?
2. Are the coins likely to replace gold as an alternate universal store of value
3. Are any of these coins likely to replace USD as a standard currency of the world

If not, would you not be always looking for the first sign of trouble to dump and run back to USD?

If yes, I should lump sum move into one of the coins or a diversified basket of coins
Certainly, there's no consensus and there's unlikely to ever be a consensus.

1. Look into ETH and Defi. I assume you know that cryptocurrencies will never "report" quarterly book value, revenue, or profits. They're not registered companies. But ETH is the leader in terms of being a value creation engine.

2. Most likely candidates are BTC, LTC, maybe even DOGE to eat into gold's market cap. Replacement is a bit strong. It seems natural that there would be an equilibrium containing both a physical and digital store of value.

3. Unlikely in my opinion.

It's a speculative investment space. Treat it like any other speculative investment class. For most bogleheads, I guess that would mean ignoring it, but I personally think a diversified portfolio of speculative investments is a good complement to a more traditional portfolio.

I see this notion that either crypto will fail, or crypto will succeed and it will eventually be in an index anyway so there's nothing for me to do. This is pretty weak logic. The point of course is that by the time crypto is represented at market weight within the S&P 500, the opportunity for outsized gains is long past.
Thank you for a balanced response. I love outsized returns just like anyone else but I find that I am always behind the curve on the bleeding edge and for good reason. Most of the new ideas fail. So outsized profit is earned with outsized risk and attention. I have better ways to make money. That's why I have not bought gold in the past.

I feel there is a value argument being made for ETH. If there is a well researched work on value creation with ETH, could you please post


Do you buy at RH or coinbase?
AV111
av111
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by av111 »

txhill wrote: Thu May 06, 2021 4:45 pm
av111 wrote: Thu May 06, 2021 3:50 pm So serious question - what is the agreement after 13 pages

1. Does any of the coins (BTC, DOGE, ETH) that are rising up so fast, report quarterly Book value, revenue and profits?
2. Are the coins likely to replace gold as an alternate universal store of value
3. Are any of these coins likely to replace USD as a standard currency of the world

If not, would you not be always looking for the first sign of trouble to dump and run back to USD?

If yes, I should lump sum move into one of the coins or a diversified basket of coins
There is no agreement here really. But for what I think is a "balanced" response (ok a pro-crypto response):

1. No crypto "reports" anything. But ETH does generate substantial revenue from the number of transactions taking place on the network through decentralized apps, generating $716 million in transaction revenue in April 2021. That's comparable to the revenue generated by AWS back in 2015. These transaction fees currently are paid to miners, but once ETH 2.0 is live, that value instead will accrue to ETH holders. https://www.theblockcrypto.com/data/on- ... s/ethereum Coins like BTC and DOGE do not generate much revenue themselves (and none that will accrue to coin owners, only to miners) but can easily be lent out to earn interest, just like you'd do with a bond.

2. Unknown, but BTC has the strongest hold on the store of value narrative and, based on gold's recent performance, BTC seems to be eating gold's lunch. DOGE operates on similar principles as BTC though so no one knows who will prevail as a store of value, but there is a high demand for a digital store of value. Agree with other poster that demand for gold will never go to zero.

3. Unlikely in my view, although some may disagree. Central banks (including the U.S.) will produce their own digital cryptocurrencies that will be used as standard currencies. It is unlikely that the standard monetary system would be purely decentralized due to the limitations such a system would impose on governments.
Thanks for the balanced response and the link. Is there a good read from a well regarded financial publication that describes eth value proposition
AV111
txhill
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

EnjoyIt wrote: Thu May 06, 2021 7:58 pm I can clearly see a ton of irrational exuberance out there. People betting that their coins will go up while being completely indifferent about cryptos virtues. I am also very well aware that irrational exuberance can last for many years, not to mention I have yet to see/hear specific shoeshine boy comments.

My point is this: Neither Prahasaurus, yourself nor me can predict the future. It is very obvious that there is a ton of speculation and irrational exuberance out there. How this will play out in the short run is unknown, but if I was making a decent fortune on the recent run up, I would start thinking about selling some of those coins and locking in those gains, even if I thought 5-10 years from now cryptos will be dominating the financial world. I would start thinking about creating an investment policy statement, deciding on an asset allocation that includes cryptos and rebalance. This is the only rational thing to do when there is irrational exuberance out there.

If you say there is no irrational exuberance, may I please point you to DOGE or some of the NFTs recently sold. May I point you to the people who use their bitcoins as collateral to borrow and buy more bitcoins. May I point you to all the recent people who bought cryptos just because Elon Musk made a tweet.

I have no Dog in this fight (pun intended.) I don't win or lose either way. I am already financially independent and don't need to speculate to get rich.
I definitely see irrational exuberance in DOGE and almost every other small market cap crypto. Which probably means there's also irrational exuberance in bitcoin and ether, but I'm just blind to it :) You're entirely right that it's impossible to predict which way this goes from here, especially in the short term (meaning <2 years). I've seen just about every conceivable price target model out there for BTC and ETH and all of them just boil down to total guesswork in the short term. That said, I think it's possible to have a long term value view of both (personally I see it more for ETH but I see use cases for both). But short term volatility will be dominated by speculative hype more so than any fundamentals. We'll see a crash for sure. But when and to what degree is the tough call...
txhill
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

av111 wrote: Thu May 06, 2021 8:07 pm Thank you for a balanced response. I love outsized returns just like anyone else but I find that I am always behind the curve on the bleeding edge and for good reason. Most of the new ideas fail. So outsized profit is earned with outsized risk and attention. I have better ways to make money. That's why I have not bought gold in the past.

