Winklevoss: The Case for $500,000 Bitcoin

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EnjoyIt
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

Fortune Seeker wrote: Sat Sep 12, 2020 7:52 pm
0.5% of a portfolio in anything is nothing but noise and a waste of one's time.
The reason is more volatile assets should take smaller percentage of your portfolio, unless you want to load up on that particular asset class' risk. Bitcoin is almost 10 times more volatile than gold, so 0.5% should be around a risk of 5% gold allocation. This is basically some diversification and hopefully a bit of return to balance out your stocks.
Sure, but then 0.5% of my portfolio will provide meaningless results. Especially if I rebalance back into and out of 0.5%.

And you nailed it correctly, 5% or more of one’s portfolio in bitcoin is a scary volatile choice.
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EnjoyIt
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

nisiprius wrote: Sat Sep 12, 2020 10:51 pm
EnjoyIt wrote: Sat Sep 12, 2020 5:24 pm ....I think we maybe can all agree that using bitcoin to transport money across the boarder may be a reasonable solution for some people....
I know exactly one person who's been in a situation like that. She left Venezuela for Argentina. What she used to transport money across the border was paper US dollars.
I don’t know anyone either who has chosen bitcoin. I know one person who used rare stamps as a way to transport money out of a volatile country. Their reasoning was that the border police were too stupid to understand their value.

Either way, using bitcoin in that manner is a possible choice though the process is relatively complex and I think for most people either too complex or has too many unknowns. For most people bitcoin is a confusing entity and I bet putting all of one’s wealth into it would be rather scary.
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am
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by am »

EnjoyIt wrote: Sun Sep 13, 2020 7:33 am
am wrote: Sat Sep 12, 2020 7:44 pm
Fortune Seeker wrote: Sat Sep 12, 2020 7:42 pm
EnjoyIt wrote: Sat Sep 12, 2020 6:35 pm GBTC has an AUM of 2%
BTCW has an AUM of 0.95%

We tend to frown upon high AUM fees around here.
Unless you are willing to take some risk and own bitcoin directly, there aren't many alternatives yet.
Coinbase is not risky. It’s holdings are mainly offline, insured, soon to go public and has a relatively long history without hacks.
Seriously, I see coinbase which is btw where my fraction of a bitcoin is held appears no different than MT. Gox. Also your comment of soon to be public does not mean anything. For years I have heard “soon to be” comments about bitcoin yet none of them have come to fruition.

I have very little faith in Coinbase or any other entity out there. History has not been kind regarding bitcoin fraud and theft. I use Coinbase solely because they made it relatively easy.
Why not use grayscale bitcoin trust then and let someone else worry about holding the coins? Sure, expenses are high and there are premiums, but it tracks price movements of bitcoin.
EnjoyIt
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

am wrote: Sun Sep 13, 2020 8:07 am
EnjoyIt wrote: Sun Sep 13, 2020 7:33 am
am wrote: Sat Sep 12, 2020 7:44 pm
Fortune Seeker wrote: Sat Sep 12, 2020 7:42 pm
EnjoyIt wrote: Sat Sep 12, 2020 6:35 pm GBTC has an AUM of 2%
BTCW has an AUM of 0.95%

We tend to frown upon high AUM fees around here.
Unless you are willing to take some risk and own bitcoin directly, there aren't many alternatives yet.
Coinbase is not risky. It’s holdings are mainly offline, insured, soon to go public and has a relatively long history without hacks.
Seriously, I see coinbase which is btw where my fraction of a bitcoin is held appears no different than MT. Gox. Also your comment of soon to be public does not mean anything. For years I have heard “soon to be” comments about bitcoin yet none of them have come to fruition.

I have very little faith in Coinbase or any other entity out there. History has not been kind regarding bitcoin fraud and theft. I use Coinbase solely because they made it relatively easy.
Why not use grayscale bitcoin trust then and let someone else worry about holding the coins? Sure, expenses are high and there are premiums, but it tracks price movements of bitcoin.
You answered that question and I have answered it earlier. High fees. 2% AUM fee is against everything a boglehead represents.

Plus I have bitcoin for fun and not to speculate if it gets stolen or goes to $0 it won’t really matter.
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Maverick3320
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Maverick3320 »

Anon9001 wrote: Fri Aug 28, 2020 1:35 pm There were threads on Bitcoin going back to 2011 here and I am astonished how these forum posters keep repeating the same line "scam" "worthless" even when it gone from 1$ to 11,000 USD. You would think they would have gotten more humble in their ramblings due to how wrong they got the out-come. I would not be suprised if they keep rambling about it being a scam even if it reaches 500,000 USD that Winkelovoss think is fair value. Don't rely on advice here regarding Bitcoins. These people don't understand it like they don't understand Tech stocks. As for my opinion It could go either way to Moon of 500,000 or 0. I will not make any predictions regarding this asset. It is too soon to say anything. It is like early Internet in terms of clumsiness and slowness.
I think judging a scam based strictly on the "value" today is pretty shortsighted. The biggest scam isn't the loss of value - it's the vulnerability of the exchanges/storage. I've lost count of how many exchanges have been hacked/robbed/shut down/disappeared with hundreds of millions of dollars' worth of bitcoins, litecoins, etc.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by nisiprius »

The word "reputable" often comes up in connection with exchanges.

bitcoin was systematically and continuously being stolen, or lost, or otherwise vanishing from Mt. Gox over a period of more than two years before its collapse in 2014.

My web searches so far have been unsuccessful but maybe someone else can help me. I am seeking some sources speaking to what Mt. Gox's reputation was from, say, mid-2011 to mid-2013. My belief is that it was considered highly reputable, if not the most reputable of all exchanges, up to the very time it collapsed. I would be interested in seeing evidence bearing for or against this.

The history of the Mt. Gox hack

Image

(I think much the same thing was true of the QuadrigaCX and Bitfinex exchanges, and the Tether USDT currency--i.e. they were generally regarded as "reputable" even while large amounts of assets were being lost or stolen).
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EnjoyIt
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

nisiprius wrote: Sun Sep 13, 2020 11:16 am The word "reputable" often comes up in connection with exchanges.

bitcoin was systematically and continuously being stolen, or lost, or otherwise vanishing from Mt. Gox over a period of more than two years before its collapse in 2014.

My web searches so far have been unsuccessful but maybe someone else can help me. I am seeking some sources speaking to what Mt. Gox's reputation was from, say, mid-2011 to mid-2013. My belief is that it was considered highly reputable, if not the most reputable of all exchanges, up to the very time it collapsed. I would be interested in seeing evidence bearing for or against this.

The history of the Mt. Gox hack

Image

(I think much the same thing was true of the QuadrigaCX and Bitfinex exchanges, and the Tether USDT currency--i.e. they were generally regarded as "reputable" even while large amounts of assets were being lost or stolen).
I wish I could provide a link, but back then Mt. gox was the place to store your coins unless you chose to keep your own wallet Mt. Gox was pretty much The reputable location at the time.

I seriously don’t trust a single one of these companies because of how easy coins have been pilfered From the inside in the past. I’m honestly surprised how secure so many people feel with such storage facilities.

