Crypto bulls are back. Are you getting in?

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Dave55
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Re: Crypto bulls are back. Are you getting in?

Post by Dave55 » Thu Apr 11, 2019 9:10 am

newtothiswhat wrote:
Tue Apr 09, 2019 9:16 pm
I know this forum discourages investing in crypto and views it as rat poison.

But after some research I felt it was worth putting in 0.5% of my net worth in it. Money which I would not lose sleep over even if it all went crashing down to zero.

There have been pretty good signs of blockchain / cryptocurrency adoption for the past few months which made me pull the trigger.
1) Facebook and JP Morgan want to create their own coins.
2) Institutional investors and venture capital money have been pouring into cryptocurrency or blockchain startups. The biggest one I read about was GIC (of Singapore) investing in Coinbase.
3) Signs of increasing adoption. Where I come from, crypto is increasingly accepted as a form of payment. So its not like it is purely an investment. I have paid for stuff in crypto too.
4) Bubble has clearly popped. Entry at this stage would be investing in a contrarian style.

So would you personally allocate a tiny portion of your funds to crypto?
No.

MichCPA
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Re: Crypto bulls are back. Are you getting in?

Post by MichCPA » Thu Apr 11, 2019 9:16 am

The general pattern of returns on crypto has been short explosive growth followed by long depressive busts (like 75% losses). Given the 40% run up this year, I would take the opposite view. GET OUT. Even after a spike to about 20k, bitcoin is basically where it was 18 months ago (5k).

If you can't invest more than 5k per $1m of net worth, what is the point anyway?

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Re: Crypto bulls are back. Are you getting in?

Post by nisiprius » Thu Apr 11, 2019 9:24 am

HawkeyePierce wrote
Note that retailers accepting Bitcoin aren't actually taking possession of Bitcoin in the majority of cases. They're using services like Bitpay or Coinbase Commerce to accept Bitcoin from customers but immediately convert it to regular currency (dollars, euros, whatever). It's no different than a merchant listing prices in multiple (traditional) currencies. Joe's Bobbleheads Online isn't taking possession of euros and pounds and yen, he's just using a merchant account that lets his customers pay in their currency but converting all of that into his currency so he only has to handle dollars.
And what's interesting is that at the moment, even given these online payment systems, there seem to be very few merchants accepting bitcoin.

Reports by bitcoin enthusiasts have been wildly exaggerated for years. Online pages of "merchants accepting bitcoin" are untrustworthy. For example, as far as I've been able to determined, only three locations of the 30,000-location Subway chain has ever accepted bitcoin--one of them was one of Subway's fourteen locations in Allentown, Pennsylvania. This quickly led to Subway's logo appearing on pages of "things you can buy with bitcoin" and frequent claims that "you can buy a sandwich at Subway with bitcoin." The way the one in Allentown worked, according to a local newspaper story, was that the owner happened to be a bitcoin fan. He brought his laptop with him to Subway, and would personally process customers' bitcoin payment himself. Presumably it could not be done when he wasn't personally on the premises.

Many places tried small pilot projects or tests, and got added to such lists--and never removed. A realty firm in London experimented briefly with accepting monthly rent payments in bitcoin at one of its office, and because the firm sells houses, this quickly led to online claims that "now you can buy a house with bitcoin."

A Feb. 2019 Planet Money episode describes venture capitalist Ben Horowitz settling a bet he made five years ago with financial journalist Felix Salmon. Horowitz bet that by 2019, a polling firm would find that at least 10% of people polled would report having bought something with bitcoin within the last month. Horowitz lost and settled. (The actual number was 3% but everyone agreed the description of the purchases made was iffy. Many of the "purchases" were purchases of Litecoin and other cryptocurrencies. Some claimed to have used it with merchants like Walmart, which is known not to accept bitcoin).

I've noticed that the Coinstar machine in the local supermarket now has a sign on it saying you can "buy bitcoin." According to Coinstar's website--I'm not going to try the machine out just to see what happens--you can only buy it with paper currency, not with coins! What is significant is that the only transaction you can perform with bitcoin is to buy it. (You get a printed redemption code and can then open an online account at some bitcoin exchange and redeem it). You cannot--dare I say, "of course you cannot"--sell bitcoin. If you could, in fact, redeem coin-jar-sized amounts of bitcoin and get a credit slip in dollars and buy groceries with it, then I'd say it might be a small breakthrough. But, no.
Last edited by nisiprius on Fri Apr 12, 2019 5:44 pm, edited 2 times in total.
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poor & ignorant soul
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Re: Crypto bulls are back. Are you getting in?

Post by poor & ignorant soul » Thu Apr 11, 2019 9:43 am

RickBoglehead wrote:
Wed Apr 10, 2019 8:23 am
ankonaman wrote:
Wed Apr 10, 2019 5:18 am
Spinola wrote:
Tue Apr 09, 2019 10:47 pm
Unregulated, highly speculative, easily manipulated, little or no accountability, beloved of drug cartels and money launderers, virtual "coins" backed by nothing, supported by no monetary authority or central bank: what's not to love? :oops:
This ^^^ pretty much sums it up.
I wouldn't put a dime. To me, those that invest in this type of stuff end up with the rewards they deserve.

I've never bought a virtual good in my life, and suspect that I will go to my grave without having done so.
Is software a virtual good? I suspect you have bought an operating system at one point. Similarly: music, movies, video games

A cryptocurrency is not merely a virtual good, it is a virtual good with no intrinsic use.