I feel there is a value argument being made for ETH. If there is a well researched work on value creation with ETH, could you please post


Do you buy at RH or coinbase?
I buy at Coinbase Pro, which is less user friendly than Coinbase but has lower transaction fees. I would suggest avoiding Robinhood because you can't transfer off their platform, so it will limit your ability to use your crypto for other purposes like staking, DeFi, and lending.

A well-researched work on ETH value... I can't say I have seen a reputable one yet. One could look at the triple halving report someone else linked earlier, but that paper doesn't really focus on value in a more fundamental way (it's more focused on the coming supply shock with the changes being made to ETH soon). I am waiting for James Wang to write up what he's been discussing on podcasts / tweeting about regarding deriving price models from network revenue, and will post it when he does (he says it's on the way).
langlands
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by langlands »

av111 wrote: Thu May 06, 2021 8:07 pm Thank you for a balanced response. I love outsized returns just like anyone else but I find that I am always behind the curve on the bleeding edge and for good reason. Most of the new ideas fail. So outsized profit is earned with outsized risk and attention. I have better ways to make money. That's why I have not bought gold in the past.

I feel there is a value argument being made for ETH. If there is a well researched work on value creation with ETH, could you please post


Do you buy at RH or coinbase?
I'm not the right person for that. There are people much more knowledgeable than I am about crypto and ETH. I would look up some of the posts by Prahasaurus on this forum. Another thing I will note is that due to the polarizing nature of the space, it is very rare to find a "well-researched," neutral perspective. I find that the vast majority of negative opinions are by people who are non-experts and many times have little familiarity with the technology/protocols. Take a look at what the crypto-experts have to say (Vitalik Buterin, the main founder of Ethereum, does numerous podcasts) and keep in mind their biases. In any case, many are quite open with their criticisms.

I buy at neither as I'm simply a speculator who is (at this point anyway) only interested in exposure to the asset class. I buy GBTC and ETHE in a tax-advantaged account.
Hustlinghustling
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Hustlinghustling »

HanSolo wrote: Thu May 06, 2021 3:02 pm
OK. Then DOGE should not be a problem. But as we've seen here, it's a problem for some crypto fans. Are they in favor of freedom and options? Or not?
Strange framing of the issue. You can welcome having more options without having to like all the options available. That's pretty much the point of options.
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watchnerd
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Hustlinghustling wrote: Thu May 06, 2021 9:10 pm
HanSolo wrote: Thu May 06, 2021 3:02 pm
OK. Then DOGE should not be a problem. But as we've seen here, it's a problem for some crypto fans. Are they in favor of freedom and options? Or not?
Strange framing of the issue. You can welcome having more options without having to like all the options available. That's pretty much the point of options.

I think you can be all in favor of options and still think Dogecoin is silly.
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EnjoyIt
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

txhill wrote: Thu May 06, 2021 8:21 pm
av111 wrote: Thu May 06, 2021 8:07 pm Thank you for a balanced response. I love outsized returns just like anyone else but I find that I am always behind the curve on the bleeding edge and for good reason. Most of the new ideas fail. So outsized profit is earned with outsized risk and attention. I have better ways to make money. That's why I have not bought gold in the past.

I feel there is a value argument being made for ETH. If there is a well researched work on value creation with ETH, could you please post


Do you buy at RH or coinbase?
I buy at Coinbase Pro, which is less user friendly than Coinbase but has lower transaction fees. I would suggest avoiding Robinhood because you can't transfer off their platform, so it will limit your ability to use your crypto for other purposes like staking, DeFi, and lending.

A well-researched work on ETH value... I can't say I have seen a reputable one yet. One could look at the triple halving report someone else linked earlier, but that paper doesn't really focus on value in a more fundamental way (it's more focused on the coming supply shock with the changes being made to ETH soon). I am waiting for James Wang to write up what he's been discussing on podcasts / tweeting about regarding deriving price models from network revenue, and will post it when he does (he says it's on the way).
If the above is true, wouldn’t the wise thing to do is to have an investment policy statement and keep a set asset allocation which includes cryptos. Otherwise all one is doing is speculating that price only goes up which I think we both agree is flawed especially in the short term.

Also, the fact that a joke coin like DOGE has gained so much traction in my opinion is a big risk to Bitcoin as it proves that Bitcoin can be displaced. Again, what would happen if Elon Musk made a TSLC coin and tweeted about it. Made us it so that one can buy a Tesla with it? Would that not steel market share and dilute Bitcoin’s store of value it claims to be? Maybe Bitcoin’s moat isn’t so big after all. Again, not talking about Ethereum, just Bitcoin.

Even Parahasaurus who came to this forum claiming utmost virtue in Bitcoin is now starting to have doubt and sold a good portion of it for ETH. Just something to think about.

A correction is coming. Maybe not tomorrow. Maybe not next year. But it will come and it will be huge.