I am 100% positive there are hundreds if not thousands of people trying to figure out how to steal and defraud. The next theft is coming the only question is how and when.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by AlphaLess »

MotoTrojan wrote: Fri Aug 28, 2020 1:33 pm The scarcity argument for gold while on the surface kind of nuts is a pretty fascinating concept. Flying across the world sounded crazy not that long ago, so at some point we may be able to access the vast amounts of gold beneath our deepest oceans and in space. More realistically though I think a bigger risk is a supply-shock from a central bank deciding to do away with it.

Rational Reminder had a great episode recently on gold I recommend a listen to: https://rationalreminder.ca/podcast/111

As to the Winklevoss twins argument, I just don't understand how you can talk about scarcity (yes I get that BTC has a fixed number available) when you could make an infinite number of functional cryptocurrencies. There is a reason gold is gold and I can't just show up with some carbon steel and demand $2000/oz. If gold was more plentiful it would be used in a staggering amount of applications, but even with it's scarcity there are many that demand it's use and will gladly pay the price.
Exactly!

Not only, that but you can have infinite amount of bitcoin block-chains running.

Every time some subset of miners are upset, they do a fork: in plain people speak, they copy the data for block-chain, call it a different crypto, and go play in their sandbox.

Literally, it is a scam.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by AlphaLess »

EnjoyIt wrote: Sun Sep 13, 2020 11:36 am I am 100% positive there are hundreds if not thousands of people trying to figure out how to steal and defraud. The next theft is coming the only question is how and when.
150% agreed.

Not only that, but the entire security of the ecosystem is suspect.

There is no incentive for the thieves to crash the whole thing in one big bang.

Their incentives are two-fold:
- keep the prices high,
- slowly steal coins, and convert them to other currencies.

This is the largest scam in the history of the earth.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by oldfort »

Northern Flicker wrote: Sat Sep 12, 2020 5:03 pm Ok, that would work. I've been using sequences of sentences to generate non-redundant randomized 256-bit password safe keys using a similar algorithm, and have not found it difficult to construct long texts that I can remember.

For assets being stored long-term in offline wallet though, why wouldn't you just destroy the hardware wallet and remember the seedphrase as a matter of practice?
Because almost no one remembers 256-bit randomized passwords, and absolutely no one remembers 256-bit randomized passwords they aren't forced to type in on a daily basis. Banks choose 4-digit pins with 13-bits of entropy because it represents a reasonable balance between security and having too many customers need to reset their pins.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

AlphaLess wrote: Sun Sep 13, 2020 11:54 am
EnjoyIt wrote: Sun Sep 13, 2020 11:36 am I am 100% positive there are hundreds if not thousands of people trying to figure out how to steal and defraud. The next theft is coming the only question is how and when.
150% agreed.

Not only that, but the entire security of the ecosystem is suspect.

There is no incentive for the thieves to crash the whole thing in one big bang.

Their incentives are two-fold:
- keep the prices high,
- slowly steal coins, and convert them to other currencies.

This is the largest scam in the history of the earth.
Again, bitcoin on its own is not a scam but there are plenty of people out there looking to scam the system. If history repeats itself and often it does. People will lose money by some fraudster/thief. It is inevitable.

To be fair. There is plenty of theft and fraud in fiat currency going on as well but at least I can protect myself by keeping cash in the bank and not falling for some scam. If I hold my crypto at Coinbase I’m at the mercy of Coinbase.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by ohboy! »

You think coinbase is like mt gox but you use it because its easy? Lmao. In ten minutes you could transfer your holdings to cold storage and be the only one responsible. Prob best to make two copies and store different places if you do. But sounds like your happy feeling unsecure at coinbase. Which is way different than mt gox.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

ohboy! wrote: Sun Sep 13, 2020 1:39 pm You think coinbase is like mt gox but you use it because its easy? Lmao. In ten minutes you could transfer your holdings to cold storage and be the only one responsible. Prob best to make two copies and store different places if you do. But sounds like your happy feeling unsecure at coinbase. Which is way different than mt gox.
Listen, I don't care about the value of bitcoin. If it goes to $0 my life will not be affected. If Coinbase gets hacked or my bitcoin holdings get stolen, it will be an insignificant loss. I am not a speculator and care less about what will happen with bitcoin and only own some as a means of curiosity. I would rather use Coinbase because it is easy.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by am »

EnjoyIt wrote: Sun Sep 13, 2020 2:12 pm
ohboy! wrote: Sun Sep 13, 2020 1:39 pm You think coinbase is like mt gox but you use it because its easy? Lmao. In ten minutes you could transfer your holdings to cold storage and be the only one responsible. Prob best to make two copies and store different places if you do. But sounds like your happy feeling unsecure at coinbase. Which is way different than mt gox.
Listen, I don't care about the value of bitcoin. If it goes to $0 my life will not be affected. If Coinbase gets hacked or my bitcoin holdings get stolen, it will be an insignificant loss. I am not a speculator and care less about what will happen with bitcoin and only own some as a means of curiosity. I would rather use Coinbase because it is easy.
Relax. Coinbase is as safe as it gets. From their site:

“Coinbase maintains 98% or more of customer digital currency in cold storage, with the remainder in secure online servers as necessary to serve the liquidity needs of our customers.”

“Coinbase maintains commercial criminal insurance in an aggregate amount that is greater than the value of digital currency we maintain in online storage. Our insurance policy is made available through a combination of third-party insurance underwriters and Coinbase, who is a co-insurer under the policy.

The policy insures against theft of digital currency that results from a security breach or hack, employee theft, or fraudulent transfer.“

Not sure what else you can ask for? A guarantee that bitcoin won’t go to 0 :D
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by nisiprius »

am wrote: Sun Sep 13, 2020 3:50 pm...Coinbase is as safe as it gets. From their site:

“Coinbase maintains 98% or more of customer digital currency in cold storage, with the remainder in secure online servers as necessary to serve the liquidity needs of our customers.”

“Coinbase maintains commercial criminal insurance in an aggregate amount that is greater than the value of digital currency we maintain in online storage. Our insurance policy is made available through a combination of third-party insurance underwriters and Coinbase, who is a co-insurer under the policy.

The policy insures against theft of digital currency that results from a security breach or hack, employee theft, or fraudulent transfer.“

Not sure what else you can ask for? A guarantee that bitcoin won’t go to 0 :D
I'll ask, because I don't know.

Are there independent auditors?

Is there government oversight?

Is there a parallel with bank examiners?

And if, for any reason, coinbase becomes insolvent with large amounts of assets missing, do depositors have any recourse other than going to bankruptcy court and getting a recovery that is limited to whatever assets remain?

I have personally had a credit union, in which I had serious money, become insolvent and it literally was not even a nuisance. Nothing changed from my point of view but the name over the door and the logo on the statements.

Can you give me a similar example of a bitcoin exchange that has folded, as a result of which depositors experienced no losses and experienced almost no inconvenience?
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by am »

nisiprius wrote: Sun Sep 13, 2020 3:55 pm
am wrote: Sun Sep 13, 2020 3:50 pm...Coinbase is as safe as it gets. From their site:

“Coinbase maintains 98% or more of customer digital currency in cold storage, with the remainder in secure online servers as necessary to serve the liquidity needs of our customers.”