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Re: Crypto bulls are back. Are you getting in?

Post by RickBoglehead » Thu Apr 11, 2019 9:45 am

poor & ignorant soul wrote:
Thu Apr 11, 2019 9:43 am
RickBoglehead wrote:
Wed Apr 10, 2019 8:23 am
ankonaman wrote:
Wed Apr 10, 2019 5:18 am
Spinola wrote:
Tue Apr 09, 2019 10:47 pm
Unregulated, highly speculative, easily manipulated, little or no accountability, beloved of drug cartels and money launderers, virtual "coins" backed by nothing, supported by no monetary authority or central bank: what's not to love? :oops:
This ^^^ pretty much sums it up.
I wouldn't put a dime. To me, those that invest in this type of stuff end up with the rewards they deserve.

I've never bought a virtual good in my life, and suspect that I will go to my grave without having done so.
Is software a virtual good? I suspect you have bought an operating system at one point. Similarly: music, movies, video games

A cryptocurrency is not merely a virtual good, it is a virtual good with no intrinsic use.
To me a virtual good is buying stuff in a game, i.e. equipping yourself with farm implements or such.

I don't play games.

The only music I own is on vinyl or CD.
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avbferry
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Re: Crypto bulls are back. Are you getting in?

Post by avbferry » Thu Apr 11, 2019 9:50 am

Well if you do get in, be mindful about protecting your cryptocurrency. I know some people who have lost a lot cause they misplaced their key phrase that grants them access to their funds.

LiterallyIronic
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Re: Crypto bulls are back. Are you getting in?

Post by LiterallyIronic » Thu Apr 11, 2019 9:51 am

Nope. I don't invest in currencies, beanie babies, baseball cards, tulips, or precious metals. That's all speculation and/or "greater fool" to me. Stocks and bonds only.

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Re: Crypto bulls are back. Are you getting in?

Post by MotoTrojan » Thu Apr 11, 2019 9:53 am

https://techcrunch.com/2019/04/10/coinb ... in-the-uk/

2.5% transaction fees but now you can use your crypto all over the UK!

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Re: Crypto bulls are back. Are you getting in?

Post by nisiprius » Thu Apr 11, 2019 10:00 am

avbferry wrote:
Thu Apr 11, 2019 9:50 am
Well if you do get in, be mindful about protecting your cryptocurrency. I know some people who have lost a lot cause they misplaced their key phrase that grants them access to their funds.
It's not just "some people." It's staggering. The stated numbers vary, reliability is unclear, and some of the stories are by entities with vested interests, but it appears that something like 20% of all bitcoin mined has been lost. Of course, some proportion of that may have been lost by people who made tiny experimental purchases years ago just to see how it was done, and didn't take care of it because the value was so small, but still. 20%?

I wonder what percentage of all gold ever mined has been lost. Doubloons in Spanish galleons at the bottom of the sea, pirate treasure buried and the map lost...
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Re: Crypto bulls are back. Are you getting in?

Post by GoldenFinch » Thu Apr 11, 2019 2:49 pm

Strayshot wrote:
Thu Apr 11, 2019 7:10 am
GoldenFinch wrote:
Thu Apr 11, 2019 6:58 am
Strayshot wrote:
Thu Apr 11, 2019 6:42 am
Me personally, I’m getting back into tulips instead of crypto. It has been a few centuries of a lull, but I really feel like the tulip bulls are back and have seen prices going up a couple cents here and there so there is definitely some movement. In fact, I saw a neighbor plant some fresh bulbs just yesterday which is more than enough of a cue to get back in.
I have found tulips to be a bad investment. They bloom for one year and don’t come up the next year. Chipmunks (I think) dig up the bulbs and eat them.
Ah, you haven’t been keeping up on the technology! There is a new bioengineered tulip that uses a technology called tulipchain, which guarantees that the tulip bulb will clone and come up year after year so that you will never lose the initial value of your tulip purchase. In addition, each year the flower modifies its coloring to become even more complex and beautiful. I suggest buying in now before the market really skyrockets. With these new tulips, the seeds take longer and longer to grow over each tulip generation which makes the next tulip batch harder to acquire, so I feel like tulip mining will be really profitable in the beginning and those that get in early have the most to gain.
So cool! Thanks for the tip. Will definitely get in early. :happy I’ll ride it all the way up and of course get out right before the bubble bursts. :beer

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Re: Crypto bulls are back. Are you getting in?

Post by HawkeyePierce » Thu Apr 11, 2019 3:34 pm

Quite remarkable that in their distrust of banks, crypto enthusiasts have yet to reliably replicate their most critical function: taking deposits and not losing track of them.

This is such a basic function and works so well that nobody even questions it! From a local credit union to online banks to giants like Wells Fargo, there's absolutely no question that if I deposit a hundred bucks they aren't just going to misplace it somehow.

Yet this routinely happens with cryptocurrencies.

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Re: Crypto bulls are back. Are you getting in?

Post by DonIce » Thu Apr 11, 2019 3:59 pm

HawkeyePierce wrote:
Thu Apr 11, 2019 3:34 pm
Quite remarkable that in their distrust of banks, crypto enthusiasts have yet to reliably replicate their most critical function: taking deposits and not losing track of them.

