Cryptocurrency - Bitcoin Continues to Soar!

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
diabelli
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Joined: Sat Mar 09, 2019 2:26 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by diabelli »

Why exactly do advocates of decentralized finance and BTC think that the government is going to allow for this stuff to supplant fiat currency? And this during a time of, gee I dunno, the government being rather unprecedentedly direct in telling us what we should and should not do? Isn't it possible if not likely that they crack down in some way, leading to an overnight stampede out of these currencies?

Though on a bright note for crypto, I'm reading in places that many are using their stimulus checks to buy it. Great idea!
ohboy!
Posts: 911
Joined: Thu Jan 04, 2018 1:21 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ohboy! »

diabelli wrote: Tue Mar 16, 2021 8:58 am Why exactly do advocates of decentralized finance and BTC think that the government is going to allow for this stuff to supplant fiat currency? And this during a time of, gee I dunno, the government being rather unprecedentedly direct in telling us what we should and should not do? Isn't it possible if not likely that they crack down in some way, leading to an overnight stampede out of these currencies?

Though on a bright note for crypto, I'm reading in places that many are using their stimulus checks to buy it. Great idea!
Worldview. The US does not run the world, contrary to some patriots beliefs.

Several governments have imposed tight restrictions on crypto in the past. China? At this point it would likely only backfire and cause wider adoption.
ohboy!
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Joined: Thu Jan 04, 2018 1:21 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ohboy! »

liksah wrote: Tue Mar 16, 2021 8:50 am
ohboy! wrote: Tue Mar 16, 2021 12:26 am
liksah wrote: Mon Mar 15, 2021 6:44 pm
ohboy! wrote: Mon Mar 15, 2021 9:46 am
liksah wrote: Mon Mar 15, 2021 6:50 am

50% crypto is quite heavily weighted so I presume you believe strongly in the fundamentals of what crypto brings. What is your crypto allocation like, though? (as in %BTC/%ETH/%other stuff?)

I wanted to market weigh ETH but when I research further into it, I find that Ethereum is an incredibly ambitious project and they have done some amazing work so far. But with the move to 2.0 there are a LOT of challenges that lie ahead. I personally think that a lot of ETH price action right now is just money flowing into the system because of interest in Bitcoin. This shows from the fact that the ETH/BTC currency pair has been quite stable through this entire rise.

Anyway all this is just trying to make sense of a lot of crazy stuff going on, and in the end I wanted to market weigh ETH by selling some of my BTC to ETH but I could only go up to 5%. Curious about your thoughts and allocation.
Cryptofees.info

All of the protocols in pink are on Ethereum. Ethereum is the prominent smart contract network. Decentralized finance is the biggest current use case. The network is so busy that a smart contract transaction costs $50-$100. And the applications are so useful people pay that price all day everyday. Within a month Optimism launches and will increase transactions exponentially while bringing costs down 100x. No longer will it be a minimum $10k to make a transaction worth it. Ethereum has many more reasons than Bitcoin to see value in it.

I do see value in ethereum and all of DeFi. But how do I value ether? Why is ether valuable and why should it cost X?

I’m finding it really hard to answer this question. I understand ether is used for fees for compute power on the network, but why would it make sense to market weigh ether in a portfolio? Or even just expect its price to go up?

I can’t seem to wrap my head around this. There’s already 10x of ether as opposed to btc and that makes sense because it needs to be used for smart contracts etc.

But what’s the rationale in buying and holding ether? That part is confusing to me.

I get the store of value argument for btc and thus the rising price. But for ether I’m coming up blank.

Do you have any insight into this?
How does it go? you can lead a horse to water but you can’t make them drink?
Ah I see, so now we have to resort to attacks about my own intelligence rather than make a case for it. Fine then, I asked. Mumble mumble *transaction fees* doesn't explain to me why an inflationary token should keep going up in value but alright.

If DeFi has to grow big then it's going to be on the back of low transaction fees and doing things better, which means the token shouldn't cost a lot. Thus wouldn't it be better for the network if Ether (and thus compute power on the decentralized network..) is cheaper and more smart contracts can be processed for better prices?
It was not an attack on your intelligence at all. You are assuming things about Ethereum that you don’t perhaps understand past a headline. You can find the information everywhere if you wanted to.

Transaction fees might be compared to revenues, but to me they more plainly show demand for the network. Using ETH to pay transaction fees is not in direct ratio to price of ETH. Meaning the price of ETH can rise and transaction cost can go down, or vice versa. And ETH value as an asset is not limited to transaction fees.

EIP 1559 goes in this summer, making Ethereum more describable as deflationary. With proof of stake holders will always be able to make a return on their staked Ethereum. This could be compared to as a dividend.

Several solutions are launching to scale Ethereum. Optimism, within a month, will scale Ethereum 100x. Smart contract fees will go from something like $50-$100 to 50c-$1.

That’s plenty of topics to explore should you be inclined.
liksah
Posts: 24
Joined: Wed Jul 20, 2016 12:51 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by liksah »

Flannelbeard wrote: Tue Mar 16, 2021 9:40 am
liksah wrote: Tue Mar 16, 2021 8:50 am Ah I see, so now we have to resort to attacks about my own intelligence rather than make a case for it.
That's a key play from the cryptocurrency marketing script.

First play: dangling past returns. Easy, low effort, and hooks a lot of marks.

Second play: "buzzword soup". Blockchain! DeFi! Consensus! Stablecoins! TVL! Staking! The intent here is to play to the technology aspect. Make it seem deep, intelligent, and important while also making the mark feel as if they're part of an in-group who is smart enough to understand this stuff. Other people are too dumb to understand crypto, so they won't get on board until it's too late and they have to pay you $1M per Bitcoin! Works well on narcissistic marks.

Third play: this is where the attacks on intelligence come in for any mark that didn't fall for the buzzword soup. Effective because it works on self-doubters, which is the exact opposite of the play above to capture the narcissists. You just don't get it. You're not smart enough to understand the technology even when I tried to spell it out for you. That's okay if you don't, it took me a while to learn this much by researching the technology. You don't have to be able to explain what a blockchain is to know that this is going to be big and make us both rich.

While the third play is rarely successful immediately, it serves two purposes. The first of which is to plant an insidious seed of doubt, so over the following weeks/months the mark may think about crypto more (while hopefully watching the price go up and feeling like they're missing out) and eventually become a convert. The second purpose is to belittle the doubters and put them on public display to reinforce their pitch to other marks. Hey look at that dummy, they missed out, but you don't have to! This will continue to be an effective part of the marketing script for as long as the price stays flat or goes higher.
Yes, I find this deeply disappointing. I've been into crypto since late 2013/early 2014 so been through all these hype cycles, watched Bitcoin become corrupted by greed, watched the rise of Ethereum as a wonderful smart contracts and DeFi platform.