“Coinbase maintains commercial criminal insurance in an aggregate amount that is greater than the value of digital currency we maintain in online storage. Our insurance policy is made available through a combination of third-party insurance underwriters and Coinbase, who is a co-insurer under the policy.

The policy insures against theft of digital currency that results from a security breach or hack, employee theft, or fraudulent transfer.“

Not sure what else you can ask for? A guarantee that bitcoin won’t go to 0 :D
I'll ask, because I don't know.

Are there independent auditors?

Is there government oversight?

Is there a parallel with bank examiners?

And if, for any reason, coinbase becomes insolvent with large amounts of assets missing, do depositors have any recourse other than going to bankruptcy court and getting a recovery that is limited to whatever assets remain?

I have personally had a credit union, in which I had serious money, become insolvent and it literally was not even a nuisance. Nothing changed from my point of view but the name over the door and the logo on the statements.

Can you give me a similar example of a bitcoin exchange that has folded, as a result of which depositors experienced no losses and experienced almost no inconvenience?
You can’t compare an unregulated crptyo exchange to a credit union. Here is an article on measures they take For security.

https://blockonomi.com/is-coinbase-safe/
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

am wrote: Sun Sep 13, 2020 6:06 pm
nisiprius wrote: Sun Sep 13, 2020 3:55 pm
am wrote: Sun Sep 13, 2020 3:50 pm...Coinbase is as safe as it gets. From their site:

“Coinbase maintains 98% or more of customer digital currency in cold storage, with the remainder in secure online servers as necessary to serve the liquidity needs of our customers.”

“Coinbase maintains commercial criminal insurance in an aggregate amount that is greater than the value of digital currency we maintain in online storage. Our insurance policy is made available through a combination of third-party insurance underwriters and Coinbase, who is a co-insurer under the policy.

The policy insures against theft of digital currency that results from a security breach or hack, employee theft, or fraudulent transfer.“

Not sure what else you can ask for? A guarantee that bitcoin won’t go to 0 :D
I'll ask, because I don't know.

Are there independent auditors?

Is there government oversight?

Is there a parallel with bank examiners?

And if, for any reason, coinbase becomes insolvent with large amounts of assets missing, do depositors have any recourse other than going to bankruptcy court and getting a recovery that is limited to whatever assets remain?

I have personally had a credit union, in which I had serious money, become insolvent and it literally was not even a nuisance. Nothing changed from my point of view but the name over the door and the logo on the statements.

Can you give me a similar example of a bitcoin exchange that has folded, as a result of which depositors experienced no losses and experienced almost no inconvenience?
You can’t compare an unregulated crptyo exchange to a credit union. Here is an article on measures they take For security.

https://blockonomi.com/is-coinbase-safe/
I plead ignorance. How do we know all that is actually true and not just something they say?

I’m sure you can understand that one would be skeptical in an industry that has a longstanding history of fraud and theft.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by AlphaLess »

EnjoyIt wrote: Sun Sep 13, 2020 12:02 pm
AlphaLess wrote: Sun Sep 13, 2020 11:54 am
EnjoyIt wrote: Sun Sep 13, 2020 11:36 am I am 100% positive there are hundreds if not thousands of people trying to figure out how to steal and defraud. The next theft is coming the only question is how and when.
150% agreed.

Not only that, but the entire security of the ecosystem is suspect.

There is no incentive for the thieves to crash the whole thing in one big bang.

Their incentives are two-fold:
- keep the prices high,
- slowly steal coins, and convert them to other currencies.

This is the largest scam in the history of the earth.
Again, bitcoin on its own is not a scam but there are plenty of people out there looking to scam the system. If history repeats itself and often it does. People will lose money by some fraudster/thief. It is inevitable.

To be fair. There is plenty of theft and fraud in fiat currency going on as well but at least I can protect myself by keeping cash in the bank and not falling for some scam. If I hold my crypto at Coinbase I’m at the mercy of Coinbase.
The concept of proof of work and blockchain are not a scam. Those are fairly well understood cryptographic concepts.

Proof of work and blockchain can be used for some purpose, e.g., to certify that some activity is done, or that some party possesses something.

But claiming that some sequence of ones and zero related to proof of work stored on some specific block-chain (bitcoin) is somehow a currency, store of value, rare, or going to appreciate are all a scam.

If you carefully follow the marketing pitch for bitcoin as being a currency, replacement for gold, easy way to pay for goods and services, or a means for transfer of cash around the world have either not worked out or have served criminal enterprises, primarily.

As applications of bitcoin have failed to materialize and take off, the marketing pitch has carefully changed, getting amplified with every failure. The only remaining application is speculation. With $340B in market cap, and a $285B in daily dollar turnover, it benefits almost no one except those parties that are pumping it.

These are typical signs of a scam. The way scam proliferates has to do with marketing, adoption, and continuous pumping. Eventually, parties who are left holding the bag at the end lose money.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Northern Flicker »

oldfort wrote: Sun Sep 13, 2020 11:59 am
Northern Flicker wrote: Sat Sep 12, 2020 5:03 pm Ok, that would work. I've been using sequences of sentences to generate non-redundant randomized 256-bit password safe keys using a similar algorithm, and have not found it difficult to construct long texts that I can remember.

For assets being stored long-term in offline wallet though, why wouldn't you just destroy the hardware wallet and remember the seedphrase as a matter of practice?
Because almost no one remembers 256-bit randomized passwords, and absolutely no one remembers 256-bit randomized passwords they aren't forced to type in on a daily basis. Banks choose 4-digit pins with 13-bits of entropy because it represents a reasonable balance between security and having too many customers need to reset their pins.
But the whole point of what bogivan posted was not to have to remember a 256-bit password, instead using a long mnemonic text of perhaps several regular sentences that hashes down to a randomized 256-bit password.

I didn't look at the code bogivan provided a link to for generating the 256-bit seed, but at first blush the algorithm appears to be inferior to a similar algorithm used by the Keepass password safe which compresses the text before computing the one-way hash and tells you how many non-redundant bits are in the key so that you can add text as needed to target a 256-bit fully randomized key. Perhaps the wallet seed generator does that as well.

If you have to remember the long text anyway, the existence of the hardware wallet is just an additional source of possible loss, but I guess you also could view it as a redundant copy so two things must be lost to lose the coins.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Northern Flicker »

I do believe that the cryptocurrency ecosystem is a veritable minefield for people without a tech and information security background, and even they may run into problems.
Risk is not a guarantor of return.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by 000 »

Northern Flicker wrote: Sun Sep 13, 2020 10:34 pm I do believe that the cryptocurrency ecosystem is a veritable minefield for people without a tech and information security background, and even they may run into problems.
Agreed.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by oldfort »

Northern Flicker wrote: Sun Sep 13, 2020 10:30 pm
oldfort wrote: Sun Sep 13, 2020 11:59 am
Northern Flicker wrote: Sat Sep 12, 2020 5:03 pm Ok, that would work. I've been using sequences of sentences to generate non-redundant randomized 256-bit password safe keys using a similar algorithm, and have not found it difficult to construct long texts that I can remember.