EDIT: corrected us to it above
Last edited by EnjoyIt on Thu May 06, 2021 10:41 pm, edited 1 time in total.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by av111 »

EnjoyIt wrote: Thu May 06, 2021 9:35 pm
txhill wrote: Thu May 06, 2021 8:21 pm
av111 wrote: Thu May 06, 2021 8:07 pm Thank you for a balanced response. I love outsized returns just like anyone else but I find that I am always behind the curve on the bleeding edge and for good reason. Most of the new ideas fail. So outsized profit is earned with outsized risk and attention. I have better ways to make money. That's why I have not bought gold in the past.

I feel there is a value argument being made for ETH. If there is a well researched work on value creation with ETH, could you please post


Do you buy at RH or coinbase?
I buy at Coinbase Pro, which is less user friendly than Coinbase but has lower transaction fees. I would suggest avoiding Robinhood because you can't transfer off their platform, so it will limit your ability to use your crypto for other purposes like staking, DeFi, and lending.

A well-researched work on ETH value... I can't say I have seen a reputable one yet. One could look at the triple halving report someone else linked earlier, but that paper doesn't really focus on value in a more fundamental way (it's more focused on the coming supply shock with the changes being made to ETH soon). I am waiting for James Wang to write up what he's been discussing on podcasts / tweeting about regarding deriving price models from network revenue, and will post it when he does (he says it's on the way).
If the above is true, wouldn’t the wise thing to do is to have an investment policy statement and keep a set asset allocation which includes cryptos. Otherwise all one is doing is speculating that price only goes up which I think we both agree is flawed especially in the short term.

Also, the fact that a joke coin like DOGE has gained so much traction in my opinion is a big risk to Bitcoin as it proves that Bitcoin can be displaced. Again, what would happen if Elon Musk made a TSLC coin and tweeted about it. Made us so that one can buy a Tesla with it? Would that not steel market share and dilute Bitcoin’s store of value it claims to be? Maybe Bitcoin’s moat isn’t so big after all. Again, not talking about Ethereum, just Bitcoin.

Even Parahasaurus who came to this forum claiming utmost virtue in Bitcoin is now starting to have doubt and sold a good portion of it for ETH. Just something to think about.

A correction is coming. Maybe not tomorrow. Maybe not next year. But it will come and it will be huge.
Re correction, I think when fed blinks, game over. Huge buying opportunity for crypto
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

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EnjoyIt wrote: Thu May 06, 2021 9:35 pm
A correction is coming. Maybe not tomorrow. Maybe not next year. But it will come and it will be huge.
This makes a lot of sense to me, observing it's historical behaviour, the level of concentration of the asset (a couple of "whales" bring it down on a whim), competitors taking away share, so much polarization and narrative oposition. It seems that is coming indeed.

Those of us willing to invest in the space should be fully aware that this is not only very plausible but must likely inevitable.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

EnjoyIt wrote: Thu May 06, 2021 9:35 pm Made us so that one can buy a Tesla with it?
I'd be curious about the legality of that, given the dollar is legal tender in the US.

On the other hand, it would provide utility to a Tezcoin
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

watchnerd wrote: Thu May 06, 2021 10:06 pm
EnjoyIt wrote: Thu May 06, 2021 9:35 pm Made us so that one can buy a Tesla with it?
I'd be curious about the legality of that, given the dollar is legal tender in the US.

On the other hand, it would provide utility to a Tezcoin
That was a typo which I corrected above. It should have said
"Made it so that one can buy a Tesla with it?"

Regards legality...I don't know. He says we can buy a Tesla with Bitcoin. Why not Dogecoin, Ethereum, or Tesla Coin. Why would that be illegal?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by surfstar »

EnjoyIt wrote: Thu May 06, 2021 10:42 pm
watchnerd wrote: Thu May 06, 2021 10:06 pm
EnjoyIt wrote: Thu May 06, 2021 9:35 pm Made us so that one can buy a Tesla with it?
I'd be curious about the legality of that, given the dollar is legal tender in the US.

On the other hand, it would provide utility to a Tezcoin
That was a typo which I corrected above. It should have said
"Made it so that one can buy a Tesla with it?"

Regards legality...I don't know. He says we can buy a Tesla with Bitcoin. Why not Dogecoin, Ethereum, or Tesla Coin. Why would that be illegal?
Well, whatever you "buy" it with, it will be valued and taxed in USD.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

Hustlinghustling wrote: Thu May 06, 2021 9:10 pm
HanSolo wrote: Thu May 06, 2021 3:02 pm
OK. Then DOGE should not be a problem. But as we've seen here, it's a problem for some crypto fans. Are they in favor of freedom and options? Or not?
Strange framing of the issue. You can welcome having more options without having to like all the options available. That's pretty much the point of options.
I wasn't referencing likes and dislikes of specific options. I was suggesting that those who see freedom in crypto seem to be bothered by freedom when it interferes with their worldview, and their pocketbook (as measured in fiat). As someone yet again pointed out:
EnjoyIt wrote: Thu May 06, 2021 9:35 pm Also, the fact that a joke coin like DOGE has gained so much traction in my opinion is a big risk to Bitcoin as it proves that Bitcoin can be displaced.
My point is, we're left not knowing whether those who preach freedom are really in favor of it or not.
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Post by HanSolo »

TheBeanCounter wrote: Wed May 05, 2021 4:09 pm It really boils down to ideological differences. If you think that central banking, corporate censorship and centralization of power are issues that will continue to degrade society, you see the value in crypto. If you do not find these to be issues, then you most likely do not see the use case for crypto. The pro-crypto contingent is long individual freedom and short institutional dominance. You really can not have a crypto discussion without political and ideological arguments.
If individual freedom is the value being promoted, then we should consider having as many crypto varieties as possible... like one for every individual!