I was really impressed recently with how far the self governing systems have come on the Ethereum platform and I wanted to try to take out a small loan on MakerDAO. But the cost was prohibitive - for a small loan. Anything $10k or over is fine.

There's a lot out there that becomes possible because of these innovations and they are for sure massive innovations and a huge leap forward for humanity. Token price is not what makes these innovations so valuable. It's the possibilities they unlock.

Yet, there is a lot of underhand stuff going on in this space - especially when it comes to the Tether stablecoin and no one wants to discuss it. A large portion of transaction volume going into BTC and ETH everyday is coming from Tether. That part of it is definitely a house of cards and I hope for everyone's sake (especially retail investors) that it doesn't come crashing down anytime soon.
It was not an attack on your intelligence at all. You are assuming things about Ethereum that you don’t perhaps understand past a headline. You can find the information everywhere if you wanted to.

Transaction fees might be compared to revenues, but to me they more plainly show demand for the network. Using ETH to pay transaction fees is not in direct ratio to price of ETH. Meaning the price of ETH can rise and transaction cost can go down, or vice versa. And ETH value as an asset is not limited to transaction fees.

EIP 1559 goes in this summer, making Ethereum more describable as deflationary. With proof of stake holders will always be able to make a return on their staked Ethereum. This could be compared to as a dividend.

Several solutions are launching to scale Ethereum. Optimism, within a month, will scale Ethereum 100x. Smart contract fees will go from something like $50-$100 to 50c-$1.

That’s plenty of topics to explore should you be inclined.
Thanks for sharing that. I think lower transaction fees would definitely encourage greater use. I have not really found any succinct reason or explanation as to why the ether token should be so valuable, that's why I asked over here.
SlowMovingInvestor
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Joined: Sun Sep 11, 2016 11:27 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

liksah wrote: Tue Mar 16, 2021 9:57 am
Thanks for sharing that. I think lower transaction fees would definitely encourage greater use. I have not really found any succinct reason or explanation as to why the ether token should be so valuable, that's why I asked over here.
While I'm not really interested in getting involved in the perennial debate on crypto as an investment, I will say that I don't think Ether's value can be justified by a cash flow analysis of staking fees, or by gas charges (current fees at a lower transaction rate, or lower fees at a higher transaction rate). It is ultimately a very speculative, volatile token -- and if Ether prices were falling, I doubt many people would be willing to stake (tie up) tokens for periods of time.

[Putting $$ in speculative assets is fine, as long as one knows what one is getting into. ]
ohboy!
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ohboy! »

SlowMovingInvestor wrote: Tue Mar 16, 2021 10:19 am
liksah wrote: Tue Mar 16, 2021 9:57 am
Thanks for sharing that. I think lower transaction fees would definitely encourage greater use. I have not really found any succinct reason or explanation as to why the ether token should be so valuable, that's why I asked over here.
While I'm not really interested in getting involved in the perennial debate on crypto as an investment, I will say that I don't think Ether's value can be justified by a cash flow analysis of staking fees, or by gas charges (current fees at a lower transaction rate, or lower fees at a higher transaction rate). It is ultimately a very speculative, volatile token -- and if Ether prices were falling, I doubt many people would be willing to stake (tie up) tokens for periods of time.

[Putting $$ in speculative assets is fine, as long as one knows what one is getting into. ]
Look how much ETH is staked already. And that’s with an indefinite hold. I don’t know why Coinbase is taking so long but surely their staking program will increase staking substantially.

Here is quote from Ryan @ Bankless, I really recommend their podcasts. There is only so much I can explain. You have to get out there and use Ethereum. Check out the governance forums. Discords. Etc

ETH as triple point asset
1: A monetary asset (when used to store value)
2: A commodity (when used to pay for blocks)
3: A capital asset (when staked)

You will find narrative driving a lot of crypto. This is apparent with NFT art which has no users, no revenues, no data.

Even with Bitcoin you will find more narrative driven price than function or data.

With Ethereum you will find users, transactions, usage. Like any crypto. The difference is, and Im really surprised Bogleheads don’t see it for the most part yet; revenues of apps/protocols, realize its something quite different than Bitcoin, and in my opinion way more attractive.
EndersTame
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by EndersTame »

What is ETH's solution to the energy issue facing BTC, which is only going to get more attention with time?
SlowMovingInvestor
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

ohboy! wrote: Tue Mar 16, 2021 1:06 pm
Look how much ETH is staked already. And that’s with an indefinite hold. I don’t know why Coinbase is taking so long but surely their staking program will increase staking substantially.
Well, more Ethereum staked means that staking rates will go down. And if Eth prices take a dip lasting a few months, I suspect we'll see fewer people willing to stake. Ultimately you're locking up a risky fluctuating asset, and taking slashing risks for a significant period of time (I know that Coinbase and/or others intend to offer some derivative on staked ether with them).
ohboy! wrote: Tue Mar 16, 2021 1:06 pm There is only so much I can explain. You have to get out there and use Ethereum.
I know Ethereum quite well, I was considering running a staking server as an exercise (but probably won't).
ohboy!
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ohboy! »

SlowMovingInvestor wrote: Tue Mar 16, 2021 1:52 pm
ohboy! wrote: Tue Mar 16, 2021 1:06 pm
Look how much ETH is staked already. And that’s with an indefinite hold. I don’t know why Coinbase is taking so long but surely their staking program will increase staking substantially.
Well, more Ethereum staked means that staking rates will go down. And if Eth prices take a dip lasting a few months, I suspect we'll see fewer people willing to stake. Ultimately you're locking up a risky fluctuating asset, and taking slashing risks for a significant period of time (I know that Coinbase and/or others intend to offer some derivative on staked ether with them).
ohboy! wrote: Tue Mar 16, 2021 1:06 pm There is only so much I can explain. You have to get out there and use Ethereum.
I know Ethereum quite well, I was considering running a staking server as an exercise (but probably won't).
A "validator". Yeah it seems more a hobby or show of solidarity for most who buy a $500 machine to operate a validator. I have seen reports people have already earned their first ETH, so $1800ish return so far. I'm getting higher return on ETH through a Curve pool, plus liquidity is valuable. I will probably do some ETH in Coinbase staking once they release it, but they have one of the highest commissions in the game. Also looking forward to Rocketpool. More than staking though, Ethereum really needs Optimism and gas solving scaling to come online. Gas is insane. I have some money I wanted to move in Defi today and gas estimate was beyond ridiculous to withdraw. While I think much of the developers in the space are very dedicated to Ethereum, the NFT space is exploding and Ethereum stands to lose a huge market of new interest there. At least in the short term.
liksah
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by liksah »

ohboy! wrote: Tue Mar 16, 2021 1:06 pm
SlowMovingInvestor wrote: Tue Mar 16, 2021 10:19 am
liksah wrote: Tue Mar 16, 2021 9:57 am
Thanks for sharing that. I think lower transaction fees would definitely encourage greater use. I have not really found any succinct reason or explanation as to why the ether token should be so valuable, that's why I asked over here.
While I'm not really interested in getting involved in the perennial debate on crypto as an investment, I will say that I don't think Ether's value can be justified by a cash flow analysis of staking fees, or by gas charges (current fees at a lower transaction rate, or lower fees at a higher transaction rate). It is ultimately a very speculative, volatile token -- and if Ether prices were falling, I doubt many people would be willing to stake (tie up) tokens for periods of time.