For assets being stored long-term in offline wallet though, why wouldn't you just destroy the hardware wallet and remember the seedphrase as a matter of practice?
Because almost no one remembers 256-bit randomized passwords, and absolutely no one remembers 256-bit randomized passwords they aren't forced to type in on a daily basis. Banks choose 4-digit pins with 13-bits of entropy because it represents a reasonable balance between security and having too many customers need to reset their pins.
But the whole point of what bogivan posted was not to have to remember a 256-bit password, instead using a long mnemonic text of perhaps several regular sentences that hashes down to a randomized 256-bit password.

I didn't look at the code bogivan provided a link to for generating the 256-bit seed, but at first blush the algorithm appears to be inferior to a similar algorithm used by the Keepass password safe which compresses the text before computing the one-way hash and tells you how many non-redundant bits are in the key so that you can add text as needed to target a 256-bit fully randomized key. Perhaps the wallet seed generator does that as well.

If you have to remember the long text anyway, the existence of the hardware wallet is just an additional source of possible loss, but I guess you also could view it as a redundant copy so two things must be lost to lose the coins.
Except no one remembers long mnemonic text with 256-bits of entropy either, no matter what CS myths are propagated by a XKCD comic. Anything with 256-bits of entropy must be written down or stored somewhere and will have a very high probability of being forgotten. Any IT system which requires someone to remember 256-bits of entropy without writing it down is completely detached from reality.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

AlphaLess wrote: Sun Sep 13, 2020 9:17 pm
EnjoyIt wrote: Sun Sep 13, 2020 12:02 pm
AlphaLess wrote: Sun Sep 13, 2020 11:54 am
EnjoyIt wrote: Sun Sep 13, 2020 11:36 am I am 100% positive there are hundreds if not thousands of people trying to figure out how to steal and defraud. The next theft is coming the only question is how and when.
150% agreed.

Not only that, but the entire security of the ecosystem is suspect.

There is no incentive for the thieves to crash the whole thing in one big bang.

Their incentives are two-fold:
- keep the prices high,
- slowly steal coins, and convert them to other currencies.

This is the largest scam in the history of the earth.
Again, bitcoin on its own is not a scam but there are plenty of people out there looking to scam the system. If history repeats itself and often it does. People will lose money by some fraudster/thief. It is inevitable.

To be fair. There is plenty of theft and fraud in fiat currency going on as well but at least I can protect myself by keeping cash in the bank and not falling for some scam. If I hold my crypto at Coinbase I’m at the mercy of Coinbase.
The concept of proof of work and blockchain are not a scam. Those are fairly well understood cryptographic concepts.

Proof of work and blockchain can be used for some purpose, e.g., to certify that some activity is done, or that some party possesses something.

But claiming that some sequence of ones and zero related to proof of work stored on some specific block-chain (bitcoin) is somehow a currency, store of value, rare, or going to appreciate are all a scam.

If you carefully follow the marketing pitch for bitcoin as being a currency, replacement for gold, easy way to pay for goods and services, or a means for transfer of cash around the world have either not worked out or have served criminal enterprises, primarily.

As applications of bitcoin have failed to materialize and take off, the marketing pitch has carefully changed, getting amplified with every failure. The only remaining application is speculation. With $340B in market cap, and a $285B in daily dollar turnover, it benefits almost no one except those parties that are pumping it.

These are typical signs of a scam. The way scam proliferates has to do with marketing, adoption, and continuous pumping. Eventually, parties who are left holding the bag at the end lose money.
I couldn’t agree more with you on the logistics. Although I don’t think most of the bitcoin players here are consciously trying to scam the people around them out of their money. Sure they are incentivized to promote bitcoin. Sure it is in their best interest to believe that bitcoin is the future. But, I think most people who own bitcoin are not actively trying to scam others.

The thing with bitcoin, no matter how irrational and useless you and I think it is, there are plenty of people who believe otherwise. Who knows how long that will last. As they say, the market can be irrational far longer than one can remain solvent. Although I bet the inevitable value of bitcoin is $0 I would not speculate any of my money on that bet.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Valuethinker »

AlphaLess wrote: Sun Sep 13, 2020 9:17 pm
These are typical signs of a scam. The way scam proliferates has to do with marketing, adoption, and continuous pumping. Eventually, parties who are left holding the bag at the end lose money.
My understanding is that with Bitcoin, as few as 10 individuals/ entities might hold 80% of what is in existence?

I cannot remember where I read that (I had a colleague who was an early miner, sold out too early, and he told me that).

So there's definitely a someone who benefits if the price is ramped.

I can't see this as meriting discussion as an investment given that the value is pure speculation. As a speculative punt, maybe, but as an investment?

I have a similar feeling about gold, but accept the argument that gold has been a centuries long term store of value. It's convenient to store due to its density, but not convenient to use. There is certainly a rising scarcity story around gold - the cost of producing incremental gold seems to be rising due to age of deposit extraction and also probably increased environmental restrictions. New gold deposits are in more and more difficult locations to extract from.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by mmcmonster »

EnjoyIt wrote: Sat Aug 29, 2020 12:13 am[...]
What bitcoin really is, is a speculative tool. People who buy it, do so with no other purpose than the hope that one day it will be worth a lot more than the purchase price. That’s why I own a fraction of a coin. I do so because I am enjoying the ride and maybe, if I get lucky, I can sell it for far more than what I bought it for. You never know.
Interesting. So would you consider Bitcoin a surrogate for world disposable income?

ie: The more disposable income the world has, the more likely they'll put it in a speculative investment. And since Bitcoin has a low barrier of entry and is available for purchase anywhere, the price of Bitcoin will continue to go up (so long as the general population considers it an investment).

This sort of makes sense to me. In times like now, where some people have extra cash and confused/wary about entering the stock market, they turn to Bitcoin.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by March2009 »

My problem with bitcoin, and all non-sovereign currencies not backed by a commodity or pegged to a sovereign currency, is that my taxes are NOT due in bitcoin, they are due in USD (Federal, State, Local). Our government, largest employer by far, pays all salaries in USD. If I want to do business with them, I need to accept USD and more importantly, if I want to avoid jail, I need USD to pay taxes. As a result, the USD is valuable to me and all Americans. In summary, a gold coin is valuable since I can make something out of it, and a USD is valuable since I need it for taxes. Other sovereign currencies are valuable because I know other people require it to pay their taxes. Bitcoin doesn't have that kind of value. If the value is in ease of transactions across many currencies, then there are thousands of alternatives to bitcoin. If the value is a transaction that can be conducted secretly, then I can see the value to that but again, there are other alternatives and I don't see bitcoin gaining a monopoly on secret transactions.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by nisiprius »

I think the fact that 20% of all bitcoin ever produced has been irrecoverably lost is a serious concern. I suppose it can be argued that it's no worse than the 20% taken by hedge funds, if you are multiplying your money a hundredfold a 20% statistical haircut doesn't seem too bad.

But are bitcoin enthusiasts sincere believers in bitcoin simply as a stable store of value and medium of exchange? Or is there, as I suspect, a very serious expectation that the engineered scarcity will continue to produce robust growth in value, a high rate of return?

I wonder if there is any similar estimate for gold?