This is such a basic function and works so well that nobody even questions it! From a local credit union to online banks to giants like Wells Fargo, there's absolutely no question that if I deposit a hundred bucks they aren't just going to misplace it somehow.

Yet this routinely happens with cryptocurrencies.
Not getting your deposits back was a routine concern before the creation of the FDIC. I'm guessing it's gonna be a long while before the federal government decides to ensure crypto deposits.

If I really wanted to "invest" in bitcoin (which I don't) I'd probably do it using bitcoin futures at a reputable brokerage:

https://www.cmegroup.com/trading/equity ... tions.html

You can buy them on etrade, IB, etc. That way you can be exposed to the price swings of BTC without worrying about your BTC being lost by a bitcoin exchange/wallet.

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Re: Crypto bulls are back. Are you getting in?

Post by shans2000 » Thu Apr 11, 2019 5:27 pm

I'm not a believer in Crypto currency as such, but I am willing to bet on the future of blockchain. IMO, the best pure-play way to invest in blockchain currently is Ethereum. I don't see it as a cryptocurrency, its a blockchain platform. Ethereum clearly has a long way to go before it will actually work on a large scale, but if it does fulfill its promise it can potentially be huge a disruptor. I am putting my money in for long term, initially got in several years ago and just riding the ups and downs. Its like putting money in an early stage venture, it will most likely go to zero but if it does make it, it will make it big.

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Re: Crypto bulls are back. Are you getting in?

Post by palaheel » Thu Apr 11, 2019 7:06 pm

Strayshot wrote:
Thu Apr 11, 2019 6:42 am
Me personally, I’m getting back into tulips instead of crypto. It has been a few centuries of a lull, but I really feel like the tulip bulls are back and have seen prices going up a couple cents here and there so there is definitely some movement. In fact, I saw a neighbor plant some fresh bulbs just yesterday which is more than enough of a cue to get back in.
Agreed. I use crypto for all of my tulip bulb options.
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Re: Crypto bulls are back. Are you getting in?

Post by nisiprius » Thu Apr 11, 2019 8:29 pm

shans2000 wrote:
Thu Apr 11, 2019 5:27 pm
I'm not a believer in Crypto currency as such, but I am willing to bet on the future of blockchain. IMO, the best pure-play way to invest in blockchain currently is Ethereum. I don't see it as a cryptocurrency, its a blockchain platform. Ethereum clearly has a long way to go before it will actually work on a large scale, but if it does fulfill its promise it can potentially be huge a disruptor. I am putting my money in for long term, initially got in several years ago and just riding the ups and downs. Its like putting money in an early stage venture, it will most likely go to zero but if it does make it, it will make it big.
Ethereum has the same clouds of shenanigans around it as other cryptocurrencies, though.

$300 million worth of ether lost in 2017 due to a software bug.

The Ethereum community voting down software modifications that would have made it possible to recover ether in situations like that.

QuadrigaCX, one of the biggest Ethereum exchanges, and, I believe, "reputable" until disaster struck, losing $260 million worth of ether belonging to 115,000 depositors. Nobody even knows yet whether it is lost, or permanently inaccessible, or stolen.

To say you are "willing to bet on the future of blockchain" means very little. It's like saying in 1974, "I am willing to bet on the future of personal computers." You can't place a bet on "the future of personal computers." You can only place a bet on a specific personal computer company. No matter how much faith you have in the future of personal computers, you'll lose your money if you bet it on Osborne Computer Company. Somehow you need to know that it is going to be Apple, not Exidy, not Commodore, not Atari.
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Re: Crypto bulls are back. Are you getting in?

Post by pokebowl » Thu Apr 11, 2019 9:05 pm

newtothiswhat wrote:
Tue Apr 09, 2019 9:16 pm

So would you personally allocate a tiny portion of your funds to crypto?
I was provided ~$4 in free stock when I tried out Robinhood last year. Sold the stock intentionally at a little loss and threw the remainder into dogecoin. So far, I've made a 45% return! Which equals a tad under $2 at the moment, but soon too the moon. I feel it. :twisted:
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Re: Crypto bulls are back. Are you getting in?

Post by JonnyDVM » Thu Apr 11, 2019 9:08 pm

I’m a hard pass, but if you’re interested, I agree now is as good a time as any.
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Re: Crypto bulls are back. Are you getting in?

Post by inverter » Thu Apr 11, 2019 9:38 pm

barnaclebob wrote:
Wed Apr 10, 2019 9:56 am
newtothiswhat wrote:
Wed Apr 10, 2019 7:26 am
inverter wrote:
Tue Apr 09, 2019 9:22 pm
Wow. Your post shows a serious lack of understanding. Blockchain is very different from crypto is very different from ethereum, bitcoin, etc. Blockchain is more like a database, crypto is a use, and bitcoin is a specific instance of use. JP Morgan using their own stable coin, etc. says nothing but the underline technology could be interesting.
Care to explain why JP Morgan using their own stable coin means nothing? Isn't that a huge indicator of their view on the digital currency market?
Did it mean anything for the value of apps in general when JP Morgan created an app for their company?
Exactly. Just because JP Morgan is creating their own stable coin (which will be used for cross border transfers and will immediately be transferred back into “real” currencies says nothing about the currencies you will be able to buy.

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newtothiswhat
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Re: Crypto bulls are back. Are you getting in?

Post by newtothiswhat » Thu Apr 11, 2019 10:24 pm

greg24 wrote:
Wed Apr 10, 2019 10:02 am
Which of the 1600+ crypto currencies are you going to invest in?