[Putting $$ in speculative assets is fine, as long as one knows what one is getting into. ]
Look how much ETH is staked already. And that’s with an indefinite hold. I don’t know why Coinbase is taking so long but surely their staking program will increase staking substantially.

Here is quote from Ryan @ Bankless, I really recommend their podcasts. There is only so much I can explain. You have to get out there and use Ethereum. Check out the governance forums. Discords. Etc

ETH as triple point asset
1: A monetary asset (when used to store value)
2: A commodity (when used to pay for blocks)
3: A capital asset (when staked)

You will find narrative driving a lot of crypto. This is apparent with NFT art which has no users, no revenues, no data.

Even with Bitcoin you will find more narrative driven price than function or data.

With Ethereum you will find users, transactions, usage. Like any crypto. The difference is, and Im really surprised Bogleheads don’t see it for the most part yet; revenues of apps/protocols, realize its something quite different than Bitcoin, and in my opinion way more attractive.
Oh, I see it alright but I do think that there are opposing forces that need to come to equilibrium. The cost of transactions needs to be high enough for people to run validators/stake/etc and on the other hand it needs to be low enough that people/end-users find the network useful. There is a price anchor when it comes to a lot of these costs and that anchor would be traditional finance. So we know what prices are needed for competitiveness. This, in my opinion is one of the greatest challenges right now.

There's a huge balancing act that needs to take place between different interests and stakeholders.

If this and other challenges are solved, sure I can see ETH being quite valuable. As in, if the prices of transactions drop 10x, and all things are in equilibrium, I can see the volume going up 100x or more. Then we can see a situation where ETH is at 10x what it is right now (i.e. current/10x * 100x).

These are giant challenges that need to be solved though but overall I'm excited for the future of DeFi and I can see that either ETH or another network will definitely solve these challenges at some point.
mws13
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by mws13 »

liksah wrote: Mon Mar 15, 2021 6:50 am
50% crypto is quite heavily weighted so I presume you believe strongly in the fundamentals of what crypto brings. What is your crypto allocation like, though? (as in %BTC/%ETH/%other stuff?)

I wanted to market weigh ETH but when I research further into it, I find that Ethereum is an incredibly ambitious project and they have done some amazing work so far. But with the move to 2.0 there are a LOT of challenges that lie ahead. I personally think that a lot of ETH price action right now is just money flowing into the system because of interest in Bitcoin. This shows from the fact that the ETH/BTC currency pair has been quite stable through this entire rise.

Anyway all this is just trying to make sense of a lot of crazy stuff going on, and in the end I wanted to market weigh ETH by selling some of my BTC to ETH but I could only go up to 5%. Curious about your thoughts and allocation.
I need to dig in deeper to ETH to answer your question. I am in early to ETH, so my mistakes are not a real problem, for me. This forum is for traditional investors, so I am trying to calculate that into my answer.

I am using an ERC20 Token in a SMALL experiment/community, so I am trying to truly re-engage.

Your questions are very valid, and I don't have a good answer, yet.
decapod10
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

EndersTame wrote: Tue Mar 16, 2021 1:37 pm What is ETH's solution to the energy issue facing BTC, which is only going to get more attention with time?
ETH 2.0 will switch from Proof of Work to Proof of Stake, which should dramatically decrease energy requirements because you are not wasting energy "mining". This is some risk that the transition will fail, or the transition will take too long and some other blockchain will start to take over.
decapod10
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

liksah wrote: Tue Mar 16, 2021 9:57 am
Thanks for sharing that. I think lower transaction fees would definitely encourage greater use. I have not really found any succinct reason or explanation as to why the ether token should be so valuable, that's why I asked over here.
People who value Ether are banking on increased use of the Ethereum network. In theory, more transactions per day on Ethereum = more valuable Ether. I posted this analogy somewhere, it's not a perfect analogy but hopefully it's somewhat helpful, I'll copy/paste it here.

Imagine a world where there is only 1 road in the whole world. It’s in Houston between the post office and the grocery store. There are 10,000 cars, and you can pay the owners of the car to use it for a trip. These cars only work on roads, and road can only be used by these cars (no other vehicles). You cannot make any new cars. You can imagine in this scenario, those cars probably aren’t worth very much.

Now, other businesses notice how convenient it would be to have a road going to their shops. So, they build more roads. 20 shops decide to build roads that go to their business. The cars probably start to gain some value, but they are still not super valuable yet.

Now, imagine a world like we have today where there are roads literally everywhere, but there are only these 10,000 cars and no way to produce more. How much is a car worth now? A lot. Millions probably.

The cars in this example are analogous to Ether (the cryptocurrency for the Ethereum network). The more that the Ethereum network is used, the more valuable Ether becomes because you must use Ether to use the Ethereum network. Note that this analogy does NOT work for Bitcoin, at least in it's current form, since Bitcoin does not have this sort of functionality.

This sounds great, but what are the risks?

1. Renting a car gets too expensive - at some point, renting a car will be cost prohibitive for most people, which will stunt the growth of the road network. This is actually a problem with Ethereum, though the analogy breaks down when you are looking at the cause/solution for this problem. But they are attempting to fix this with Ethereum 2.0.

2. Finding a car takes too long - If you are in San Francisco and there are no cars within 1000 miles of you, it’s not practical for most trips. You don’t want to wait 10 hours for a car so you can go to the post office. Also a problem with Ethereum (problem with scaling), however again trying to be fixed in Ethereum 2.

3. Someone comes up with a competitor - Elon Musk creates a system of Hyperloops, so no one wants to use your cars anymore. However, it is worth noting that cars and hyperloop can coexist, and sometimes be synergistic if they can interface well. This would be similar to Ethereum vs Polkadot/Cardano/VeChain/ Other smart contract blockchain. They could compete with each other, but they could coexist as well.