Planet Money says there is currently $18 billion in unclaimed cash being held by the Federal government. M1 is $3 trillion. 20% of M1 would be $600 billion. I don't know a reasonable multiplier for the $18 billion to take account of other kinds of losses.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Valuethinker »

nisiprius wrote: Mon Sep 14, 2020 8:47 am I think the fact that 20% of all bitcoin ever produced has been irrecoverably lost is a serious concern. I suppose it can be argued that it's no worse than the 20% taken by hedge funds, if you are multiplying your money a hundredfold a 20% statistical haircut doesn't seem too bad.

But are bitcoin enthusiasts sincere believers in bitcoin simply as a stable store of value and medium of exchange? Or is there, as I suspect, a very serious expectation that the engineered scarcity will continue to produce robust growth in value, a high rate of return?

I wonder if there is any similar estimate for gold?

Planet Money says there is currently $18 billion in unclaimed cash being held by the Federal government. M1 is $3 trillion. 20% of M1 would be $600 billion. I don't know a reasonable multiplier for the $18 billion to take account of other kinds of losses.
Campbell Harvey at Duke produced a paper on gold in portfolios.

I don't think there is any agreement re what its returns will be.

The world supply grows by less than 1% a year but conversely most of the gold ever mined is sitting in vaults somewhere.

It is broadly thought that its tendency to be anti correlated w stock & bond markets is very useful.

But on that, even, there is no consensus. And recently it appears to be behaving more as a negatively correlated asset w real interest rates than anything else. As bond yields fall, gold rises.

I am not sure if it showed its hedging properties in March.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by yosim »

You leave your bitcoin on any exchange and it gets stolen then that's your lookout

Not your keys, not your bitcoin
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Fortune Seeker »

I am not sure if it (gold) showed its hedging properties in March.
Gold had about 13% drop in feb-march, in contrast to Bitcoin which had a drop of 60% in value.

So mostly a risk-off asset, but it was very weak as a hedge.

Now Bitcoin was acting as risk-on asset and more volatile than stocks at that.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

mmcmonster wrote: Mon Sep 14, 2020 5:28 am
EnjoyIt wrote: Sat Aug 29, 2020 12:13 am[...]
What bitcoin really is, is a speculative tool. People who buy it, do so with no other purpose than the hope that one day it will be worth a lot more than the purchase price. That’s why I own a fraction of a coin. I do so because I am enjoying the ride and maybe, if I get lucky, I can sell it for far more than what I bought it for. You never know.
Interesting. So would you consider Bitcoin a surrogate for world disposable income?

ie: The more disposable income the world has, the more likely they'll put it in a speculative investment. And since Bitcoin has a low barrier of entry and is available for purchase anywhere, the price of Bitcoin will continue to go up (so long as the general population considers it an investment).

This sort of makes sense to me. In times like now, where some people have extra cash and confused/wary about entering the stock market, they turn to Bitcoin.
It is not uncommon for those skeptical of equities to put their cash elsewhere. Very common locations are real estate, commodities, and collectibles. I find bitcoin to be pretty complex compared more tangible assets such the aforementioned real estate, collectibles, or commodities. If I want, I can easily buy gold/silver coins or purchase a collectible car, painting, or some other trinket. With bitcoin one needs to have a baseline understanding and then figure out what type of wallet they want and how to get access to it. It may not be difficult for the younger crowed or those who deal with tech on a regular basis, but that is not the case for most.

Either way, I believe most people turn to bitcoin because of greed, fear of missing out, and/or a desire to gamble a little. This is especially true once one realizes that bitcoin is a speculative play based on the desire to sell one day to someone else at a higher price. They are basically following "the greater fool theory." With such a volatile play, one can get lucky and win some decent cash in the process.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by silent_john »

nisiprius wrote: Mon Sep 14, 2020 8:47 am But are bitcoin enthusiasts sincere believers in bitcoin simply as a stable store of value and medium of exchange? Or is there, as I suspect, a very serious expectation that the engineered scarcity will continue to produce robust growth in value, a high rate of return?
Mr Money Moustache said it best

"The real test of if you should be a cryptocurrency supporter: would you be exactly as passionate and spend the same amount of time thinking about it, if Bitcoin were still an obscure piece of code, worth less than one cent, and offered no chance of ever earning you any money? "
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Enganerd »

nisiprius wrote: Mon Sep 14, 2020 8:47 am But are bitcoin enthusiasts sincere believers in bitcoin simply as a stable store of value and medium of exchange? Or is there, as I suspect, a very serious expectation that the engineered scarcity will continue to produce robust growth in value, a high rate of return?

I wonder if there is any similar estimate for gold?
I think you were discussing amount lost or absent from circulation, not the link between scarcity and value. But if you were discussing the latter the below article discusses a model linking the stock to flow of both btc and gold to value. The btc proponents I know respect this relationship.

https://medium.com/@100trillionUSD/mode ... fa0fc03e25

I do knot know enough statistics to fully comprehend the following quote below the scatter plot in the Model section about halfway through the article:

"Fitting a linear regression to the data confirms what can be seen with the naked eye: a statistically significant relationship between SF and market value (95% R2, significance of F 2.3E-17, p-Value of slope 2.3E-17). The likelihood that the relationship between SF and market value is caused by chance is close to zero. Of course other factors also impact price, regulation, hacks and other news, that is why R2 is not 100% (and not all dots are on the straight black line). However, the dominant driving factor seems to be scarcity / SF."

Does that simply mean that in given x number of points the fact that they follow such a relationship is close to zero, if each point is random. Or as I think the author is implying, that given that both stock to flow and the value of btc have been increasing, the fact that it follows such a relationship this closely is near impossible.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by AlphaLess »

Valuethinker wrote: Mon Sep 14, 2020 4:50 am
AlphaLess wrote: Sun Sep 13, 2020 9:17 pm
These are typical signs of a scam. The way scam proliferates has to do with marketing, adoption, and continuous pumping. Eventually, parties who are left holding the bag at the end lose money.
My understanding is that with Bitcoin, as few as 10 individuals/ entities might hold 80% of what is in existence?

I cannot remember where I read that (I had a colleague who was an early miner, sold out too early, and he told me that).

So there's definitely a someone who benefits if the price is ramped.

I can't see this as meriting discussion as an investment given that the value is pure speculation. As a speculative punt, maybe, but as an investment?

I have a similar feeling about gold, but accept the argument that gold has been a centuries long term store of value. It's convenient to store due to its density, but not convenient to use. There is certainly a rising scarcity story around gold - the cost of producing incremental gold seems to be rising due to age of deposit extraction and also probably increased environmental restrictions. New gold deposits are in more and more difficult locations to extract from.
Gold has industrial and consumer applications, so that is different.

Bitcoin has no industrial or consumer applications.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Northern Flicker »

oldfort wrote: Sun Sep 13, 2020 11:32 pm
Northern Flicker wrote: Sun Sep 13, 2020 10:30 pm
oldfort wrote: Sun Sep 13, 2020 11:59 am
Northern Flicker wrote: Sat Sep 12, 2020 5:03 pm Ok, that would work. I've been using sequences of sentences to generate non-redundant randomized 256-bit password safe keys using a similar algorithm, and have not found it difficult to construct long texts that I can remember.

