Crypto-Currency

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Buster65
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Crypto-Currency

Post by Buster65 » Wed Dec 06, 2017 10:52 am

I'm wondering if any bogleheads dabble in crypto currency? I'm interested in understanding how you went about it, what exchanges you're on and what currency's you own.


Valuethinker
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Re: Crypto-Currency

Post by Valuethinker » Wed Dec 06, 2017 12:45 pm

Buster65 wrote:
Wed Dec 06, 2017 10:52 am
I'm wondering if any bogleheads dabble in crypto currency? I'm interested in understanding how you went about it, what exchanges you're on and what currency's you own.
There are at least 5 active threads on bitcoin and its ilk right now.

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CaliJim
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Re: Crypto-Currency

Post by CaliJim » Wed Dec 06, 2017 1:02 pm

No. Speculation in such things is not allowed per the BH membership agreement.
-calijim- | | For more info, click this

Valuethinker
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Re: Crypto-Currency

Post by Valuethinker » Wed Dec 06, 2017 1:15 pm

CaliJim wrote:
Wed Dec 06, 2017 1:02 pm
No. Speculation in such things is not allowed per the BH membership agreement.
Shhh... the first rule of Bogleheads is "Do not talk about ... "

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nisiprius
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Re: Crypto-Currency

Post by nisiprius » Wed Dec 06, 2017 1:21 pm

1) There are many people posting on this board who dabble in cryptocurrency.

2) I don't know the percentage of people who self-identify as "Bogleheads" who dabble in cryptocurrency.

Image

3) This board is about "investing advice inspired by John Bogle" and Bogle has made his opinion clear. Indeed, right after saying "Avoid bitcoin like the plague," his next words were "Do I make myself clear?"

4) This might be a good time to re-read the Bogleheads investment philosophy You don't need to follow it or agree with all of it. However, it is difficult to reconcile investing in cryptocurrency with the idea of "owning the whole market" and "using index funds when possible." I also question how many cryptocurrency investors (some) actually plan to stay the course, long-term, and how many are simply speculating, intrigued by the run-up and hoping to get in on some of it.

5) Although there is a lot of support for the idea that it is OK to use some of your money as "fun money" to scratch your gambling itch so that you can keep it out of your core investing, I personally have two problems with the idea. A commonly mentioned allotment is 5%. The first problem is whether there isn't some way of getting more fun for the same amount of money. The second, which I have yet to see answered, is "what do you do if you lose it?" The idea is that you are limiting your possible losses to 5% and everyone can afford that big a loss. I agree that everyone can afford that big a loss, but I'm not sure whether people are really limiting their losses. The unspoken assumption is that you won't lose it--the worst that happens is you fail to beat the index. But it's possible, and the question I have is, if you lose your "fun money," what then? Do you really, truly never do it again? Or do you wait a while and decide you can now allot another 5%... or, worse yet, put in more in hope of recouping.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

shiboghe
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Re: Crypto-Currency

Post by shiboghe » Wed Dec 06, 2017 1:48 pm

Been thinking a lot about this myself lately, against my best interest.

In some perfect hindsight scenario even a little extra cash in bitcoin would have been extreme in changing my financial outcome. However, I think its unreasonable to expect returns like in the past. I also am uncomfortable with risking large amounts of my portfolio. Therefor even if the return is substantial but at least somewhat reasonable I don't think it would be a huge boon to my bottom line. However, because of the amount I am willing to risk in index funds the returns are more then I can reasonably expect from crytpocurrency.

At least this is what I am trying to convince myself of.

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curiouskitty
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Re: Crypto-Currency

Post by curiouskitty » Wed Dec 06, 2017 1:55 pm

Still lots of money to be made but be careful and don't invest in some random ICO. In my opinion, look for a solid team with a good track record with Bitcoin, Ethereum, etc. and invest in some of their new projects. If one blockchain gets ahead on scaling, the market will likely reward them handsomely especially if it looks like their rivals aren't close behind. Ethereum is having issues with transaction times due to CryptoKitties for the past few days as you likely heard in the news. Once one of the chains can support substantially more transactions, it will make more sense to integrate it into more applications for micropayments, as a database, etc.

So many of the coins are based on Ethereum that you could take some fun money, buy Ethereum, and then use that to diversity into some of the Ethereum (aka ERC-20) tokens.

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LadyGeek
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Re: Crypto-Currency

Post by LadyGeek » Wed Dec 06, 2017 4:32 pm

This thread is now in the Investing - Theory, News & General forum (asking about crypto-currency / Bitcoin investments).
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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greg24
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Re: Crypto-Currency

Post by greg24 » Wed Dec 06, 2017 4:41 pm

I am shorting Bitcoin and most other crypto-currencies.