4. Someone figures out how to use a different vehicle on your roads - Someone figures out that they can make motorcycles that work on your roads. Now your cars aren’t worth as much. I have seen some people speculate that this could be a problem for investing in Ether, but at this point doesn’t seem to be a huge concern.

5. Someone makes 100 million cars - If someone makes a bunch of cars, of course your cars won’t be worth as much. In its current state, there is no maximum amount of Ether that can exist, though there is a cap on amount that can be made per year. People who are really pro-Bitcoin see this as a knock against Ether (Bitcoin has a hard cap of 21 million), though others actually think that Ether will be much more deflationary than you might expect, especially when they switch to ETH2 for various technical reasons.

6. The public decide that they don't really want transportation at all and they prefer to walk - It could be that people/companies don't find the whole concept of blockchain useful at all, then of course Ether and all other similar crypto would not be valuable.

The other issue that is difficult when investing in Ether or other crypto is how do you know what an Ether should be worth? I suspect at some point there will be metrics and equations similar to what we have for stocks. It will likely be mainly focused on number of transactions per day, number of coins in circulation, how inflationary is the currency. Those are probably the biggest things that would determine a coins intrinsic value. Then of course "future expectations" which is the biggest bugaboo probably. Although in Bogleheads, the hardline stance is that those metrics don't really matter, so maybe there is a reasonable stance to take that valuations in crypto should not matter either, other than you think that crypto will grow over time. If you don't believe that, of course it makes no sense to buy in.
fingoals
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by fingoals »

Jags4186 wrote: Tue Mar 16, 2021 7:59 am
jabberwockOG wrote: Tue Mar 16, 2021 7:40 am
Kitkat76 wrote: Tue Mar 16, 2021 1:10 am
jabberwockOG wrote: Mon Mar 15, 2021 10:47 pm Bitcoin is over. Get out before it's too late. Tulip bulbs are the next big thing. Get in before it's too late.
Totally, all the folks saying Bitcoin has been a bubble for the past 1,3,5,10 years have finally been vindicated! Just check the returns yourself.

1yr- 919%
3yr- 1,686%
5yr- 13,616%
10yr- 99,999,99%

YTD bonus: 90%

Pump and Dump much? There must be more productive boards out there than Bogleheads to preach about FOMO on crypto and the best ever deluxe joys of becoming a millionaire on digital investments. Better get some NFTs while you can.
The problem I have with Bitcoin is that something shinier can came along and supplant it. Without artificial demand, like say taxes for government issued currency, it will always run the risk of becoming boring and stale. Precious metals have a tangibility to them that Bitcoin can never have. Of course, precious metals haven't returned 100,000,000% in 10 years.
I think that you are underestimating the power of Bitcoin's both brand and scale of its network (both results of the combination of the first mover's advantage, sound technical & economic design and institutional adoption). Your concern seems to be akin to worrying about some new companies come along and supplant Coca Cola in the beverages market and Facebook in the social networks market. Possible? Theoretically, yes. Practically, very unlikely.
SlowMovingInvestor
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

fingoals wrote: Tue Mar 16, 2021 8:02 pm
I think that you are underestimating the power of Bitcoin's both brand and scale of its network (both results of the combination of the first mover's advantage, sound technical & economic design and institutional adoption). Your concern seems to be akin to worrying about some new companies come along and supplant Coca Cola in the beverages market and Facebook in the social networks market. Possible? Theoretically, yes. Practically, very unlikely.
I have no strong opinions on BTC vs other crypto (see my Ether post earlier), but ...

Coca Cola and Facebook are both aggressive in advertising, adding features (Diet Coke), pursuing new opportunities/acquisitions (other beverages, WhatsApp/Oculus) and advertising their brands.

For BTC, some of that is not possible or has to be carried out by a diverse group of supporters, some of whom have their own agendas. Indeed, the volatility of BTC (which benefits traders) conflicts with those who want it to be used in regular commerce or in international commerce as a $ replacement, and so on.

Also, the possibility of massive wealth does incentivize others to build out their own blockchains, or run off the Ether blockchain. Once a 51% attack becomes implausible because of an alt network size, altcoins can become challengers very quickly. It's not like building out an alternate physical distribution network for a Coke challenger.
fingoals
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by fingoals »

SlowMovingInvestor wrote: Tue Mar 16, 2021 8:29 pm
fingoals wrote: Tue Mar 16, 2021 8:02 pm
I think that you are underestimating the power of Bitcoin's both brand and scale of its network (both results of the combination of the first mover's advantage, sound technical & economic design and institutional adoption). Your concern seems to be akin to worrying about some new companies come along and supplant Coca Cola in the beverages market and Facebook in the social networks market. Possible? Theoretically, yes. Practically, very unlikely.
I have no strong opinions on BTC vs other crypto (see my Ether post earlier), but ...

Coca Cola and Facebook are both aggressive in advertising, adding features (Diet Coke), pursuing new opportunities/acquisitions (other beverages, WhatsApp/Oculus) and advertising their brands.

For BTC, some of that is not possible or has to be carried out by a diverse group of supporters, some of whom have their own agendas. Indeed, the volatility of BTC (which benefits traders) conflicts with those who want it to be used in regular commerce or in international commerce as a $ replacement, and so on.

Also, the possibility of massive wealth does incentivize others to build out their own blockchains, or run off the Ether blockchain. Once a 51% attack becomes implausible because of an alt network size, altcoins can become challengers very quickly. It's not like building out an alternate physical distribution network for a Coke challenger.
Fair points, however ...

By mentioning Coca Cola and Facebook, I was trying to illustrate the core common advantages between those companies and Bitcoin: the power of brand and the scale of relevant networks. The fact that Coca Cola and Facebook are adding features and pursuing new opportunities / acquisitions (vs. Bitcoin not doing that) is IMO not relevant in this context. Because while those actions are (or can be) beneficial for those - or any other, for that matter - companies, it is not only not necessary, but would be detrimental for Bitcoin as a de facto standard for the store of value asset. Bitcoin has to be simple and boring.

As for Coca Cola and Facebook being "aggressive in advertising", well, I would say that Bitcoin and the larger community does an unprecedented job in this regard, hence Bitcoin's unmatched popularity and emerging institutional adoption, which positively reinforces the popularity-adoption feedback loop. Well thought-out economic and technical design of Bitcoin along with implementation's decade-long stability and security is what gives Bitcoin its top place among current and, most likely, future cryptoassets in the store of value category.