(And when this actually happens, remember that I invented this concept!)

Also, if you really want freedom from the institutions, you should start a currency that's not convertible into or out of fiat. If the value in fiat is always zero, then all transactions remain nontaxable.

(Again, you heard it here first!)
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

EnjoyIt wrote: Thu May 06, 2021 10:42 pm "

Regards legality...I don't know. He says we can buy a Tesla with Bitcoin. Why not Dogecoin, Ethereum, or Tesla Coin. Why would that be illegal?
That wouldn't be.

I thought you meant one could only buy a Tesla with coin.

Although, there might be some anti-monopoly / anti-competitive violation angle that maybe could be claimed if he rejected all coins *except* Teslacoin (and dollars).
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

watchnerd wrote: Fri May 07, 2021 12:26 am
EnjoyIt wrote: Thu May 06, 2021 10:42 pm "

Regards legality...I don't know. He says we can buy a Tesla with Bitcoin. Why not Dogecoin, Ethereum, or Tesla Coin. Why would that be illegal?
That wouldn't be.

I thought you meant one could only buy a Tesla with coin.

Although, there might be some anti-monopoly / anti-competitive violation angle that maybe could be claimed if he rejected all coins *except* Teslacoin (and dollars).
We are getting away from the point which is Elon Musk could create his own coin and tweet about it getting plenty to buy in. Not to turn this into politics, but I would bet a BLM (Black Lives Matter) coin that supports the cause would likely get significant traction as well with the right advertising. Maybe, just maybe being the first (Bitcoin) is not good enough anymore. I'm not trying to predict the future, just throwing out potential scenarios.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

HanSolo wrote: Thu May 06, 2021 11:26 pm
Hustlinghustling wrote: Thu May 06, 2021 9:10 pm
HanSolo wrote: Thu May 06, 2021 3:02 pm
OK. Then DOGE should not be a problem. But as we've seen here, it's a problem for some crypto fans. Are they in favor of freedom and options? Or not?
Strange framing of the issue. You can welcome having more options without having to like all the options available. That's pretty much the point of options.
I wasn't referencing likes and dislikes of specific options. I was suggesting that those who see freedom in crypto seem to be bothered by freedom when it interferes with their worldview, and their pocketbook (as measured in fiat). As someone yet again pointed out:
EnjoyIt wrote: Thu May 06, 2021 9:35 pm Also, the fact that a joke coin like DOGE has gained so much traction in my opinion is a big risk to Bitcoin as it proves that Bitcoin can be displaced.
My point is, we're left not knowing whether those who preach freedom are really in favor of it or not.
Most, and I mean a huge percentage of crypto owners are not in it for "the freedom." They are in it to get rich. Which is fine and completely understandable. Just like for profit hospitals who tout mission statements about patient care and quality when what they are really interested is money.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

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Cartographer wrote: Mon Apr 26, 2021 1:13 pm EDITED TO ADD: Why do we need another cryptocurrency thread? Well, most of them quickly derail into a debate about whether or not cryptocurrencies have "value." My central claim here is that value is s necessary but not sufficient condition for cryptocurrencies to be a good investment. While there are plausible arguments about the value of cryptocurrencies, I have yet to see any convincing argument that that implies they will be a good investment.
Value isn't even necessary. Clearly there's no value in doge, which was created as a joke coin to begin with.

Crypto is essentially a basket of commodities people speculate on. I don't own any, but they can be good investments so long as there are suckers jumping in after you.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

Marseille07 wrote: Fri May 07, 2021 1:56 am
Cartographer wrote: Mon Apr 26, 2021 1:13 pm EDITED TO ADD: Why do we need another cryptocurrency thread? Well, most of them quickly derail into a debate about whether or not cryptocurrencies have "value." My central claim here is that value is s necessary but not sufficient condition for cryptocurrencies to be a good investment. While there are plausible arguments about the value of cryptocurrencies, I have yet to see any convincing argument that that implies they will be a good investment.
Value isn't even necessary. Clearly there's no value in doge, which was created as a joke coin to begin with.

Crypto is essentially a basket of commodities people speculate on. I don't own any, but they can be good investments so long as there are suckers jumping in after you.
I think you meant to write that "DOGE, BTC, and a small selection of other cryptocurrencies are essentially a basket of commodities people speculate on."

Or perhaps you can explain how AAVE is a commodity? UNI? SNX? REN? CRV? BAL? COMP?

As there is so much noise around crypto, it's important we don't further confuse people with general statements that are demonstrably false...
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

Prahasaurus wrote: Fri May 07, 2021 2:42 am As there is so much noise around crypto, it's important we don't further confuse people with general statements that are demonstrably false...
Uh... we dealt with that "demonstrably false" thing upthread....
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

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HanSolo wrote: Fri May 07, 2021 3:23 am
Prahasaurus wrote: Fri May 07, 2021 2:42 am As there is so much noise around crypto, it's important we don't further confuse people with general statements that are demonstrably false...
Uh... we dealt with that "demonstrably false" thing upthread....
The claim that all crypto currencies are commodities is false. If you dealt with that upthread, apologies for repeating what should be obvious to anyone who spends more than a few minutes studying crypto.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

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EnjoyIt wrote: Fri May 07, 2021 1:32 am Maybe, just maybe being the first (Bitcoin) is not good enough anymore.
Oh, I've never thought Bitcoin was going to be the coin that 'wins'.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by dan7800 »

I consider BTC and GME in the same realm. GME isn't worth what it was/is valued at, but it's the idea that it will likely have a run and people will buy it and you will make money.