What other currencies do you invest in?
I long BTC and XMR. What about u?
HawkeyePierce wrote:
Thu Apr 11, 2019 9:01 am
Note that retailers accepting Bitcoin aren't actually taking possession of Bitcoin in the majority of cases. They're using services like Bitpay or Coinbase Commerce to accept Bitcoin from customers but immediately convert it to regular currency (dollars, euros, whatever).

It's no different than a merchant listing prices in multiple (traditional) currencies. Joe's Bobbleheads Online isn't taking possession of euros and pounds and yen, he's just using a merchant account that lets his customers pay in their currency but converting all of that into his currency so he only has to handle dollars.

I wouldn't necessarily call that "bullish on Bitcoin" anymore than a merchant who accepts other foreign currencies is bullish on euros. Adding a new payment gateway is pretty trivial with most eCommerce platforms.

(I build online payment systems for a living)
Thanks for the insights, never knew about that! What are your views on payment systems like Tenx?
barnaclebob wrote:
Wed Apr 10, 2019 9:56 am
Did it mean anything for the value of apps in general when JP Morgan created an app for their company?
Technology risk is one of the key risks of any new kind of tech. Their adoption of blockchain technology speaks volumes about the maturity of the tech. No? Some people are still skeptical about whether it can scale, whether it can be hacked etc. But a regulated entity willing to adopt it says alot.
TomCat96 wrote:
Wed Apr 10, 2019 8:44 pm
Aren't cryptocurrencies still down about 75%? Bitcoin hit a high of approximately 20k and is sitting at 5k. Im not sure I would say that the bulls are back yet.
It went from 4k to 5k in under a week?
OneBreeze wrote:
Wed Apr 10, 2019 9:12 pm
Your 1 - 3 suggests adoption of block chain or other crypto currencies that you have not invested in. Adoption of block chain technologies or even crypto currencies in general does not make the currencies more valuable. Fiat currency has great adoption. That does not mean its value is going to sky rocket.

4 is clearly false since you’re reacting to a bull run.

That being said you can make a lot of money in crypto if you get lucky or correctly predict the actions of the other buyers and sellers. It’s a pure gamble and that’s great if you’re into that.
Have you seen how the currency markets operate? If there is more demand for one currency over another, what happens?

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Re: Crypto bulls are back. Are you getting in?

Post by NYCwriter » Thu Apr 11, 2019 11:12 pm

Nah, just got out actually. I sold most of what I had left. Then again, I had followed crypto for a few years before I bought in 2016 when it was much cheaper. I sold half during that crazy spike and left the rest until the recent move. Still have a tiny leftover amount.

I do think BTC has viability as it remains the most established crypto, but blockchain tech itself is still being developed for other applications, and the jury's out on which Shakespeare will emerge. The "store of value" argument remains tenuous given volatility. The expectation of institutional support hasn't really emerged, and the energy costs make production inefficient.

I remember warning people away when it skyrocketed. Parabolic moves of any kind in the market are dangerous and usually end badly. I still feel a little sick thinking about all those people who lost so much money, especially now that we know how much manipulation there was behind the price moves. The all the junk ICOs were the ultimate penny stock scam.

Just doing the taxes on it was a pita, so I'm glad I won't have to deal with extra mailed paperwork again until next year. :)

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Re: Crypto bulls are back. Are you getting in?

Post by PurpleArc » Fri Apr 12, 2019 1:44 am

Some people actually built their retirement fund with it, this is not investment advice but owning 1 bitcoin might make some difference decades later.

And yes, there are lots of ICO scam coins.

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Re: Crypto bulls are back. Are you getting in?

Post by Strayshot » Fri Apr 12, 2019 8:21 am

PurpleArc wrote:
Fri Apr 12, 2019 1:44 am
Some people actually built their retirement fund with it, this is not investment advice but owning 1 bitcoin might make some difference decades later.

And yes, there are lots of ICO scam coins.
For every winner in bitcoin speculation who built a retirement, there were an equal number of losers who ended in ruin. You just don’t hear from the losers, buying at 16k and selling at 8k and halving their investment is a short timeframe.

Every ICO is a scam, because cryptocurrency is a scam. Actually, layers of scams if you think about it (and read nisiprius’s posts in this thread). It was a extractive system that made a small group lots of money, a larger group some small amount money, and a really large group lost huge amounts of money. Some really inventive folks even figured out how to lay multi-level-marketing scams on top of the crypto scams, they really deserve the gold trophies.

I thought tulips were the next big thing, but now I am wondering based on a previous poster if I should get into some private equity with the rat poison vendors! So many “investment” options!

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Re: Crypto bulls are back. Are you getting in?

Post by barnaclebob » Fri Apr 12, 2019 8:46 am

newtothiswhat wrote:
Thu Apr 11, 2019 10:24 pm
barnaclebob wrote:
Wed Apr 10, 2019 9:56 am
Did it mean anything for the value of apps in general when JP Morgan created an app for their company?
Technology risk is one of the key risks of any new kind of tech. Their adoption of blockchain technology speaks volumes about the maturity of the tech. No? Some people are still skeptical about whether it can scale, whether it can be hacked etc. But a regulated entity willing to adopt it says alot.
Nobody is doubting the usefulness of blockchain technology. They are doubting if one of its uses will be a currency where if you buy a few thousand now you'll be a millionaire in a few years.