For assets being stored long-term in offline wallet though, why wouldn't you just destroy the hardware wallet and remember the seedphrase as a matter of practice?
Because almost no one remembers 256-bit randomized passwords, and absolutely no one remembers 256-bit randomized passwords they aren't forced to type in on a daily basis. Banks choose 4-digit pins with 13-bits of entropy because it represents a reasonable balance between security and having too many customers need to reset their pins.
But the whole point of what bogivan posted was not to have to remember a 256-bit password, instead using a long mnemonic text of perhaps several regular sentences that hashes down to a randomized 256-bit password.

I didn't look at the code bogivan provided a link to for generating the 256-bit seed, but at first blush the algorithm appears to be inferior to a similar algorithm used by the Keepass password safe which compresses the text before computing the one-way hash and tells you how many non-redundant bits are in the key so that you can add text as needed to target a 256-bit fully randomized key. Perhaps the wallet seed generator does that as well.

If you have to remember the long text anyway, the existence of the hardware wallet is just an additional source of possible loss, but I guess you also could view it as a redundant copy so two things must be lost to lose the coins.
Except no one remembers long mnemonic text with 256-bits of entropy either, no matter what CS myths are propagated by a XKCD comic. Anything with 256-bits of entropy must be written down or stored somewhere and will have a very high probability of being forgotten. Any IT system which requires someone to remember 256-bits of entropy without writing it down is completely detached from reality.
If it is your method of restoring from a hardware failure, it is critical that you maintain it reliably somewhere, somehow.
Risk is not a guarantor of return.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by oldfort »

Northern Flicker wrote: Mon Sep 14, 2020 10:45 pm
oldfort wrote: Sun Sep 13, 2020 11:32 pm
Northern Flicker wrote: Sun Sep 13, 2020 10:30 pm
oldfort wrote: Sun Sep 13, 2020 11:59 am
Northern Flicker wrote: Sat Sep 12, 2020 5:03 pm Ok, that would work. I've been using sequences of sentences to generate non-redundant randomized 256-bit password safe keys using a similar algorithm, and have not found it difficult to construct long texts that I can remember.

For assets being stored long-term in offline wallet though, why wouldn't you just destroy the hardware wallet and remember the seedphrase as a matter of practice?
Because almost no one remembers 256-bit randomized passwords, and absolutely no one remembers 256-bit randomized passwords they aren't forced to type in on a daily basis. Banks choose 4-digit pins with 13-bits of entropy because it represents a reasonable balance between security and having too many customers need to reset their pins.
But the whole point of what bogivan posted was not to have to remember a 256-bit password, instead using a long mnemonic text of perhaps several regular sentences that hashes down to a randomized 256-bit password.

I didn't look at the code bogivan provided a link to for generating the 256-bit seed, but at first blush the algorithm appears to be inferior to a similar algorithm used by the Keepass password safe which compresses the text before computing the one-way hash and tells you how many non-redundant bits are in the key so that you can add text as needed to target a 256-bit fully randomized key. Perhaps the wallet seed generator does that as well.

If you have to remember the long text anyway, the existence of the hardware wallet is just an additional source of possible loss, but I guess you also could view it as a redundant copy so two things must be lost to lose the coins.
Except no one remembers long mnemonic text with 256-bits of entropy either, no matter what CS myths are propagated by a XKCD comic. Anything with 256-bits of entropy must be written down or stored somewhere and will have a very high probability of being forgotten. Any IT system which requires someone to remember 256-bits of entropy without writing it down is completely detached from reality.
If it is your method of restoring from a hardware failure, it is critical that you maintain it reliably somewhere, somehow.
Memorization is not a reliable method for storage.
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Valuethinker »

EnjoyIt wrote: Mon Sep 14, 2020 1:03 pm
mmcmonster wrote: Mon Sep 14, 2020 5:28 am
EnjoyIt wrote: Sat Aug 29, 2020 12:13 am[...]
What bitcoin really is, is a speculative tool. People who buy it, do so with no other purpose than the hope that one day it will be worth a lot more than the purchase price. That’s why I own a fraction of a coin. I do so because I am enjoying the ride and maybe, if I get lucky, I can sell it for far more than what I bought it for. You never know.
Interesting. So would you consider Bitcoin a surrogate for world disposable income?

ie: The more disposable income the world has, the more likely they'll put it in a speculative investment. And since Bitcoin has a low barrier of entry and is available for purchase anywhere, the price of Bitcoin will continue to go up (so long as the general population considers it an investment).

This sort of makes sense to me. In times like now, where some people have extra cash and confused/wary about entering the stock market, they turn to Bitcoin.
It is not uncommon for those skeptical of equities to put their cash elsewhere. Very common locations are real estate, commodities, and collectibles. I find bitcoin to be pretty complex compared more tangible assets such the aforementioned real estate, collectibles, or commodities. If I want, I can easily buy gold/silver coins or purchase a collectible car, painting, or some other trinket. With bitcoin one needs to have a baseline understanding and then figure out what type of wallet they want and how to get access to it. It may not be difficult for the younger crowed or those who deal with tech on a regular basis, but that is not the case for most.

Either way, I believe most people turn to bitcoin because of greed, fear of missing out, and/or a desire to gamble a little. This is especially true once one realizes that bitcoin is a speculative play based on the desire to sell one day to someone else at a higher price. They are basically following "the greater fool theory." With such a volatile play, one can get lucky and win some decent cash in the process.
Real estate generates an inherent return from rent plus decent chance of value appreciation. It's clearly the "third leg of the stool" alongside stocks + bonds.

Commodities don't generate an inherent return *except* arguments about "roll return"? Once large amounts of institutional investor money started chasing these, that went away. Commodity markets are not deep and liquid enough to accommodate large amounts of institutional money. Commodities may be inflation hedges, but you have storage costs.

Collectibles? Generally I would say they are pretty bad bets, because fashions change. Unless you are in a position to trade Old Masters - that Van Gogh your great aunt left you, etc. Wine. Fine art. Classic cars. I look at the indices and wonder how much reality there is underlying them. We have many threads here about people trying to unload their baseball card collections for example.

However collectibles provide the opportunity for insider knowledge & skill. Perhaps it was obvious 25 years ago that Dodge Chargers 1968-72, would become hot properties. All of us watching "Dukes of Hazard" as kids ;-). I might then also predict that when we start to sell to pay for our nursing homes, the values will fall (my brother says that has already happened to Ford Model Ts & As, from the older generation of collectors & their estates). The bid-ask spreads are also astronomic. I think Sotheby's and Christies start at 25% commission?

Gold has a particular place - although it has some uses, the main uses are decorative and as a form of financial reserve eg by Central Banks. Silver, because it is less valuable, and perhaps because of supply-demand, is also less of a store of value, it seems.