Conversely, hindsight is 20/20, but couldn't you argue that buying BTC 1 year ago would have been a fantastic investment?

I won't be buying BTC anytime soon btw. I'm buying VTI/VXUS instead so I can sleep better at night.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

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Some wise advisor told me not to buy anything I don't understand. I don't understand cryptocurrency.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

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jpdion wrote: Fri May 07, 2021 7:51 am Some wise advisor told me not to buy anything I don't understand. I don't understand cryptocurrency.
I don't think that stopped Dogecoin buyers
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

av111 wrote: Thu May 06, 2021 8:07 pm
langlands wrote: Thu May 06, 2021 4:05 pm
av111 wrote: Thu May 06, 2021 3:50 pm So serious question - what is the agreement after 13 pages

1. Does any of the coins (BTC, DOGE, ETH) that are rising up so fast, report quarterly Book value, revenue and profits?
2. Are the coins likely to replace gold as an alternate universal store of value
3. Are any of these coins likely to replace USD as a standard currency of the world

If not, would you not be always looking for the first sign of trouble to dump and run back to USD?

If yes, I should lump sum move into one of the coins or a diversified basket of coins
Certainly, there's no consensus and there's unlikely to ever be a consensus.

1. Look into ETH and Defi. I assume you know that cryptocurrencies will never "report" quarterly book value, revenue, or profits. They're not registered companies. But ETH is the leader in terms of being a value creation engine.

2. Most likely candidates are BTC, LTC, maybe even DOGE to eat into gold's market cap. Replacement is a bit strong. It seems natural that there would be an equilibrium containing both a physical and digital store of value.

3. Unlikely in my opinion.

It's a speculative investment space. Treat it like any other speculative investment class. For most bogleheads, I guess that would mean ignoring it, but I personally think a diversified portfolio of speculative investments is a good complement to a more traditional portfolio.

I see this notion that either crypto will fail, or crypto will succeed and it will eventually be in an index anyway so there's nothing for me to do. This is pretty weak logic. The point of course is that by the time crypto is represented at market weight within the S&P 500, the opportunity for outsized gains is long past.
Thank you for a balanced response. I love outsized returns just like anyone else but I find that I am always behind the curve on the bleeding edge and for good reason. Most of the new ideas fail. So outsized profit is earned with outsized risk and attention. I have better ways to make money. That's why I have not bought gold in the past.

I feel there is a value argument being made for ETH. If there is a well researched work on value creation with ETH, could you please post


Do you buy at RH or coinbase?
I had misattributed the concept of a price/revenue multiple applying to the Ethereum network. The idea was originated by Arthur Hayes, and his writeup can be found here: https://cryptohayes.medium.com/yes-i-re ... cfa2ea9c2c It's a very interesting way of looking at the potential market and how much value would be captured by ETH under various scenarios.

The other report linked earlier is the triple halving report (https://squish.substack.com/p/ethereum- ... le-halving), which is way more focused on the effects of coming supply shocks rather than fundamentals. But between these two reports there is a pretty convincing case that ETH could see some major price action in the near term while also filling out into a very strong long-term investment based on fundamentals as well.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

Prahasaurus wrote: Fri May 07, 2021 5:54 am
HanSolo wrote: Fri May 07, 2021 3:23 am
Prahasaurus wrote: Fri May 07, 2021 2:42 am As there is so much noise around crypto, it's important we don't further confuse people with general statements that are demonstrably false...
Uh... we dealt with that "demonstrably false" thing upthread....
The claim that all crypto currencies are commodities is false. If you dealt with that upthread, apologies for repeating what should be obvious to anyone who spends more than a few minutes studying crypto.
If you want to talk about other people's "noise" around crypto, then it's fair game to point out yours.

To recap, here's what we had upthread:
HanSolo wrote: Thu May 06, 2021 3:02 pm
Prahasaurus wrote: Thu May 06, 2021 12:38 am
av111 wrote: Wed May 05, 2021 11:14 pm
Keenobserver wrote: Wed May 05, 2021 11:05 pm So stocks are not speculative? We dont get stock bubbles? I thought it was simple; a stock is worth what whatever someone is willing to pay for it in the open market. Same holds true for crypto, even DODGE despite its lack of apparant utility. A bubble yes, but lets not pretend stocks are not speculative and dont have bubbles. Anyone investing in cryptosphere will acknowledge its a high risk high reward game simiar to penny stocks or pharma stocks. Why the hate?
Stocks represent regular businesses. They have a basis, book value, track record of revenue and profits and possibility of impact on these metrics from macro and micro environment. Crypto is nothing like that so it is hard to see anything but speculation
This is just not true. It's demonstrably false. It amazes me people still believe this with such confidence!
OK. But if what you say is true, then please tell us the book value per coin of BTC, DOGE, and ETH (otherwise, I'm not sure you understood the post you replied to).
(crickets...)