They are also doubting that skill will have anything to do with anyone who does make a killing on it because at this point it hasn't proven to be better than an expensive game of hot potato. There is zero chance of an unmanipulated market right now. Since I'm not the one doing the manipulation I have no idea when the manipulators are going to cash in and take my money. If i'm going to gable I'll at least do it where the market manipulators have to be honest about taking my money.

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Re: Crypto bulls are back. Are you getting in?

Post by cheezit » Fri Apr 12, 2019 9:10 am

barnaclebob wrote:
Fri Apr 12, 2019 8:46 am
Nobody is doubting the usefulness of blockchain technology.
Lots of people are doubting the usefulness of blockchains, cf. this article and these discussions among programmers who once formed the core
of blockchain's fanbase.

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Re: Crypto bulls are back. Are you getting in?

Post by Sandtrap » Fri Apr 12, 2019 9:14 am

The fees and costs are enormous. Buy, sell, exchange.
Did you calculate the actual gains (Net ROI) even if it seemed positive?

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Re: Crypto bulls are back. Are you getting in?

Post by GoldenFinch » Fri Apr 12, 2019 9:19 am

I think you are late to the party. If you’re trying to make big bucks in this stuff, that ship has sailed. Now it’s just eradic up and down based on whenever the powers that be or crowds decide to pull the tablecloth out from under the people who got in late looking for quick riches. I still vote for a health care etf with your .5 % of portfolio. That’s a sector you can probably count on growing over time. If you gamble in crypto/blockchain etcetra with your .5% you will likely lose it. Why do that?

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Re: Crypto bulls are back. Are you getting in?

Post by nisiprius » Fri Apr 12, 2019 9:21 am

NYCwriter wrote:
Thu Apr 11, 2019 11:12 pm
...I do think BTC has viability as it remains the most established crypto, but blockchain tech itself is still being developed for other applications, and the jury's out on which Shakespeare will emerge.
This.
The "store of value" argument remains tenuous given volatility.
This, too.
The expectation of institutional support hasn't really emerged, and the energy costs make production inefficient.
And that.

Most scams have a "good story" behind them. The original Ponzi scheme (as in Charles Ponzi in 1920) was based on a valid observation about the possibility of arbitraging international postal reply coupons. There was a good reason, that anybody could understand, as to why, in theory, you could make money that way. You could even buy a few international postal reply coupons and try it out yourself on your next trip. Ponzi himself might have believed it initially. The problem is that in practice it couldn't be scaled up to make more than chump change, or to pay the people who would need to do the buying and selling.

So, Ponzi had a plausible story, but wasn't actually making the investments he said he was making.

There's usually something plausible behind a scam. The brick of newspaper cut to paper money size has to have a real bill on the top and bottom of the stack. The multilevel marketing system really does have boxes of detergent to sell, even if the only way to make much money is by selling distributorships rather than detergent. The Long Blockchain Company was a real company, it just wasn't very good at making money from blockchain technology, and maybe wasn't trying very hard to do that.

Bitcoin as a medium of exchange seems like much the same thing. It isn't really being used as a medium of exchange on more than a hobbyist/enthusiast scale, and in some niche applications like ransomware. Ben Horowitz lost his bet with Felix Salmon because the idea that bitcoin transaction fees would be far lower than credit card merchant fees turned out to be totally wrong.

The question is how much sincerity there is to bitcoin as a medium of exchange. I have no doubt that there are many sincere enthusiasts dreaming of a government-free currency system who truly want it to be, and do their best to use it. But I think "medium of exchange" is just the plausible cover story for something that isn't really about being a medium of exchange at all. (And, yes, the repeated waves of innovations are just ways of refreshing that cover story. "OK, it wasn't a good medium of exchange before, but with Bitcoin Cash it will be." "OK, it wasn't a good medium of exchange before, but with Lightning Network it will be...")
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Re: Crypto bulls are back. Are you getting in?

Post by FireProof » Fri Apr 12, 2019 9:30 am

happyisland wrote:
Thu Apr 11, 2019 6:25 am
Nappyloxs wrote:
Wed Apr 10, 2019 10:46 pm
...the only crypto I would invest in is bitcoin. It is the only one I regularly see accepted online or in stores, plus it is finite...
I'm very curious about this. Have you ever seen bitcoin accepted in a brick and mortar store? If so, what store?
In Bergmannkiez (a neighborhood in Kreuzberg), a lot of stores accepted Bitcoin when I lived in Berlin - mostly places like bars and restaurants. But that was before the tremendous bubble in value - I don't know if rising mining/transactions costs have made that impractical.

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Re: Crypto bulls are back. Are you getting in?

Post by Pokerguy123 » Fri Apr 12, 2019 10:23 am

I'm invested in bitcoin, currently about 4% of my net worth. 2% that I'll re-balance annually, and the remainder held in a separate wallet that I will not be re-balancing. I think that it's easier to see the value in bitcoin when you use it day to day. It's completely changed my life, as an online poker player playing from the USA. Being at the mercy of the banks and payment processors used to be an absolute nightmare.