As for Ethereum and Ethereum-based blockchains (e.g., Cardano, Polkadot) and DeFi-focused altcoins, they don't seem to represent a threat for Bitcoin simply because they play in different categories. At the present time, I'm not seeing any potential contender for Bitcoin's store of value leadership.
Bama12
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Bama12 »

ADA!!
Jags4186
Posts: 8198
Joined: Wed Jun 18, 2014 7:12 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jags4186 »

fingoals wrote: Tue Mar 16, 2021 8:02 pm
Jags4186 wrote: Tue Mar 16, 2021 7:59 am
jabberwockOG wrote: Tue Mar 16, 2021 7:40 am
Kitkat76 wrote: Tue Mar 16, 2021 1:10 am
jabberwockOG wrote: Mon Mar 15, 2021 10:47 pm Bitcoin is over. Get out before it's too late. Tulip bulbs are the next big thing. Get in before it's too late.
Totally, all the folks saying Bitcoin has been a bubble for the past 1,3,5,10 years have finally been vindicated! Just check the returns yourself.

1yr- 919%
3yr- 1,686%
5yr- 13,616%
10yr- 99,999,99%

YTD bonus: 90%

Pump and Dump much? There must be more productive boards out there than Bogleheads to preach about FOMO on crypto and the best ever deluxe joys of becoming a millionaire on digital investments. Better get some NFTs while you can.
The problem I have with Bitcoin is that something shinier can came along and supplant it. Without artificial demand, like say taxes for government issued currency, it will always run the risk of becoming boring and stale. Precious metals have a tangibility to them that Bitcoin can never have. Of course, precious metals haven't returned 100,000,000% in 10 years.
I think that you are underestimating the power of Bitcoin's both brand and scale of its network (both results of the combination of the first mover's advantage, sound technical & economic design and institutional adoption). Your concern seems to be akin to worrying about some new companies come along and supplant Coca Cola in the beverages market and Facebook in the social networks market. Possible? Theoretically, yes. Practically, very unlikely.
MySpace used to dominate the social media market. It was first to market. It was supplanted by Facebook. With an aggressive government, Facebook could be broken up or regulated into oblivion.

Coca Cola has survived and thrived, sure, but other dominant companies haven’t. Kodak is a perfect example of a company with the cutting edge technology that was made obsolete and supplanted by new technology. And Kodak was trying not to become irrelevant.
YeahBuddy
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by YeahBuddy »

It's very difficult to avoid all the crypto noise lately. Literally every investment/finance group I'm apart of is overrun with these posts. But since I still don't understand it, I will live by the words of Warren Buffet and continue to be fearful when others are greedy.
Light weight baby!
Valuethinker
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Valuethinker »

RobLyons wrote: Wed Mar 17, 2021 6:44 am It's very difficult to avoid all the crypto noise lately. Literally every investment/finance group I'm apart of is overrun with these posts. But since I still don't understand it, I will live by the words of Warren Buffet and continue to be fearful when others are greedy.
Bubble Logic. FOMO. "Fill your boots, boys, it's going north large" (spoken in a London Cockney/ Essex accent by a guy with bright red braces and a striped tie).

It's gone up a lot therefore it must be worth investing in. The New New Thing.

We've been here before. The early entrants will flip their holdings out and make a fortune. The average speculator? Not so much.

This one will come to Earth, eventually. Australian diamonds. Dot coms. US oil services stocks in the early 1980s. Canadian gold miners. Railroads. Electronics companies in the early 60s. Biotech stocks in the 1990s.

Tesla now combines the Vehicles of the Future & Self Driving Cars, Environmental, Renewable Energy, space travel and Bitcoin all in one stock price.
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ResearchMed
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ResearchMed »

Apologies if this was already posted:

"Morgan Stanley becomes the first big U.S. bank to offer its wealthy clients access to bitcoin funds"

https://www.cnbc.com/2021/03/17/bitcoin ... funds.html

"The bank is only allowing its wealthier clients access to the volatile asset: The bank considers it suitable for people with “an aggressive risk tolerance” who have at least $2 million in assets held by the firm. Investment firms need at least $5 million at the bank to qualify for the new stakes."

$2 million sounds like a lot, but that could be the entire retirement pot for some "middle class" people.
I would have expected a much higher requirement.
I hope they are doing a lot more vetting...

ETA: I hadn't read far enough. Turns out that "And even for those accredited U.S. investors with brokerage accounts and enough assets to qualify, Morgan Stanley is limiting bitcoin investments to as much as 2.5% of their total net worth, said the people."
Makes more sense, at least.

RM
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fingoals
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by fingoals »

Jags4186 wrote: Wed Mar 17, 2021 6:24 am
fingoals wrote: Tue Mar 16, 2021 8:02 pm
Jags4186 wrote: Tue Mar 16, 2021 7:59 am
jabberwockOG wrote: Tue Mar 16, 2021 7:40 am
Kitkat76 wrote: Tue Mar 16, 2021 1:10 am

Totally, all the folks saying Bitcoin has been a bubble for the past 1,3,5,10 years have finally been vindicated! Just check the returns yourself.

1yr- 919%
3yr- 1,686%
5yr- 13,616%
10yr- 99,999,99%

YTD bonus: 90%

Pump and Dump much? There must be more productive boards out there than Bogleheads to preach about FOMO on crypto and the best ever deluxe joys of becoming a millionaire on digital investments. Better get some NFTs while you can.
The problem I have with Bitcoin is that something shinier can came along and supplant it. Without artificial demand, like say taxes for government issued currency, it will always run the risk of becoming boring and stale. Precious metals have a tangibility to them that Bitcoin can never have. Of course, precious metals haven't returned 100,000,000% in 10 years.
I think that you are underestimating the power of Bitcoin's both brand and scale of its network (both results of the combination of the first mover's advantage, sound technical & economic design and institutional adoption). Your concern seems to be akin to worrying about some new companies come along and supplant Coca Cola in the beverages market and Facebook in the social networks market. Possible? Theoretically, yes. Practically, very unlikely.
MySpace used to dominate the social media market. It was first to market. It was supplanted by Facebook. With an aggressive government, Facebook could be broken up or regulated into oblivion.

Coca Cola has survived and thrived, sure, but other dominant companies haven’t. Kodak is a perfect example of a company with the cutting edge technology that was made obsolete and supplanted by new technology. And Kodak was trying not to become irrelevant.
Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Jags4186
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jags4186 »

fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
diabelli
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by diabelli »

Jags4186 wrote: Wed Mar 17, 2021 3:01 pm
fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
My total guess would be that it's the Myspace of crypto. With ideas that take a strong durable hold, it seems the first mainstream example fizzles out and is replaced by something of a better version of it. Particularly in this case, given how impractical it appears to actually use BTC as anything but a collectible.

Perhaps ETH will take off in a larger way, or something we haven't yet heard of
Jags4186
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jags4186 »

diabelli wrote: Wed Mar 17, 2021 5:22 pm
Jags4186 wrote: Wed Mar 17, 2021 3:01 pm
fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
My total guess would be that it's the Myspace of crypto. With ideas that take a strong durable hold, it seems the first mainstream example fizzles out and is replaced by something of a better version of it. Particularly in this case, given how impractical it appears to actually use BTC as anything but a collectible.

