Anyone following the latest in Bitcoin and cryptocurrency news?

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poundwise
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Anyone following the latest in Bitcoin and cryptocurrency news?

Post by poundwise » Sat May 06, 2017 1:18 pm

I would love to hear the (sobering) Boglehead perspective on the latest in the fascinating world of cryptocurrency. So many developments:

* Bitcoin hitting an all time high this week of over $1600, with a market cap breaking $25B.
* Many alternative currencies surging as well, including one (Ethereum) that reached a market cap of almost $9B.
* A vituperative debate over which technology will allow Bitcoin (or other currencies) to scale, largely pitting "miners" against most of the rest of the Bitcoin ecosystem.
* Actual payments using Bitcoin climbing steadily.

It's a hobby of mine to follow this. I personally think that in the long term some form of electronic currency will play a critical role in the global monetary ecosystem, but it's a long way off before it can "cross the chasm."

Any other Bogleheads following this saga? I would love to hear viewpoints and predictions!

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backpacker
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by backpacker » Sat May 06, 2017 1:28 pm

With the advent of dark markets, we will always have cryptocurrency. The only questions are which one and how mainstream will it get?

I'm not convinced that bitcoin will still be the currency of choice in ten years. Persistent currency deflation is a big problem and the reason that no one is on the gold standard anymore.

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rob
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by rob » Sat May 06, 2017 1:39 pm

There has to be a cyber currency in the future... I suspect the days of nationalist currencies will reduce in popularity for online and maybe cross border transactions (baring some legislation). Now which one is like picking the surviving railway company - it may or may not yet exist and it may or may not be one of the names you know today.

The blockchain technology underneath IMO has legs. A shared immutable ledger can be used in all sorts of ways.... Lots of companies are playing with the technology and I expect to see application in the near-future.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien

hilink73
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by hilink73 » Sun May 07, 2017 2:38 am

I see that as my *very* risky part of my portfolio.
I'm in for the long run in BTC, ETH, Dash, ZCash.
Smaller sum in ICN as an experiment.

Also, a little bit leveraged trading for the fun of it.

But I'm also interested in the technology itself, which gets more and more attention from the big companies.

harvestbook
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by harvestbook » Sun May 07, 2017 7:07 am

I pay attention to it because technological changes come on faster than anyone can imagine. Ten years ago, self-driving cars were the stuff of science fiction and now they're hitting the roads. In ten years, it will likely be affecting the entire labor, distribution, and commerce markets and noticeably shifting the economy. That said, cryptocurrency is a little too complex for me to invest in even though I'm interested. I am no Luddite, but all these mysteries of "mining" and the uncertainty of digital wallets just gives me pause.

If the SEC approves a Bitcoin ETF, I'd be slightly more interested, but no more so than a gold ETF, which I have no interest in owning--because in the end, Bitcoin doesn't MAKE or PRODUCE anything. It's just a speculative currency. The blockchain idea seems to have some value, but again, I'd never invest in anything too complex for me to understand. Buying a stock in a company is simple--you have a share of its profits--and buying a bond is simple--you are loaning money for a profit. Those work well enough for me. Real estate or intellectual properties also make sense.

So yes, I am following, because I am constantly fighting my biases, challenging my theses, and acknowledging my ignorance. That's why the different points of view in the forum are so helpful.
I'm not smart enough to know, and I can't afford to guess.

alpine_boglehead
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by alpine_boglehead » Sun May 07, 2017 7:50 am

Some years ago I purched 0.1 Bitcoins so that in the case it becomes the only world currency, the increase in value will offset the demise of my old currency :) . Google search results say there's around 60T$ worth of currency in the world, so Bitcoin were to completely take over, that would be a 2400 fold increase in Bitcoin value from its current market cap of 25B$.

But it's really anyone's guess if cryptocurrencies will replace the "real" ones (and whether that will be Bitcoin). I have some doubts about whether politics would condone that, because that would basically put all countries in the situation e.g. Greece is in now (all debt in currency which they are unable to dilute by printing money).

Ethereum also looks very interesting, because it's much more than a currency.

If you search the forum for Bitcoin, you'll find some other threads from past discussions.