Here's some thoughts that allow me to stay the course with bitcoin:
1 - Grey markets (gambling), and dark markets (illegal activities) use cryptocurrency. They will never go back to an age where they do not use cryptocurrency. It would be like having the internet then deciding to go back in time and not use it anymore. They will also never stop running.
2 - People will always hoard / hide money (from govt, spouse, etc) and bitcoin offers a way to do that. There are a limited amount of coins and slowly supply and demand will increase the price. Longer into the future I think a significant amount of coins will even just be lost due to people losing keys, dying without leaving private keys to family members etc.
3. Bitcoin offers an asset that has little correlation to the stock market. It's good for diversification.
4. Bitcoin offers a global currency with fees under a USD to send and no funds lost to currency exchange.

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Re: Crypto bulls are back. Are you getting in?

Post by Pokerguy123 » Fri Apr 12, 2019 10:40 am

To add slightly more:

I don't see bitcoin ever being adopted for everyday payments or for anything that we can use a credit/debit card for. It doesn't need to be and that's not it's use case. In the same vein, cryptocurrency developed by the government, or a corporation would not be competition to Bitcoin. They would be used for completely different things.

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Re: Crypto bulls are back. Are you getting in?

Post by TomCat96 » Fri Apr 12, 2019 5:21 pm

I just don't see crypto payments being adopted any time soon.

After trying to take a closer look at its use cases, compared with more developed technologies, my conclusion is that at this time,
it's a complete mess.

Nisiprius is right about several things. Whether its a combination of fraud, market manipulation, or user error, loss of cryptocurrency in its entirety would is too easy. The use of it, too difficult. And assertions that it can be used for regular transactions seems to crumble at the slightest amount of investigation. Proponents of cryptos can't just throw out these objections as trifles.

From what I can tell, cryptocurrencies were borne out of the older internet subculture of the 90s, a subculture comprised of gamers, hacker/antiestablishment types, coders, and the relatively tech savvy. It was an RTFM subculture where you were either in the know, or you were an idiot. RTFM stands for "read the -f manual", and was a common response back in the day to legitimate inquiries.

And i see the same things going on with Cryptos. Can't figure out how to manage a wallet? You're an idiot. Did you send bitcoin to an ETH address? You're an idiot. The lack of responsiveness and attentiveness to legitimate issues completely stymies wider adoption. Did you park your money with the wrong crypto fund? you're an idiot.

I consider myself pretty tech savvy, and getting cryptos to work even to try it out is harrowing. Yes, there are easier ways to get things working I suppose--coinbase for example. But let's be real. Cryptos through coinbase undermines its primary use-case, which is a kind of privacy in your transactions.

Consider my experience with Mist. I've had countless issues with getting a basic ethereum wallet to work, for the blockchain to sync, for anything to occur. No I haven't read about Gas. No I don't know how Gas works, and whether or not it can be manipulated within the ETH world computer. But why should I have to? Oh what? I can't download the entire blockchain because the ETH blockchain exceeds a terrabyte and can't fit on my hard drive? Oh I can simply download the entire blockchain to a separate harddrive and use it like that, and reconnect hard drive number 2 just to access my ETH wallet? Sure that's convenient whenever I want to spend ETH.

What? After I got it to work I downloaded the wrong binary of MIST? It has spyware? Silly me, I should have either checked the MD5 hash of the binary or compiled the source code from github myself. Oh what? My version of docker isn't compatible for the source code compilation of the wallet? The compilation says I'm missing a few dependencies. I'm sure once I download the right dependencies I can properly compile my wallet, connect hard drive #2, a dedicated harddrive to store the entire ETH blockchain on it, and then wait to download and sync up the rest of the blockchain before I use it.

In the end, I didn't get it to work. And I'm perfectly willing to accept the proposition that I'm an idiot.
But to be perfectly frank, unless the crypto community actually wants to work towards widespread adoption, it's going to continue to remain niche.

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Re: Crypto bulls are back. Are you getting in?

Post by nisiprius » Fri Apr 12, 2019 5:45 pm

Pokerguy123 wrote:
Fri Apr 12, 2019 10:40 am
...I don't see bitcoin ever being adopted for everyday payments or for anything that we can use a credit/debit card for. It doesn't need to be and that's not its use case...
Bitcoin advocates, including Satoshi Nakamoto, explicitly said that was its use case, until it proved to be useless for that use.

It was explicitly billed as being suitable for "small casual transactions." The unsuitability of traditional trust-based systems for very small, casual transactions was one of the problems bitcoin was intended to solve.

My boldfacing:

"Bitcoin: A Peer-to-Peer Electronic Cash System"
In 2008, Satoshi Nakamoto wrote:...Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services.
The whole basis of Ben Horowitz's bet with Felix Salmon was Horowitz's belief--common in 2014 when the bet was made--that bitcoin would enjoy rapid widescale adoption by internet merchants because of having much lower transaction costs than credit cards.

In short, bitcoin advocates always said bitcoin was going to be much more usable for everyday payments, particularly small payments, than credit cards.
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Re: Crypto bulls are back. Are you getting in?

Post by NYCwriter » Fri Apr 12, 2019 7:33 pm

nisiprius wrote:
Fri Apr 12, 2019 5:45 pm
Pokerguy123 wrote:
Fri Apr 12, 2019 10:40 am
...I don't see bitcoin ever being adopted for everyday payments or for anything that we can use a credit/debit card for. It doesn't need to be and that's not its use case...
Bitcoin advocates, including Satoshi Nakamoto, explicitly said that was its use case, until it proved to be useless for that use.