Perhaps ETH will take off in a larger way, or something we haven't yet heard of
I don’t think it’s right to compare Bitcoin to companies.

That said, the biggest difference between MySpace/Facebook and Bitcoin/Bettercoin is friction of leaving. Sure if you cash out today you’ve done quite well but many will be bag holders. There was no risk to leaving MySpace and going elsewhere.
langlands
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by langlands »

Jags4186 wrote: Wed Mar 17, 2021 5:30 pm
diabelli wrote: Wed Mar 17, 2021 5:22 pm
Jags4186 wrote: Wed Mar 17, 2021 3:01 pm
fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
My total guess would be that it's the Myspace of crypto. With ideas that take a strong durable hold, it seems the first mainstream example fizzles out and is replaced by something of a better version of it. Particularly in this case, given how impractical it appears to actually use BTC as anything but a collectible.

Perhaps ETH will take off in a larger way, or something we haven't yet heard of
I don’t think it’s right to compare Bitcoin to companies.

That said, the biggest difference between MySpace/Facebook and Bitcoin/Bettercoin is friction of leaving. Sure if you cash out today you’ve done quite well but many will be bag holders. There was no risk to leaving MySpace and going elsewhere.
Yes, the bitcoin maximalist view, at least in regard to the notion that bitcoin is "digital gold" can never be dismissed entirely. Bitcoin dominance (bitcoin market cap/total crypto market cap) doesn't need to go to 100% for crypto to be viable, but if its role as digital gold is ever replaced by "Bettercoin," the question always remains how long until "Bettercoin" is replaced by "EvenBettercoin."
Jags4186
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jags4186 »

langlands wrote: Wed Mar 17, 2021 5:48 pm
Yes, the bitcoin maximalist view, at least in regard to the notion that bitcoin is "digital gold" can never be dismissed entirely. Bitcoin dominance (bitcoin market cap/total crypto market cap) doesn't need to go to 100% for crypto to be viable, but if its role as digital gold is ever replaced by "Bettercoin," the question always remains how long until "Bettercoin" is replaced by "EvenBettercoin."
And the Bitcoin/Bettercoin/EvenBettercoin dynamic is why I am not on the crypto train.
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unclescrooge
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by unclescrooge »

JBTX wrote: Sat Mar 13, 2021 6:30 pm
diabelli wrote: Sat Mar 13, 2021 9:31 am
SlowMovingInvestor wrote: Sat Mar 13, 2021 9:19 am
MinnGuyInvesting wrote: Sat Mar 13, 2021 9:13 am Not sure if any of you are serious on stimulus checks going to bitcoin.
I'm actually somewhat serious, since I have read that a stim checks over the last few months did pump up various stocks, including GME.

I see a jump early this morning in crypto. No fundamental news that I know of (not that most of crypto has fundamentals), so why the burst of speculation around the time when overnight deposits would show up ? Interesting pattern in any case. 'Wealth' effect certainly a possibility.
It seems intuitive at least that we'd see so much frothiness and imaginary currency at the same time the gov't is just sending thousands of dollars to people, many of whom haven't had any reduction in their regular income
How long until the Fed starts buying Bitcoin ?
Why wouldn't the Fed just release it's own FredCoin?
Mindbender
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Mindbender »

Jags4186 wrote: Wed Mar 17, 2021 6:52 pm
langlands wrote: Wed Mar 17, 2021 5:48 pm
Yes, the bitcoin maximalist view, at least in regard to the notion that bitcoin is "digital gold" can never be dismissed entirely. Bitcoin dominance (bitcoin market cap/total crypto market cap) doesn't need to go to 100% for crypto to be viable, but if its role as digital gold is ever replaced by "Bettercoin," the question always remains how long until "Bettercoin" is replaced by "EvenBettercoin."
And the Bitcoin/Bettercoin/EvenBettercoin dynamic is why I am not on the crypto train.
Bitcoin is upgradable. For example, if for some reason bettercoin has private transactions because that’s in demand at the moment then Bitcoin could upgrade and do the same thing.
Jantoven
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jantoven »

Jags4186 wrote: Wed Mar 17, 2021 3:01 pm
fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
It is interesting you cite MySpace. An article recently delved into bitcoin in particular and addressed the "MySpace" issue:

https://www.lynalden.com/bitcoins-network-effect/

Lyn Alden's articles are always very interesting and explained well. She's not a crypto person, but rather a general investor who has recently decided to allocate some of her asset portfolio to bitcoin. If you have time, it's worth a read.
fingoals
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by fingoals »

Jantoven wrote: Wed Mar 17, 2021 9:47 pm
Jags4186 wrote: Wed Mar 17, 2021 3:01 pm
fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
It is interesting you cite MySpace. An article recently delved into bitcoin in particular and addressed the "MySpace" issue:

https://www.lynalden.com/bitcoins-network-effect/

Lyn Alden's articles are always very interesting and explained well. She's not a crypto person, but rather a general investor who has recently decided to allocate some of her asset portfolio to bitcoin. If you have time, it's worth a read.
Good catch! The following is IMO the key point on the subject from that post: "MySpace was disrupted before it ever reached true network dominance".
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dmcmahon
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by dmcmahon »

decapod10 wrote: Tue Mar 16, 2021 6:47 pm
EndersTame wrote: Tue Mar 16, 2021 1:37 pm What is ETH's solution to the energy issue facing BTC, which is only going to get more attention with time?
ETH 2.0 will switch from Proof of Work to Proof of Stake, which should dramatically decrease energy requirements because you are not wasting energy "mining". This is some risk that the transition will fail, or the transition will take too long and some other blockchain will start to take over.
This is a critical change that’s badly needed and not commonly understood in the financial side of the crypto community, but definitely on the radar of the engineering side for several years. This transition needs to work or crypto is going to run face first into ESG.
Enganerd
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Enganerd »

Jantoven wrote: Wed Mar 17, 2021 9:47 pm
Jags4186 wrote: Wed Mar 17, 2021 3:01 pm
fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
It is interesting you cite MySpace. An article recently delved into bitcoin in particular and addressed the "MySpace" issue:

https://www.lynalden.com/bitcoins-network-effect/

Lyn Alden's articles are always very interesting and explained well. She's not a crypto person, but rather a general investor who has recently decided to allocate some of her asset portfolio to bitcoin. If you have time, it's worth a read.
Thanks for sharing. Lyn's content always seems logical and evidence based, something I find lacking in much media produced by btc proponents.
liksah
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by liksah »

+1 Thanks for sharing. I also read her analysis of Ethereum and it was really spot on!
https://www.lynalden.com/ethereum-analysis/
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RovenSkyfall
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by RovenSkyfall »

MotoTrojan wrote: Mon Mar 15, 2021 11:55 am
surfstar wrote: Mon Mar 15, 2021 11:51 am
MotoTrojan wrote: Mon Mar 15, 2021 11:36 am
surfstar wrote: Mon Mar 15, 2021 11:20 am Ironic that [in general] the younger people are into Bitcoin and also the environment / climate change. I guess they don't see the conflict when they're making money :oops:
Ironic indeed. Although they can always donate proceeds to causes.