Negative real interest rates, and now negative nominal rates, have tended to push up the value of *all* of these assets. They've become another set of examples of the carry trade (borrow cheaply and invest in something riskier with a higher prospective return).
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

Valuethinker wrote: Tue Sep 15, 2020 8:24 am
EnjoyIt wrote: Mon Sep 14, 2020 1:03 pm
mmcmonster wrote: Mon Sep 14, 2020 5:28 am
EnjoyIt wrote: Sat Aug 29, 2020 12:13 am[...]
What bitcoin really is, is a speculative tool. People who buy it, do so with no other purpose than the hope that one day it will be worth a lot more than the purchase price. That’s why I own a fraction of a coin. I do so because I am enjoying the ride and maybe, if I get lucky, I can sell it for far more than what I bought it for. You never know.
Interesting. So would you consider Bitcoin a surrogate for world disposable income?

ie: The more disposable income the world has, the more likely they'll put it in a speculative investment. And since Bitcoin has a low barrier of entry and is available for purchase anywhere, the price of Bitcoin will continue to go up (so long as the general population considers it an investment).

This sort of makes sense to me. In times like now, where some people have extra cash and confused/wary about entering the stock market, they turn to Bitcoin.
It is not uncommon for those skeptical of equities to put their cash elsewhere. Very common locations are real estate, commodities, and collectibles. I find bitcoin to be pretty complex compared more tangible assets such the aforementioned real estate, collectibles, or commodities. If I want, I can easily buy gold/silver coins or purchase a collectible car, painting, or some other trinket. With bitcoin one needs to have a baseline understanding and then figure out what type of wallet they want and how to get access to it. It may not be difficult for the younger crowed or those who deal with tech on a regular basis, but that is not the case for most.

Either way, I believe most people turn to bitcoin because of greed, fear of missing out, and/or a desire to gamble a little. This is especially true once one realizes that bitcoin is a speculative play based on the desire to sell one day to someone else at a higher price. They are basically following "the greater fool theory." With such a volatile play, one can get lucky and win some decent cash in the process.
Real estate generates an inherent return from rent plus decent chance of value appreciation. It's clearly the "third leg of the stool" alongside stocks + bonds.

Commodities don't generate an inherent return *except* arguments about "roll return"? Once large amounts of institutional investor money started chasing these, that went away. Commodity markets are not deep and liquid enough to accommodate large amounts of institutional money. Commodities may be inflation hedges, but you have storage costs.

Collectibles? Generally I would say they are pretty bad bets, because fashions change. Unless you are in a position to trade Old Masters - that Van Gogh your great aunt left you, etc. Wine. Fine art. Classic cars. I look at the indices and wonder how much reality there is underlying them. We have many threads here about people trying to unload their baseball card collections for example.

However collectibles provide the opportunity for insider knowledge & skill. Perhaps it was obvious 25 years ago that Dodge Chargers 1968-72, would become hot properties. All of us watching "Dukes of Hazard" as kids ;-). I might then also predict that when we start to sell to pay for our nursing homes, the values will fall (my brother says that has already happened to Ford Model Ts & As, from the older generation of collectors & their estates). The bid-ask spreads are also astronomic. I think Sotheby's and Christies start at 25% commission?

Gold has a particular place - although it has some uses, the main uses are decorative and as a form of financial reserve eg by Central Banks. Silver, because it is less valuable, and perhaps because of supply-demand, is also less of a store of value, it seems.

Negative real interest rates, and now negative nominal rates, have tended to push up the value of *all* of these assets. They've become another set of examples of the carry trade (borrow cheaply and invest in something riskier with a higher prospective return).
I knows a contractor who puts all his money into stuff. He is skeptical of the stock market, and I suspect does not have any retirement accounts. His garage and home is full of what appears to me useless crap that he believes he can sell for a higher price in the future. Maybe he knows what he is doing and has an eye for these things, I don’t know. Very nonchalantly, I mentioned the US market always goes up and some Bogleheads wiki that has a few videos that explains so much. It did not even phase the stock market skepticism.

It’s interesting that Model T and A have gone down in price. Are you saying the demand is down? Do you know how long this trend has been for? I wonder if this is a much bigger trend for most cars.

Back to the topic at hand. I just don’t see a need for bitcoin. It answers a question that most people have no need in answering. It stopped being “a currency” a long time ago, and it’s a horrible store of wealth considering it’s volatility. All we have left is it being a means to gamble.

It still is a very interesting phenomenon. There are very smart people out there who won’t touch it with a ten foot pole as well as very smart people who believe it will be the next internet. It is all just so fascinating.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Northern Flicker »

oldfort wrote: Tue Sep 15, 2020 7:39 am
Northern Flicker wrote: Mon Sep 14, 2020 10:45 pm
oldfort wrote: Sun Sep 13, 2020 11:32 pm
Northern Flicker wrote: Sun Sep 13, 2020 10:30 pm
oldfort wrote: Sun Sep 13, 2020 11:59 am

Because almost no one remembers 256-bit randomized passwords, and absolutely no one remembers 256-bit randomized passwords they aren't forced to type in on a daily basis. Banks choose 4-digit pins with 13-bits of entropy because it represents a reasonable balance between security and having too many customers need to reset their pins.
But the whole point of what bogivan posted was not to have to remember a 256-bit password, instead using a long mnemonic text of perhaps several regular sentences that hashes down to a randomized 256-bit password.

I didn't look at the code bogivan provided a link to for generating the 256-bit seed, but at first blush the algorithm appears to be inferior to a similar algorithm used by the Keepass password safe which compresses the text before computing the one-way hash and tells you how many non-redundant bits are in the key so that you can add text as needed to target a 256-bit fully randomized key. Perhaps the wallet seed generator does that as well.

If you have to remember the long text anyway, the existence of the hardware wallet is just an additional source of possible loss, but I guess you also could view it as a redundant copy so two things must be lost to lose the coins.
Except no one remembers long mnemonic text with 256-bits of entropy either, no matter what CS myths are propagated by a XKCD comic. Anything with 256-bits of entropy must be written down or stored somewhere and will have a very high probability of being forgotten. Any IT system which requires someone to remember 256-bits of entropy without writing it down is completely detached from reality.
If it is your method of restoring from a hardware failure, it is critical that you maintain it reliably somewhere, somehow.
Memorization is not a reliable method for storage.
You are focusing on the method of tracking it when the point of the post you were responding to was that if you have to maintain the seed, and are not trading bitcoins, keeping the hardware wallet around is not necessary.
Risk is not a guarantor of return.
am
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by am »

https://www.coindesk.com/market-wrap-bi ... er-options

Traded companies with valuations in the billions like square buying bitcoin. Beginning of a trend and rise in prices?
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by NoRegret »

viewtopic.php?f=10&t=324058&p=5478230#p5478230

While I wrote a post upthread against bitcoin, I can’t deny that technically it’s looking interesting again. My own decision process is 60% technical, 30% macro and 10% fundamental. I reserve the right to change my mind, especially for a trade.

What I said of Thether’s growth remain true as its market cap is now $15.7B. Other stable coins are seeing growth as well. Crypto borrowing/lending are catching on. Interest rates are higher for stable coins so that may be an explanation. I’m still trying to figure out whether that whole ecosystem is a Ponzi scheme — so far I lean towards it’s not — not a ringing endorsement nonetheless. It does make the system more fragile as it makes forced selling more likely. But probably not a systemic risk until much bigger. In the mean time there is money to be made.