It was explicitly billed as being suitable for "small casual transactions." The unsuitability of traditional trust-based systems for very small, casual transactions was one of the problems bitcoin was intended to solve.
This was more the case when it was first developed. But scalability is an issue. It's not especially efficient.

It can work as an alternative asset, but both of these involve some proven stability over time. The more regulation is involved, the safer an asset it becomes, but this also defeats a big part of BTC's purpose.

If I was younger, I'd keep a coin or two as a speculative asset. I chose not to be greedy and take money off the table.

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Re: Crypto bulls are back. Are you getting in?

Post by NYCwriter » Fri Apr 12, 2019 7:50 pm

Sandtrap wrote:
Fri Apr 12, 2019 9:14 am
The fees and costs are enormous. Buy, sell, exchange.
Did you calculate the actual gains (Net ROI) even if it seemed positive?
It's possible to avoid most of the fees by using certain exchanges. Coinbase has its own exchange, for example.
In my case, I only made 6 purchases and 3 sales over a 3-1/2 year period, and used cointracker to check calculations against my records.

Yes, people do trade in and out, and I don't think a lot of them are doing taxes on it. I prefer not to have that Damocles sword over my head. But I also think the IRS was late to the party (and only when they realized what a party it was) and should have offered some clarity earlier.

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Re: Crypto bulls are back. Are you getting in?

Post by JAFFX2 » Fri Apr 12, 2019 9:05 pm

Why not just buy Power ball tickets?

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Re: Crypto bulls are back. Are you getting in?

Post by Pokerguy123 » Fri Apr 12, 2019 10:25 pm

nisiprius wrote:
Fri Apr 12, 2019 5:45 pm
Pokerguy123 wrote:
Fri Apr 12, 2019 10:40 am
...I don't see bitcoin ever being adopted for everyday payments or for anything that we can use a credit/debit card for. It doesn't need to be and that's not its use case...
Bitcoin advocates, including Satoshi Nakamoto, explicitly said that was its use case, until it proved to be useless for that use.

It was explicitly billed as being suitable for "small casual transactions." The unsuitability of traditional trust-based systems for very small, casual transactions was one of the problems bitcoin was intended to solve.

My boldfacing:

"Bitcoin: A Peer-to-Peer Electronic Cash System"
In 2008, Satoshi Nakamoto wrote:...Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services.
The whole basis of Ben Horowitz's bet with Felix Salmon was Horowitz's belief--common in 2014 when the bet was made--that bitcoin would enjoy rapid widescale adoption by internet merchants because of having much lower transaction costs than credit cards.

In short, bitcoin advocates always said bitcoin was going to be much more usable for everyday payments, particularly small payments, than credit cards.
It really doesn’t matter what it was first intended to do or what satoshi said. I’m saying that the use cases that I listed are very strong use cases, and it doesn’t need more than those to be successful.

It doesn’t need to become a global payment system that we use when go to Starbucks and buy coffee, even if that was part of some grand plan at the beginning.

It’s revolutionary as a pseudonymous permission-less value transfer system. We don’t need that type of system for everyday payments.

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Re: Crypto bulls are back. Are you getting in?

Post by Mickey7 » Fri Apr 12, 2019 11:38 pm

Sounds great! Just start without me.

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Re: Crypto bulls are back. Are you getting in?

Post by sfnerd » Sat Apr 13, 2019 12:17 am

HawkeyePierce wrote:
Thu Apr 11, 2019 9:01 am
Note that retailers accepting Bitcoin aren't actually taking possession of Bitcoin in the majority of cases. They're using services like Bitpay or Coinbase Commerce to accept Bitcoin from customers but immediately convert it to regular currency (dollars, euros, whatever).

It's no different than a merchant listing prices in multiple (traditional) currencies. Joe's Bobbleheads Online isn't taking possession of euros and pounds and yen, he's just using a merchant account that lets his customers pay in their currency but converting all of that into his currency so he only has to handle dollars.

I wouldn't necessarily call that "bullish on Bitcoin" anymore than a merchant who accepts other foreign currencies is bullish on euros. Adding a new payment gateway is pretty trivial with most eCommerce platforms.

(I build online payment systems for a living)
Exactly correct. It is so simple to add payment options that it is incredible that people don't realize how useless Bitcoin is as a currency. Given that it only takes a week or less for a developer to integrate Bitcoin into an e-commerce platform, if it was worthwhile at all, it would be everywhere. I find it absolutely insane that people still buy Bitcoin and other non-asset-backed cryptocurrencies at all.

The only "value" is in the pseudo-anonymity that allows illicit transactions to occur (tax avoidance, drug trade, child exploitation, etc.). I want nothing to do with it, it's not sustainable or ethical. There are just no compelling legal use cases.

I am interested in what Facebook and other companies will do with their digital currencies. I also do work in digital payments, and there are a lot of rumors about cryptocurrencies backed by corporations and their assets. These may be interesting, though not really as an investment.

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Re: Crypto bulls are back. Are you getting in?

Post by sfnerd » Sat Apr 13, 2019 12:21 am

Pokerguy123 wrote:
Fri Apr 12, 2019 10:25 pm
nisiprius wrote:
Fri Apr 12, 2019 5:45 pm
Pokerguy123 wrote:
Fri Apr 12, 2019 10:40 am
...I don't see bitcoin ever being adopted for everyday payments or for anything that we can use a credit/debit card for. It doesn't need to be and that's not its use case...
Bitcoin advocates, including Satoshi Nakamoto, explicitly said that was its use case, until it proved to be useless for that use.