I have considered nibbling on the current tasty opportunity in tobacco stocks and wouldn't lose sleep over it. They don't need my capital (Altria distributes over 80% of it's earnings to shareholders), and if I get outsized returns I could always donate some of it to an anti-tobacco cause.
Right. But I'd argue that purchasing/driving the price up of a tobacco stock, doesn't directly lead to more tobacco use.
Driving the price of Bitcoin up, leads to more mining, which is wasted electricity/resources for no good reason.

Watch - when someone wants to lower Bitcoin's price, you might see a concerted social media effort espousing the energy waste that mining of Bitcoin causes...
All good points. It makes no sense to me, but the FOMO does get to me... Especially as a systematic value investor :shock:.
The Fomo is hard. Here are some articles so your conscience can settle you-- 1, 2, 3, 4.

I think of investing in blockchain like going to a pawnshop. You hope to buy a coin from a seller with questionable reputation, hope it goes up in value, hope it doesnt get stolen from you somewhere along the way. When I think about it that way (and with the environment) I have a lot less FOMO.
I saved my money, but it can't save me | The Chariot
Jantoven
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jantoven »

fingoals wrote: Wed Mar 17, 2021 10:08 pm
Jantoven wrote: Wed Mar 17, 2021 9:47 pm
Jags4186 wrote: Wed Mar 17, 2021 3:01 pm
fingoals wrote: Wed Mar 17, 2021 12:44 pm Good points. However, MySpace, while having been the most dominant social network has never reached even a fraction of the scale that Facebook has been able to capture: almost 3B(!) active monthly users in 2021. Thus, it is highly unlikely (sans breaking up or extremely aggressive regulation, of course) that another traditional social network company will replace the dominant position of Facebook. Earlier I've thought that some feasible contenders might come from the decentralized social networks space, but it seems that it is not the case (at least, in the observable future).

Kodak is good example. However, even recognizing some similarities, the core difference between Kodak and Bitcoin is that the former's main products were much easier to replace with a new technology than it might be to replace a large and constantly growing (including emerging institutional adoption) financial network with significant funds staked within.
Bitcoin has about the same number of owners that MySpace had monthly users at its peak--100mm worldwide. So it could either become the Facebook of crypto or be the MySpace of crypto :wink: .
It is interesting you cite MySpace. An article recently delved into bitcoin in particular and addressed the "MySpace" issue:

https://www.lynalden.com/bitcoins-network-effect/

Lyn Alden's articles are always very interesting and explained well. She's not a crypto person, but rather a general investor who has recently decided to allocate some of her asset portfolio to bitcoin. If you have time, it's worth a read.
Good catch! The following is IMO the key point on the subject from that post: "MySpace was disrupted before it ever reached true network dominance".
Thanks! I've been trying to read and learn about cryptocurrency in general. The bitcoin bulls are a bit over-the-top for me and I was looking for more of a "neutral" investor who decided to invest in it and what their rational was. I have enjoyed Lyn's other articles and thought it was very well-reasoned. And yeah, I think that part is the key - MySpace never reached network dominance. Bitcoin has been around for over 12 years and is at a market cap now that indicates true dominance. I don't think it can be displaced, at least in the crypto world, in terms of a store of value.

I'm skeptical about models that predict 1mil + per BTC, but I've seen some other models that predict 150k per coin within 4-5 years. In truth, for me, if it can "beat the market," which it appears it can and is doing, then I'll be very happy.
Jantoven
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jantoven »

liksah wrote: Thu Mar 18, 2021 7:45 am +1 Thanks for sharing. I also read her analysis of Ethereum and it was really spot on!
https://www.lynalden.com/ethereum-analysis/
I appreciated her take on Ethereum. I have a very small amount invested in it, just in case it does well over the long-term. I don't really know enough about crypto, and I view this as all highly speculative, but the concept of it all is rather interesting as I delve into blockchain technology and the promise it holds.
yosim
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by yosim »

Flannelbeard wrote: Thu Mar 18, 2021 7:52 am
Mindbender wrote: Wed Mar 17, 2021 8:45 pm
Jags4186 wrote: Wed Mar 17, 2021 6:52 pm
langlands wrote: Wed Mar 17, 2021 5:48 pm
Yes, the bitcoin maximalist view, at least in regard to the notion that bitcoin is "digital gold" can never be dismissed entirely. Bitcoin dominance (bitcoin market cap/total crypto market cap) doesn't need to go to 100% for crypto to be viable, but if its role as digital gold is ever replaced by "Bettercoin," the question always remains how long until "Bettercoin" is replaced by "EvenBettercoin."
And the Bitcoin/Bettercoin/EvenBettercoin dynamic is why I am not on the crypto train.
Bitcoin is upgradable. For example, if for some reason bettercoin has private transactions because that’s in demand at the moment then Bitcoin could upgrade and do the same thing.
Could being the key operator. Miners get to vote and ultimately decide on changes/upgrades. 2/3 of Bitcoin hashrate is in China. Doesn't sound very decentralized to me.
it's actually nodes that accept any proposed changes but keep going
ohboy!
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ohboy! »

Uniswamp pumping in anticipation for V3.

Generates $100M a month in fee revenue. Has $16B+ in treasury. Nothing to see here...
Jantoven
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jantoven »

ohboy! wrote: Fri Mar 19, 2021 11:54 pm Uniswamp pumping in anticipation for V3.

Generates $100M a month in fee revenue. Has $16B+ in treasury. Nothing to see here...
So what makes Uniswap better than its competitors?
ohboy!
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ohboy! »

Jantoven wrote: Sat Mar 20, 2021 9:58 am
ohboy! wrote: Fri Mar 19, 2021 11:54 pm Uniswamp pumping in anticipation for V3.

Generates $100M a month in fee revenue. Has $16B+ in treasury. Nothing to see here...
So what makes Uniswap better than its competitors?
What competitors? They have $16B in treasury and do 80% of DEX volume. The team, the community, and they can hire anyone or fund anything now.
Jantoven
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jantoven »

ohboy! wrote: Sat Mar 20, 2021 10:30 am
Jantoven wrote: Sat Mar 20, 2021 9:58 am
ohboy! wrote: Fri Mar 19, 2021 11:54 pm Uniswamp pumping in anticipation for V3.