av111 correctly pointed out how ownership of a business is something fundamentally different from ownership of crypto tokens. What's "demonstrably false" is your claim that av111's comment was false.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

HanSolo wrote: Thu May 06, 2021 11:38 pm
TheBeanCounter wrote: Wed May 05, 2021 4:09 pm It really boils down to ideological differences. If you think that central banking, corporate censorship and centralization of power are issues that will continue to degrade society, you see the value in crypto. If you do not find these to be issues, then you most likely do not see the use case for crypto. The pro-crypto contingent is long individual freedom and short institutional dominance. You really can not have a crypto discussion without political and ideological arguments.
If individual freedom is the value being promoted, then we should consider having as many crypto varieties as possible... like one for every individual!

(And when this actually happens, remember that I invented this concept!)

Also, if you really want freedom from the institutions, you should start a currency that's not convertible into or out of fiat. If the value in fiat is always zero, then all transactions remain nontaxable.

(Again, you heard it here first!)
Don't worry, I will give you credit.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

TheBeanCounter wrote: Fri May 07, 2021 11:25 am
HanSolo wrote: Thu May 06, 2021 11:38 pm
TheBeanCounter wrote: Wed May 05, 2021 4:09 pm It really boils down to ideological differences. If you think that central banking, corporate censorship and centralization of power are issues that will continue to degrade society, you see the value in crypto. If you do not find these to be issues, then you most likely do not see the use case for crypto. The pro-crypto contingent is long individual freedom and short institutional dominance. You really can not have a crypto discussion without political and ideological arguments.
If individual freedom is the value being promoted, then we should consider having as many crypto varieties as possible... like one for every individual!

(And when this actually happens, remember that I invented this concept!)

Also, if you really want freedom from the institutions, you should start a currency that's not convertible into or out of fiat. If the value in fiat is always zero, then all transactions remain nontaxable.

(Again, you heard it here first!)
Don't worry, I will give you credit.
My point was that (a) I agree with those who observed that interest in crypto, by and large, has more to do with racking up gains (measured in fiat, no less) than it has to do with anything political or ideological, and (b) of the minority who actually espouse a political or ideological position (such as increasing freedom), some of them betray their own hypocrisy when they complain about the mere existence of alt-coins (like DOGE). If they were really going after freedom, they'd be espousing ideas like those I proposed above... but they don't.

As I alluded upthread, with reference to George Orwell (Animal Farm) and The Who ("meet the new boss, same as the old boss"), I'm not seeing how crypto isn't just another "revolution" that reorganizes concentrations of power, just in a different way, but with the same objective... to subjugate the masses.

Someone upthread made an analogy to the rise of the Internet. That's interesting because the Internet was long seen as an equalizer, nobody owning the network or the protocols. But somehow, an enormous amount of power has been consolidated in the hands of a few small players who arguably have worked against the best interests of society at least as much as they've contributed something positive to it. If that's the analogy at play, it doesn't necessarily have a happy ending.

I agree with you that crypto has political and ideological ramifications. But I'm not sure we've had a completely honest and realistic discussion about it yet.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

HanSolo wrote: Fri May 07, 2021 11:23 am
Prahasaurus wrote: Fri May 07, 2021 5:54 am
HanSolo wrote: Fri May 07, 2021 3:23 am
Prahasaurus wrote: Fri May 07, 2021 2:42 am As there is so much noise around crypto, it's important we don't further confuse people with general statements that are demonstrably false...
Uh... we dealt with that "demonstrably false" thing upthread....
The claim that all crypto currencies are commodities is false. If you dealt with that upthread, apologies for repeating what should be obvious to anyone who spends more than a few minutes studying crypto.
If you want to talk about other people's "noise" around crypto, then it's fair game to point out yours.

To recap, here's what we had upthread:
HanSolo wrote: Thu May 06, 2021 3:02 pm
Prahasaurus wrote: Thu May 06, 2021 12:38 am
av111 wrote: Wed May 05, 2021 11:14 pm
Keenobserver wrote: Wed May 05, 2021 11:05 pm So stocks are not speculative? We dont get stock bubbles? I thought it was simple; a stock is worth what whatever someone is willing to pay for it in the open market. Same holds true for crypto, even DODGE despite its lack of apparant utility. A bubble yes, but lets not pretend stocks are not speculative and dont have bubbles. Anyone investing in cryptosphere will acknowledge its a high risk high reward game simiar to penny stocks or pharma stocks. Why the hate?
Stocks represent regular businesses. They have a basis, book value, track record of revenue and profits and possibility of impact on these metrics from macro and micro environment. Crypto is nothing like that so it is hard to see anything but speculation
This is just not true. It's demonstrably false. It amazes me people still believe this with such confidence!
OK. But if what you say is true, then please tell us the book value per coin of BTC, DOGE, and ETH (otherwise, I'm not sure you understood the post you replied to).
(crickets...)

av111 correctly pointed out how ownership of a business is something fundamentally different from ownership of crypto tokens. What's "demonstrably false" is your claim that av111's comment was false.
BTC and DOGE are basically commodities. AAVE (and many others I've already mentioned like SNX, COMP, UNI, etc.) is a governance token similar to shares in a company. Similar, as these are not companies but decentralized protocols. But the behavior is similar. You have income under control of the DAO (shareholders), etc. It is nothing like a commodity and Aave is in any case an application running on Ethereum. Aave generates a ton of cash and the rights to that cash are within the DAO.