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Pajamas
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Pajamas » Sun May 07, 2017 2:40 pm

My take on the topic is that fiat currency backed by a country's power of taxation does not do very well in the long run and currencies that are not even backed by powers of taxation will do even more poorly in the long run. A Bitcoin or similar is only worth what the next sucker will give you for it.

bargainhuntingking
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by bargainhuntingking » Tue May 09, 2017 2:46 pm

Yes, and it's wild. Graph the 1 year return of btc and repent at leisure for not speculating.

Then again, I bought my first coins in fall 2013 at a highpoint near $1200 and spent the following 2 years selling low (some coins I sold close to $300). It was pure speculation for me, and I lost. But the concept is fascinating. It's basically a highly volatile non-diversified single stock with a relatively low market cap, and no earnings nor intrinsic value other than what other speculators are hoping for. I could see the price was being manipulated by market "whales" who would pump and dump it at regular intervals. I have no interest to hop back on that rodeo. Interesting to watch the bitcoin market euphoria and dysphoria articulated on Reddit forums; makes one glad to be a boglehead.

Jonathan
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Jonathan » Wed May 10, 2017 11:13 am

There are a lot of parallels between Bogleheads and bitcoiners.

Much of the Bogleheads position is: don't trust the vast majority of the financial industry, it's broken - but Vanguard, John Bogle, you can trust them. That's not unreasonable; obviously Vanguard is more trustworthy than Rootin' Tootin' Ricky's Fried Chicken and Financial Services.

Bitcoin's mantra is more along the lines of: don't trust, because trust is broken.

mavenleek
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by mavenleek » Wed May 24, 2017 10:44 pm

I got into crypto "investing" last year and few cryptocurrencies like BTC, ETH, XRP and STORJ.

BTC is a very different animal has it doesn't really have any purpose. I have the feeling people are buying it because they consider it a new class of asset like gold. I don't think BTC will have real world applications.

It's very different for ETH and the other cryptocurrencies. You have to consider them as share of projects that might completely change the way we run the web, store data or settle bank transferts. I have invested early in a small amount of cryptocurrencies and so far I'm really happy with the returns.

Jonathan
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Jonathan » Wed May 24, 2017 11:25 pm

ETH's capabilities are largely accessible by bitcoin with various add-ons or soft-forks. For an example of a bitcoin-based smart contract implementation, take a look at RootStock. Also examine the tension between Ethereum and Ethereum Classic to gain perspective on some of Ethereum's criticisms.

Nice job with your alt returns, but be careful. Look at coinmarketcap and you can see many/most of them turning red right now.

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epicahab
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by epicahab » Fri Jun 02, 2017 8:49 am

I'm a big fan of Ripple (XRP). I've been following them for 3 years. I think concepts like "Interledger," "Blockchain," and the "Internet of Value" will be important components in future money movement, both manual and automated.

Here's an interesting talk by Chris Larsen of Ripple Labs:

https://www.youtube.com/watch?v=QlNGTEn ... e=youtu.be

poundwise
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by poundwise » Wed Aug 02, 2017 3:42 am

Wow, in the three months since I started this thread, there has been a world of change in the crypto-world:

* Bitcoin hitting an all time high this week of over $1600, with a market cap breaking $25B.
-> A Bitcoin now sits at ~$2700, with a market cap of $44B.

* Many alternative currencies surging as well, including one (Ethereum) that reached a market cap of almost $9B.
-> Ethereum is up to a market cap of $21B, and the total crypto-cap is ~$100B

* A vituperative debate over which technology will allow Bitcoin (or other currencies) to scale, largely pitting "miners" against most of the rest of the Bitcoin ecosystem.
-> These two camps finally parted ways yesterday, and Bitcoin has split into two (Bitcoin vs Bitcoin cash). Each holder of a bitcoin now magically has a coin of each.

* Actual payments using Bitcoin climbing steadily.
-> Bitcoin is used more as a gold substitute (store of value) then for actual payments, but I'm not sure what the best data is to show this.

While it still makes sense to be a Boglehead with your money, there is some fascinating intellectual action in the crazy world of crypto...

jb1
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by jb1 » Wed Aug 02, 2017 6:02 am

Id love to get into it and hope to one day learn

Johnnie
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Johnnie » Wed Aug 02, 2017 6:28 am

harvestbook wrote: Ten years ago, self-driving cars were the stuff of science fiction and now they're hitting the roads.
No they're not, and it may be a long time before they do in a meaningful way, not counting niche functions like parallel parking and such. The reality is, mixing unpredictable and flawed human drivers with robot pilots in busy urban surface-street or freeway conditions is recipe for big trouble - and the entire industry is just one bad wreck and lawsuit away from a 20-year time-out.