Generates $100M a month in fee revenue. Has $16B+ in treasury. Nothing to see here...
So what makes Uniswap better than its competitors?
What competitors? They have $16B in treasury and do 80% of DEX volume. The team, the community, and they can hire anyone or fund anything now.
Well, my question was moreso one from a naive standpoint. I don't know much about Uniswap and its role/position in DeFi. Could you elaborate on its utility, and why it could be a better investment than other DeFi products?
ohboy!
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by ohboy! »

Jantoven wrote: Sat Mar 20, 2021 12:05 pm
ohboy! wrote: Sat Mar 20, 2021 10:30 am
Jantoven wrote: Sat Mar 20, 2021 9:58 am
ohboy! wrote: Fri Mar 19, 2021 11:54 pm Uniswamp pumping in anticipation for V3.

Generates $100M a month in fee revenue. Has $16B+ in treasury. Nothing to see here...
So what makes Uniswap better than its competitors?
What competitors? They have $16B in treasury and do 80% of DEX volume. The team, the community, and they can hire anyone or fund anything now.
Well, my question was moreso one from a naive standpoint. I don't know much about Uniswap and its role/position in DeFi. Could you elaborate on its utility, and why it could be a better investment than other DeFi products?
It has similar exchange volumes to Coinbase. Which is expected to be valued around $100B. Uniswap created a specific AMM model of liquidity and trading that has proven a simple and effective solution for decentralized trading without an order book. The concept revolves around participants providing liquidity to trading pairs and thus earning part of the trading fees. Despite ridiculous ethereum tx fees at the moment, the exchange continues to be the biggest user of Ethereum. They have arguably the smartest team in the space, are very aligned with Ethereum, and this is why they are the most valued protocol in Defi. Given their treasury it sure seems they are in a position to dominate the space going forward as they have a near endless warchest of funds to innovate and the personnel and community to make it happen.

The hype for Uniswap v3 is huge and should be unveiled in a matter of days. That has caused a significant run-up in price but some could easily argue that with the fundamentals it’s still undervalued.
Jantoven
Posts: 17
Joined: Wed Feb 28, 2018 11:19 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jantoven »

ohboy! wrote: Sat Mar 20, 2021 1:36 pm
Jantoven wrote: Sat Mar 20, 2021 12:05 pm
ohboy! wrote: Sat Mar 20, 2021 10:30 am
Jantoven wrote: Sat Mar 20, 2021 9:58 am
ohboy! wrote: Fri Mar 19, 2021 11:54 pm Uniswamp pumping in anticipation for V3.

Generates $100M a month in fee revenue. Has $16B+ in treasury. Nothing to see here...
So what makes Uniswap better than its competitors?
What competitors? They have $16B in treasury and do 80% of DEX volume. The team, the community, and they can hire anyone or fund anything now.
Well, my question was moreso one from a naive standpoint. I don't know much about Uniswap and its role/position in DeFi. Could you elaborate on its utility, and why it could be a better investment than other DeFi products?
It has similar exchange volumes to Coinbase. Which is expected to be valued around $100B. Uniswap created a specific AMM model of liquidity and trading that has proven a simple and effective solution for decentralized trading without an order book. The concept revolves around participants providing liquidity to trading pairs and thus earning part of the trading fees. Despite ridiculous ethereum tx fees at the moment, the exchange continues to be the biggest user of Ethereum. They have arguably the smartest team in the space, are very aligned with Ethereum, and this is why they are the most valued protocol in Defi. Given their treasury it sure seems they are in a position to dominate the space going forward as they have a near endless warchest of funds to innovate and the personnel and community to make it happen.

The hype for Uniswap v3 is huge and should be unveiled in a matter of days. That has caused a significant run-up in price but some could easily argue that with the fundamentals it’s still undervalued.
I see its current market cap is around 15 billion. What would you project its future market cap to be? What if, for example, something like DOT ends up taking over ethereum's role in the marketplace?
jajare58
Posts: 40
Joined: Wed Oct 28, 2020 10:51 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by jajare58 »

Since this thread discussing various cryptocurrency, are there any sites which explains all different types of Alt coins or stable coins in simple terms. On Coinbase, I see there are many tradable coins but I want to learn more before I start investing( <0.5% if my portfolio) I know Bitcoin, ETH, Litecoin. But always get confused with other ETH Based tokens Uniswap, Sushiswap, etc.
Last edited by jajare58 on Fri Apr 09, 2021 12:41 pm, edited 1 time in total.
collinit19
Posts: 4
Joined: Mon Mar 22, 2021 4:49 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by collinit19 »

50,000 is not much considering some are predicting it to hit 300,000 and then be stagnant for years.
Jantoven
Posts: 17
Joined: Wed Feb 28, 2018 11:19 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Jantoven »

collinit19 wrote: Mon Mar 22, 2021 4:56 pm 50,000 is not much considering some are predicting it to hit 300,000 and then be stagnant for years.
That one model that predicts it'll hit 300k this year also predicts it'll shoot up to 5mil per coin in 2025, lol.
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

VISA processed it's first transaction on USDC/ETH today. I'm not certain what the situation was where this would be needed, but I suppose it's a sign continued mainstream adoption.
SlowMovingInvestor
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Joined: Sun Sep 11, 2016 11:27 am

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by SlowMovingInvestor »

decapod10 wrote: Mon Mar 29, 2021 12:29 pm VISA processed it's first transaction on USDC/ETH today. I'm not certain what the situation was where this would be needed, but I suppose it's a sign continued mainstream adoption.
Very patient customer, no doubt :twisted:
decapod10
Posts: 1166
Joined: Thu Dec 28, 2017 5:46 pm

Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

SlowMovingInvestor wrote: Mon Mar 29, 2021 7:01 pm
decapod10 wrote: Mon Mar 29, 2021 12:29 pm VISA processed it's first transaction on USDC/ETH today. I'm not certain what the situation was where this would be needed, but I suppose it's a sign continued mainstream adoption.
Very patient customer, no doubt :twisted:
Transferred $100 to his mom, paid $300 in fees, accidently typed in the wrong address it all got burned, lol... Looks like it was just a test transaction though before going live. I'm not quite sure what the use case for this would be, but maybe we will see. I guess if you wanted to buy something in Ether, this would be much faster/easier than buying ETH through an exchange. Like now you would have to either do ACH to Coinbase and wait 5 days to clear, or do a wire transfer to Coinbase.

Edit to add: I guess on boarding to ETH in general as well, which would include DeFi.
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