Here is a list of fees (free cash) generated by each protocol. Apps running on Ethereum are highlighted in pink.

So nobody has refuted anything I've written, you continue to misunderstand or oversimplify crypto as if it's 2017 and we have Bitcoin and Litecoin. Those days are long gone. Yes, it's true Deloitte and Touche does not audit Aave, but that is just nonsensical. It's not a company, it's a protocol.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

Prahasaurus wrote: Fri May 07, 2021 11:54 am
HanSolo wrote: Fri May 07, 2021 11:23 am
Prahasaurus wrote: Fri May 07, 2021 5:54 am
HanSolo wrote: Fri May 07, 2021 3:23 am
Prahasaurus wrote: Fri May 07, 2021 2:42 am As there is so much noise around crypto, it's important we don't further confuse people with general statements that are demonstrably false...
Uh... we dealt with that "demonstrably false" thing upthread....
The claim that all crypto currencies are commodities is false. If you dealt with that upthread, apologies for repeating what should be obvious to anyone who spends more than a few minutes studying crypto.
If you want to talk about other people's "noise" around crypto, then it's fair game to point out yours.

To recap, here's what we had upthread:
HanSolo wrote: Thu May 06, 2021 3:02 pm
Prahasaurus wrote: Thu May 06, 2021 12:38 am
av111 wrote: Wed May 05, 2021 11:14 pm

Stocks represent regular businesses. They have a basis, book value, track record of revenue and profits and possibility of impact on these metrics from macro and micro environment. Crypto is nothing like that so it is hard to see anything but speculation
This is just not true. It's demonstrably false. It amazes me people still believe this with such confidence!
OK. But if what you say is true, then please tell us the book value per coin of BTC, DOGE, and ETH (otherwise, I'm not sure you understood the post you replied to).
(crickets...)

av111 correctly pointed out how ownership of a business is something fundamentally different from ownership of crypto tokens. What's "demonstrably false" is your claim that av111's comment was false.
BTC and DOGE are basically commodities. AAVE (and many others I've already mentioned like SNX, COMP, UNI, etc.) is a governance token similar to shares in a company. Similar, as these are not companies but decentralized protocols. But the behavior is similar. You have income under control of the DAO (shareholders), etc. It is nothing like a commodity and Aave is in any case an application running on Ethereum. Aave generates a ton of cash and the rights to that cash are within the DAO.

Here is a list of fees (free cash) generated by each protocol. Apps running on Ethereum are highlighted in pink.

So nobody has refuted anything I've written, you continue to misunderstand or oversimplify crypto as if it's 2017 and we have Bitcoin and Litecoin. Those days are long gone. Yes, it's true Deloitte and Touche does not audit Aave, but that is just nonsensical. It's not a company, it's a protocol.
The bolded is a false statement. I refuted your response to av111. av111 made a true statement, and you erroneously claimed that it was false. I can only assume it's because you didn't understand av111's comments.

The distinction av111 was making depends on whether or not one takes a capitalist point of view. A capitalist will look at business ownership as being a different kind of investment from other things. Those who don't take that point of view, or don't understand it, might see everything in the market as having no meaning other than numbers going up and down (see Keenobserver's post, which av111 was replying to). It's a difference in point of view that has played out over and over again in this thread... as I pointed out earlier:
HanSolo wrote: Mon May 03, 2021 4:12 pm As I said, capitalism involves investing in business that deliver products and services to customers for money.

To a capitalist, it matters. To others, yes, it may be some kind of nit-picking.
TheBeanCounter
Posts: 79
Joined: Thu Sep 03, 2020 2:57 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

HanSolo wrote: Fri May 07, 2021 12:01 pm
Prahasaurus wrote: Fri May 07, 2021 11:54 am
HanSolo wrote: Fri May 07, 2021 11:23 am
Prahasaurus wrote: Fri May 07, 2021 5:54 am
HanSolo wrote: Fri May 07, 2021 3:23 am
Uh... we dealt with that "demonstrably false" thing upthread....
The claim that all crypto currencies are commodities is false. If you dealt with that upthread, apologies for repeating what should be obvious to anyone who spends more than a few minutes studying crypto.
If you want to talk about other people's "noise" around crypto, then it's fair game to point out yours.

To recap, here's what we had upthread:
HanSolo wrote: Thu May 06, 2021 3:02 pm
Prahasaurus wrote: Thu May 06, 2021 12:38 am

This is just not true. It's demonstrably false. It amazes me people still believe this with such confidence!
OK. But if what you say is true, then please tell us the book value per coin of BTC, DOGE, and ETH (otherwise, I'm not sure you understood the post you replied to).
(crickets...)

av111 correctly pointed out how ownership of a business is something fundamentally different from ownership of crypto tokens. What's "demonstrably false" is your claim that av111's comment was false.
BTC and DOGE are basically commodities. AAVE (and many others I've already mentioned like SNX, COMP, UNI, etc.) is a governance token similar to shares in a company. Similar, as these are not companies but decentralized protocols. But the behavior is similar. You have income under control of the DAO (shareholders), etc. It is nothing like a commodity and Aave is in any case an application running on Ethereum. Aave generates a ton of cash and the rights to that cash are within the DAO.