My point is not to dump on the concept or the forum member I quoted, but to note that the hype gets way ahead of the reality in some areas, and prudent Bogleheads should constrain their enthusiasms accordingly.

Market pundit Josh Brown wrote last week about buying one bitcoin. That sounds interesting and not imprudent.
"I know nothing."

Valuethinker
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Valuethinker » Wed Aug 02, 2017 8:12 am

poundwise wrote:Wow, in the three months since I started this thread, there has been a world of change in the crypto-world:

* Bitcoin hitting an all time high this week of over $1600, with a market cap breaking $25B.
-> A Bitcoin now sits at ~$2700, with a market cap of $44B.

* Many alternative currencies surging as well, including one (Ethereum) that reached a market cap of almost $9B.
-> Ethereum is up to a market cap of $21B, and the total crypto-cap is ~$100B

* A vituperative debate over which technology will allow Bitcoin (or other currencies) to scale, largely pitting "miners" against most of the rest of the Bitcoin ecosystem.
-> These two camps finally parted ways yesterday, and Bitcoin has split into two (Bitcoin vs Bitcoin cash). Each holder of a bitcoin now magically has a coin of each.

* Actual payments using Bitcoin climbing steadily.
-> Bitcoin is used more as a gold substitute (store of value) then for actual payments, but I'm not sure what the best data is to show this.

While it still makes sense to be a Boglehead with your money, there is some fascinating intellectual action in the crazy world of crypto...
You forgot the Russian arrested in Greece, wanted by the US authorities, for laundering $4bn via Bitcoin, including allegedly Bitcoins stolen from Mt Gox.

And the continued drive by the Regulators to get ahold of this market.

I gather 80% of Bitcoin exchanges are in China? Where the authorities have restricted it? That should tell you something about its purpose (money laundering and exchange control avoidance) and also its likely fate (to be marginalized by actions by the authorities).

The Dark Web is where Bitcoin is useful. And we'd be fools to think the Dark Web will hang around without interference. The world's internet traffic is controlled by big companies and flows through infrastructure of big companies-- Reston Virginia in particular. And those companies need to maintain relationships with major governments-- remember Google's cooperation with China?

The James Coburn movie "The President's Analyst" comes to mind.

Valuethinker
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Valuethinker » Wed Aug 02, 2017 8:14 am

poundwise wrote:Wow, in the three months since I started this thread, there has been a world of change in the crypto-world:

* Bitcoin hitting an all time high this week of over $1600, with a market cap breaking $25B.
-> A Bitcoin now sits at ~$2700, with a market cap of $44B.

* Many alternative currencies surging as well, including one (Ethereum) that reached a market cap of almost $9B.
-> Ethereum is up to a market cap of $21B, and the total crypto-cap is ~$100B

* A vituperative debate over which technology will allow Bitcoin (or other currencies) to scale, largely pitting "miners" against most of the rest of the Bitcoin ecosystem.
-> These two camps finally parted ways yesterday, and Bitcoin has split into two (Bitcoin vs Bitcoin cash). Each holder of a bitcoin now magically has a coin of each.

* Actual payments using Bitcoin climbing steadily.
-> Bitcoin is used more as a gold substitute (store of value) then for actual payments, but I'm not sure what the best data is to show this.

While it still makes sense to be a Boglehead with your money, there is some fascinating intellectual action in the crazy world of crypto...
Store of value? With that volatility? Why not hold USD?

What Bitcoin is is an asset which is impossible to value-- a financial asset, like Dutch Tulip Bulbs or South Sea Company shares. Prices of $10,000 and nearly zero are both justified. "Castles in the air" are pretty easy things to justify high valuations, when there are no metrics, and the cost of carry (i.e. borrowing) is near zero.

themesrob
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by themesrob » Thu Aug 03, 2017 10:20 am

Matt Levine's article yesterday on the Bitfinex mess was outstanding. The conclusion encapsulates one of the reasons why I would not touch bitcoins with a ten-foot pole:

"The blockchain has a certain stark logical completeness, but it doesn't address all of the actual human uses required of it. And so it has become encrusted with other human institutions. And those institutions turn out to be unsurprisingly human."