There are other reports suggesting tether/stable coin being used to facilitate real cross-border commerce (as a way to bypass SWIFT). If true it certainly could have the scale of a “killer app”. Of note is that it means USD is winning the battle for “the unit of account”, on bitcoin’s home turf no less.
Market timer targeting long term cycles -- aiming for several key decisions per asset class per decade
EnjoyIt
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

NoRegret wrote: Sun Oct 11, 2020 1:50 pm viewtopic.php?f=10&t=324058&p=5478230#p5478230

While I wrote a post upthread against bitcoin, I can’t deny that technically it’s looking interesting again. My own decision process is 60% technical, 30% macro and 10% fundamental. I reserve the right to change my mind, especially for a trade.

What I said of Thether’s growth remain true as its market cap is now $15.7B. Other stable coins are seeing growth as well. Crypto borrowing/lending are catching on. Interest rates are higher for stable coins so that may be an explanation. I’m still trying to figure out whether that whole ecosystem is a Ponzi scheme — so far I lean towards it’s not — not a ringing endorsement nonetheless. It does make the system more fragile as it makes forced selling more likely. But probably not a systemic risk until much bigger. In the mean time there is money to be made.

There are other reports suggesting tether/stable coin being used to facilitate real cross-border commerce (as a way to bypass SWIFT). If true it certainly could have the scale of a “killer app”. Of note is that it means USD is winning the battle for “the unit of account”, on bitcoin’s home turf no less.
There is definitely money to be made here. A sucker is born every day. I just don’t want to be the last sucker.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
tmcc
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by tmcc »

I have 1 bitcoin just in case it goes to $1M
EnjoyIt
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

tmcc wrote: Sun Oct 11, 2020 4:44 pm I have 1 bitcoin just in case it goes to $1M
Yeah, I have a fraction of a coin myself. Mostly for the fun of it and see what all the hubbub is about. Did some transactions with it as well.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
Fortune Seeker
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Fortune Seeker »

Ok, so there was an interesting statement released by UK Financial Conduct Authority concerning banning sale of crypto derivative products to retail investors. This is not about restricting sale of cryptocurrencies directly, but it has a few interesting mentions nonetheless.

Paper: https://www.fca.org.uk/publication/policy/ps20-10.pdf

On cryptocurrency valuations:

We recognise that some companies accept cryptoassets as a means of payment. These companies price their goods and services in fiat currency and convert the price into bitcoin at the time of sale. In effect, fiat currency remains the underlying medium of exchange. The Bank for International Settlements (BIS) states that cryptoassets cannot reliably provide the standard functions of money because they are currently too volatile to become accepted as a standard of value. Lower volatility is necessary for them to be widely accepted for purchasing goods and services. We do not think that cryptoassets being exchanged for fiat currency equates to intrinsic value. We remain of the view that the price of cryptoassets is determined by sentiment and speculative behaviour. As a result, future valuations are highly subjective.
....
This is because cryptoassets do not commonly have consistent valuations based on assumptions on dividends/coupons, or use of materials in production or consumption.


On them being store of value:

To act as a genuine and reliable store of value, we think those cryptoassets would need to demonstrate that they are not prone to the same level of volatility that existing exchange tokens, such as bitcoin and ethereum, currently exhibit. Cryptoassets do not currently benefit from the same social, economic, cultural and physical-usage related factors that have established other assets as a store of value, such as gold.
...
And so on, and so forth.

I recommend anyone who is thinking about _investing_ into Bitcoin to read this. This is written by professionals and by agency which has no interest in promoting or dismissing cryptocurrencies, so as neutral party as it gets.
000
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by 000 »

Fortune Seeker wrote: Sun Oct 11, 2020 8:12 pm I recommend anyone who is thinking about _investing_ into Bitcoin to read this. This is written by professionals and by agency which has no interest in promoting or dismissing cryptocurrencies, so as neutral party as it gets.
The very first sentence on Wikipedia (bold emphasis mine):

The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry.
Fortune Seeker
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Fortune Seeker »

000 wrote: Sun Oct 11, 2020 8:33 pm
Fortune Seeker wrote: Sun Oct 11, 2020 8:12 pm I recommend anyone who is thinking about _investing_ into Bitcoin to read this. This is written by professionals and by agency which has no interest in promoting or dismissing cryptocurrencies, so as neutral party as it gets.
The very first sentence on Wikipedia (bold emphasis mine):

The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry.
It is in sweet spot. It's not directly subordinate to reserve bank, has no publication bias, is not something written by journalists to sell headlines, is not company/invididual who is long cryptocurrency, and has professional reputation.
hunoraut
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by hunoraut »

EnjoyIt wrote: Mon Sep 14, 2020 1:03 pm It is not uncommon for those skeptical of equities to put their cash elsewhere. Very common locations are real estate, commodities, and collectibles. I find bitcoin to be pretty complex compared more tangible assets such the aforementioned real estate, collectibles, or commodities.
I'm not sure people who own significant real estate, collectibles, or other commodities, would find that they're easy/cheap/not-complex to maintain.
EnjoyIt
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by EnjoyIt »

hunoraut wrote: Mon Oct 12, 2020 6:39 am
EnjoyIt wrote: Mon Sep 14, 2020 1:03 pm It is not uncommon for those skeptical of equities to put their cash elsewhere. Very common locations are real estate, commodities, and collectibles. I find bitcoin to be pretty complex compared more tangible assets such the aforementioned real estate, collectibles, or commodities.
I'm not sure people who own significant real estate, collectibles, or other commodities, would find that they're easy/cheap/not-complex to maintain.
Gold/silver buy some and put it in your drawer or safe.
Collectibles buy it and store it in your closet.
Real estate buy it and live in it or rent it.

Bitcoin is a confusing product except for the techies who understand the mechanics. I couldn’t even begin to get one of my older family members to understand what bitcoin is and does without using marketing catch phrases like digital gold. It is very complicated with weird terms like hash rate, mining, and halving.

You might say real estate is complex, and it has it’s nuance of complexity, but the gist of real estate is very simple. Buy and rent, buy and flip, buy and live in. Very straight forward.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
Valuethinker
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Re: Winklevoss: The Case for $500,000 Bitcoin

Post by Valuethinker »

000 wrote: Sun Oct 11, 2020 8:33 pm
Fortune Seeker wrote: Sun Oct 11, 2020 8:12 pm I recommend anyone who is thinking about _investing_ into Bitcoin to read this. This is written by professionals and by agency which has no interest in promoting or dismissing cryptocurrencies, so as neutral party as it gets.
The very first sentence on Wikipedia (bold emphasis mine):

The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry.
It is our equivalent of the SEC. Modelled on same in fact. It was created after the 2008 Crash, in response to a criticism of failure of Prudential Regulation (collapse of RBS, briefly something like the worlds 4th largest bank, etc).

The Financial Standards Authority was split into Conduct of Business -- the FCA and Prudential Regulation - the Prudential Regulatory Authority (PRA) which is now part of the Bank of England (ie our Fed).

The FCA has been heavily criticized in recent years for not acting fast enough to protect consumers.

Bank Underground, the blog of the Bank of England, also has some gems on these sorts of things -- crypto.

I would also recommend FT Alphaville for its provocative and insightful commentary.
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