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Re: Crypto-Currency

Post by azanon » Wed Dec 06, 2017 4:43 pm

nisiprius wrote:
Wed Dec 06, 2017 1:21 pm
5) Although there is a lot of support for the idea that it is OK to use some of your money as "fun money" to scratch your gambling itch so that you can keep it out of your core investing, I personally have two problems with the idea. A commonly mentioned allotment is 5%. The first problem is whether there isn't some way of getting more fun for the same amount of money. The second, which I have yet to see answered, is "what do you do if you lose it?" The idea is that you are limiting your possible losses to 5% and everyone can afford that big a loss. I agree that everyone can afford that big a loss, but I'm not sure whether people are really limiting their losses. The unspoken assumption is that you won't lose it--the worst that happens is you fail to beat the index. But it's possible, and the question I have is, if you lose your "fun money," what then? Do you really, truly never do it again? Or do you wait a while and decide you can now allot another 5%... or, worse yet, put in more in hope of recouping.
I just play "lucky for life" every time I fill up the car (one play), and if I lose it, I just buy another one next time cause it's only 2 dollars. And I don't have any plans to ever quit because, again, it's only 2 dollars a pop (and a charity too for my state). And it's fun knowing I have about a ~ 30 million to 1 chance of getting to quit my job every time I play.

But 5% of my portfolio for something fun where I'll probably lose my ***, such as bitcoin? I can't even comprehend considering doing something like that, much less actually doing it. I'm, as you say, just too boglehead.
Last edited by azanon on Wed Dec 06, 2017 4:46 pm, edited 2 times in total.

Swelfie
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Re: Crypto-Currency

Post by Swelfie » Wed Dec 06, 2017 4:45 pm

curiouskitty wrote:
Wed Dec 06, 2017 1:55 pm
Still lots of money to be made but be careful and don't invest in some random ICO. In my opinion, look for a solid team with a good track record with Bitcoin, Ethereum, etc. and invest in some of their new projects. If one blockchain gets ahead on scaling, the market will likely reward them handsomely especially if it looks like their rivals aren't close behind. Ethereum is having issues with transaction times due to CryptoKitties for the past few days as you likely heard in the news. Once one of the chains can support substantially more transactions, it will make more sense to integrate it into more applications for micropayments, as a database, etc.

So many of the coins are based on Ethereum that you could take some fun money, buy Ethereum, and then use that to diversity into some of the Ethereum (aka ERC-20) tokens.
Ethereum isn't having too much problem with the kitties really. It's more of a shock that came out of nowhere of very high gas transactions (because breeding kitties takes a lot of gas). There is a miner designated gas limit to keep spikiness down and it works well, but in this case it wasn't a spike as it was sustained, so the miners just needed to vote the limit up to a more appropriate level. Also, some wallets/institutions pay a maximum of gas prices so they don't way overpay on really spiky blocks. It appears coinbase does this as they were overly affected when the kitties drove the limited gas prices way above the statistical normal. Again, just a volatility stopgap that needed adjusting rather than a real challenge.

And remember. Ethereum was running more transaction volume than all other coins combined including Bitcoin BEFORE the kitties took over like tribbles in a warp coil.

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saltycaper
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Re: Crypto-Currency

Post by saltycaper » Wed Dec 06, 2017 4:52 pm

Swelfie wrote:
Wed Dec 06, 2017 4:45 pm

Ethereum isn't having too much problem with the kitties really. It's more of a shock that came out of nowhere of very high gas transactions (because breeding kitties takes a lot of gas). There is a miner designated gas limit to keep spikiness down and it works well, but in this case it wasn't a spike as it was sustained, so the miners just needed to vote the limit up to a more appropriate level. Also, some wallets/institutions pay a maximum of gas prices so they don't way overpay on really spiky blocks. It appears coinbase does this as they were overly affected when the kitties drove the limited gas prices way above the statistical normal. Again, just a volatility stopgap that needed adjusting rather than a real challenge.
This post indicates we are either on the verge of a great leap forward for civilization or on the precipice of a remarkable impending decline.

I hope to stick around to find out and to see if 30 years from now anybody has a clue as to what in the world Swelfie is talking about.
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greg24
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Re: Crypto-Currency

Post by greg24 » Wed Dec 06, 2017 4:53 pm

That post makes me feel really good about my shorts.

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saltycaper
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Re: Crypto-Currency

Post by saltycaper » Wed Dec 06, 2017 4:57 pm

greg24 wrote:
Wed Dec 06, 2017 4:53 pm
That post makes me feel really good about my shorts.
Whenever I'm out and about in business casual dress in the summer, and I go home and change into a pair of shorts, I feel really good about myself too.
"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said." --Alan Greenspan

SEAworld9
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Re: Crypto-Currency

Post by SEAworld9 » Wed Dec 06, 2017 5:04 pm

greg24 wrote:
Wed Dec 06, 2017 4:53 pm
That post makes me feel really good about my shorts.
what's your exposure and what are you looking to close out at? at what price will you fill, both low and high? bitcoin's gone from $11,739 to $13,457 just in the last 24 hours on gdax.

no condescendtion or negative tone implied... more so interested in how you approach shorting anything in a rapidly rising environment.
Last edited by SEAworld9 on Wed Dec 06, 2017 5:06 pm, edited 1 time in total.

J_Markov
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Re: Crypto-Currency

Post by J_Markov » Wed Dec 06, 2017 6:36 pm

greg24 wrote:
Wed Dec 06, 2017 4:41 pm
I am shorting Bitcoin and most other crypto-currencies.
How are you shorting Bitcoin?

J_Markov
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Re: Crypto-Currency

Post by J_Markov » Wed Dec 06, 2017 6:37 pm

One concern would be that if the Fed or any other central bank comes up with their own cryptocurrency Bitcoin and the other cryptocurrencies would basically have no value.

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