https://www.bloomberg.com/view/articles ... y-bitcoins

Valuethinker
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Valuethinker » Sat Aug 05, 2017 7:51 am

themesrob wrote:Matt Levine's article yesterday on the Bitfinex mess was outstanding. The conclusion encapsulates one of the reasons why I would not touch bitcoins with a ten-foot pole:

"The blockchain has a certain stark logical completeness, but it doesn't address all of the actual human uses required of it. And so it has become encrusted with other human institutions. And those institutions turn out to be unsurprisingly human."

https://www.bloomberg.com/view/articles ... y-bitcoins
Thank you. Very interesting.

supaflix
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by supaflix » Sat Aug 05, 2017 8:22 am

Bitcoin with new all time high last night of $3240 breaking through resistance. Market cap $52 billion. $1.6 billion USD worth of BTC traded in past 24 hours. Recent approval for US based option trading expected by year end 2017. Soon after that, expected US based ETF trading. Gaining worldwide adoption at exponential rate with bitcoin price following that growth. Currently less than 5% know about/understand and even less invest in bitcoin. It is much easier to mock something that is not understood.

If there is an efficiency to be gained by the market, the market will find it. Blockchain technology provides that efficiency and Bitcoin is the first comer for worldwide decentralized adoption.

supaflix
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by supaflix » Sat Aug 05, 2017 8:33 am

There is much talk within Bogleheads camp of using a small cap value tilt to squeeze alpha out of their portfolio with reasoning being the small cap provides a better risk:return ratio aka a better Sharpe ratio. The Boglehead would then take risk off the table in another asset class, possibly by increasing treasury holdings.

What if I told you Bitcoin's Sharpe ratio was better than small cap. What if you could invest a small percentage of your portfolio in bitcoin and take risk off the table in another asset?

To top it off, Bitcoin has very low correlation with traditional asset classes stocks/bonds/commodities etc making it a wonderful portfolio diversifier. Would a 1% portfolio allocation risk/benefit be in your best interest?

Take a look at this white paper.

http://research.ark-invest.com/hubfs/1_ ... -Class.pdf

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epicahab
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by epicahab » Sat Aug 05, 2017 11:25 am

This was a very eventful week, with the first official fork of Bitcoin (Bitcoin Cash or BCH) and then last night Bitcoin hit an all time high and passed $3,000.

Valuethinker
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Valuethinker » Sat Aug 05, 2017 1:32 pm

[edited]?

restingonmylaurels
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by restingonmylaurels » Mon Aug 07, 2017 8:19 am

Governments have and will continue to regulate virtual currencies like BTC in areas like money transmitting and money laundering, likely both increasing and diminishing their appeal to different types of more mainstream users. That is, as soon as governments determine what to define it as (e.g. property, currency, security, commodity, etc.).

The most important use of this blockchain technology will not be for virtual currencies but as a distributed ledger that be used for all sorts of transactions, including smart contracts (e.g. upon proof of your death your heir will be automatically paid a life insurance benefit without the need for human intervention). The Internet of Things will run off of such legal mechanisms.

lazyday
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by lazyday » Sat Aug 12, 2017 9:40 am

Crypto just mentioned in passing:
"It looks bubble-ish when you see the kind of price action in bitcoin and now you're having new ICOs [initial coin offerings] at least one a week now and exploding when they come out - that's bubble action," he said.
https://www.thestreet.com/story/1426818 ... warns.html

Valuethinker
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Re: Anyone following the latest in Bitcoin and cryptocurrency news?

Post by Valuethinker » Sat Aug 12, 2017 10:01 am

lazyday wrote:
Sat Aug 12, 2017 9:40 am
Crypto just mentioned in passing:
"It looks bubble-ish when you see the kind of price action in bitcoin and now you're having new ICOs [initial coin offerings] at least one a week now and exploding when they come out - that's bubble action," he said.
https://www.thestreet.com/story/1426818 ... warns.html
The whole thing does remind me so much of 2000 and the dot com era.

You had a genuinely useful and world changing innovation (the internet and ecommerce).

And you had all of these funds being created, investing in it, all this speculative movement, this complete lack of sensible business models, all this hype amongst the general investing (and non investing) public ...

The technology is very real, and appears to solve some interesting problems.

But the hype, and the asset price response ...

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