Here is a list of fees (free cash) generated by each protocol. Apps running on Ethereum are highlighted in pink.

So nobody has refuted anything I've written, you continue to misunderstand or oversimplify crypto as if it's 2017 and we have Bitcoin and Litecoin. Those days are long gone. Yes, it's true Deloitte and Touche does not audit Aave, but that is just nonsensical. It's not a company, it's a protocol.
The bolded is a false statement. I refuted your response to av111. av111 made a true statement, and you erroneously claimed that it was false. I can only assume it's because you didn't understand av111's comments.

The distinction av111 was making depends on whether or not one takes a capitalist point of view. A capitalist will look at business ownership as being a different kind of investment from other things. Those who don't take that point of view, or don't understand it, might see everything in the market as having no meaning other than numbers going up and down (see Keenobserver's post, which av111 was replying to). It's a difference in point of view that has played out over and over again in this thread... as I pointed out earlier:
HanSolo wrote: Mon May 03, 2021 4:12 pm As I said, capitalism involves investing in business that deliver products and services to customers for money.

To a capitalist, it matters. To others, yes, it may be some kind of nit-picking.
Have you spent as much time learning, reading, listening to Crypto related material as you have trying to prove it is not a good investment? It does not seem like you understand what a DAO is. I don't understand the net benefit to you, in convincing others that it is a bad investment. Why spend so much time and effort going back and forth if, no matter what, you are going to think it is a foolish investment/speculation.
User avatar
HanSolo
Posts: 380
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

TheBeanCounter wrote: Fri May 07, 2021 12:11 pm Have you spent as much time learning, reading, listening to Crypto related material as you have trying to prove it is not a good investment? It does not seem like you understand what a DAO is. I don't understand the net benefit to you, in convincing others that it is a bad investment. Why spend so much time and effort going back and forth if, no matter what, you are going to think it is a foolish investment/speculation.
I'm not trying to prove anything or convince anyone. I'm just advocating that, however we proceed, we do it with eyes open. I'm only in favor of honesty, integrity, and awareness, nothing more. I believe there's value in that, and working toward that, on any issue, is never wrong. I hope you're not disagreeing with me on that.

If you disagree with something I've said, feel free to quote it and state what your issue is.
txhill
Posts: 626
Joined: Tue Mar 16, 2021 12:27 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

HanSolo wrote: Fri May 07, 2021 12:21 pm
TheBeanCounter wrote: Fri May 07, 2021 12:11 pm Have you spent as much time learning, reading, listening to Crypto related material as you have trying to prove it is not a good investment? It does not seem like you understand what a DAO is. I don't understand the net benefit to you, in convincing others that it is a bad investment. Why spend so much time and effort going back and forth if, no matter what, you are going to think it is a foolish investment/speculation.
I'm not trying to prove anything or convince anyone. I'm just advocating that, however we proceed, we do it with eyes open. I'm only in favor of honesty, integrity, and awareness, nothing more. I believe there's value in that, and working toward that, on any issue, is never wrong. I hope you're not disagreeing with me on that.

If you disagree with something I've said, feel free to quote it and state what your issue is.
The only thing I don't like is that you keep trying to make a political argument and keep bringing up the same talking points that have no merit (like "no intrinsic value"). Yes, any investment in anything is a political decision on some level, and maybe more so with crypto. But you keep bringing it back to that when folks here keep showing you resources that highlight how there are fundamental reasons to invest. For example, Ethereum is a platform on which apps can be and are deployed, and has become popular enough such that it generates revenue comparable to what AWS (Amazon's cloud computing service) was generating in 2015. That's actual revenue, and once proof of stake is effective that value will flow directly to ETH holders.

Yet you ignore that and continue to say the same thing about no intrinsic value etc. I just think people are trying to show you real information but you seem incapable of even looking at new facts, so you keep bringing it back to anticapitalist or libertarian stuff. No one here cares about that kind of talk.
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watchnerd
Posts: 9113
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Location: Seattle, WA, USA

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Here's the DIY hack of an 'index' I'm using to market weight crypto.

It's probably more like the Dow than TSM because the number of holdings is small and I used a bunch of subjective criteria.

Others can hack it differently.

Design notes:

1. BTC and ETH, being the bulk of the cap weight, can be held in a Roth IRA via ETFs.

2. All the lesser coins are at Coinbase.

3. I capped the list at 7 holdings. Why 7? You can get >60% market cap coverage with 7. 5 feels too few. 10 feels like diminishing returns. And, hey, 7 is a lucky number. But maybe you like 9 or 12 better.

4. The market caps were based on Coindesk 20 data:

https://www.coindesk.com/coindesk20

5. Stablecoins were excluded

6. Anything not tradeable at Coinbase was excluded

7. Bitcoin-alikes (LTC, BCH) were excluded, for now.

8. This index captures ~$1.6T of the ~$2.4T crypto market cap, so 66%.


Crypto 7 Cap Index

BTC: 61.09%
ETH: 24.74%
XLM: 4.28%
ADA: 3.36%
LINK: 2.99%
UNI: 2.50%
GRT: 1.04%
60% Global Market Stocks (VT,FM) | 38% Global Market Bonds | 2% crypto & securitized gold || LMP TIPS/STRIPS || RSU + ESPP
Locked