It was explicitly billed as being suitable for "small casual transactions." The unsuitability of traditional trust-based systems for very small, casual transactions was one of the problems bitcoin was intended to solve.

My boldfacing:

"Bitcoin: A Peer-to-Peer Electronic Cash System"
In 2008, Satoshi Nakamoto wrote:...Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services.
The whole basis of Ben Horowitz's bet with Felix Salmon was Horowitz's belief--common in 2014 when the bet was made--that bitcoin would enjoy rapid widescale adoption by internet merchants because of having much lower transaction costs than credit cards.

In short, bitcoin advocates always said bitcoin was going to be much more usable for everyday payments, particularly small payments, than credit cards.
It really doesn’t matter what it was first intended to do or what satoshi said. I’m saying that the use cases that I listed are very strong use cases, and it doesn’t need more than those to be successful.

It doesn’t need to become a global payment system that we use when go to Starbucks and buy coffee, even if that was part of some grand plan at the beginning.

It’s revolutionary as a pseudonymous permission-less value transfer system. We don’t need that type of system for everyday payments.
Who needs this, other than drug dealers, pedophiles, and other criminals? There are very few legitimate use cases. Even if you find one, cash is probably a better fit anyway, as bitcoin and other cryptocurrencies are only really anonymous if you don't transfer in and out of fiat money.

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Re: Crypto bulls are back. Are you getting in?

Post by StormShadow » Sat Apr 13, 2019 12:30 am

newtothiswhat wrote:
Tue Apr 09, 2019 9:16 pm
I know this forum discourages investing in crypto and views it as rat poison.
Bingo, so why bring it up in this forum?

Oh, I get it... because THIS time its different. :oops:

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Re: Crypto bulls are back. Are you getting in?

Post by Pokerguy123 » Sat Apr 13, 2019 11:34 am

sfnerd wrote:
Sat Apr 13, 2019 12:21 am

Who needs this, other than drug dealers, pedophiles, and other criminals? There are very few legitimate use cases. Even if you find one, cash is probably a better fit anyway, as bitcoin and other cryptocurrencies are only really anonymous if you don't transfer in and out of fiat money.
You don't need to be a criminal to want to privacy. For most transactions, the amount of privacy that bitcoin offers is enough.

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Re: Crypto bulls are back. Are you getting in?

Post by TropikThunder » Sat Apr 13, 2019 11:45 pm

Pokerguy123 wrote:
Sat Apr 13, 2019 11:34 am
sfnerd wrote:
Sat Apr 13, 2019 12:21 am

Who needs this, other than drug dealers, pedophiles, and other criminals? There are very few legitimate use cases. Even if you find one, cash is probably a better fit anyway, as bitcoin and other cryptocurrencies are only really anonymous if you don't transfer in and out of fiat money.
You don't need to be a criminal to want to privacy. For most transactions, the amount of privacy that bitcoin offers is enough.
So which is it, an investment or a currency? Because what would make it a good investment would make it a horrible currency and vice versa. If its destiny is, as you suggest, a currency for gray area (legal) transactions where privacy is paramount, then its volatility is a huge problem. Are your poker buy-ins listed in $ or in BTC? Because if the exchange rate fluctuates so much that it makes a difference what day you transact (or even what time of day), that is not sustainable. And if the exchange rate stabilized so as to give confidence and reproducibility to users, how will an investor ever make money? Where’s the greater fool for something that never changes in value? :P

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Re: Crypto bulls are back. Are you getting in?

Post by TomCat96 » Sun Apr 14, 2019 1:12 am

Strayshot wrote:
Thu Apr 11, 2019 7:10 am
GoldenFinch wrote:
Thu Apr 11, 2019 6:58 am
Strayshot wrote:
Thu Apr 11, 2019 6:42 am
Me personally, I’m getting back into tulips instead of crypto. It has been a few centuries of a lull, but I really feel like the tulip bulls are back and have seen prices going up a couple cents here and there so there is definitely some movement. In fact, I saw a neighbor plant some fresh bulbs just yesterday which is more than enough of a cue to get back in.
I have found tulips to be a bad investment. They bloom for one year and don’t come up the next year. Chipmunks (I think) dig up the bulbs and eat them.
Ah, you haven’t been keeping up on the technology! There is a new bioengineered tulip that uses a technology called tulipchain, which guarantees that the tulip bulb will clone and come up year after year so that you will never lose the initial value of your tulip purchase. In addition, each year the flower modifies its coloring to become even more complex and beautiful. I suggest buying in now before the market really skyrockets. With these new tulips, the seeds take longer and longer to grow over each tulip generation which makes the next tulip batch harder to acquire, so I feel like tulip mining will be really profitable in the beginning and those that get in early have the most to gain.
Pokerguy123 wrote:
Sat Apr 13, 2019 11:34 am
sfnerd wrote:
Sat Apr 13, 2019 12:21 am

Who needs this, other than drug dealers, pedophiles, and other criminals? There are very few legitimate use cases. Even if you find one, cash is probably a better fit anyway, as bitcoin and other cryptocurrencies are only really anonymous if you don't transfer in and out of fiat money.
You don't need to be a criminal to want to privacy. For most transactions, the amount of privacy that bitcoin offers is enough.

Commenting because I want to reconcile a few things after doing fairly extensive research on bitcoin. Whatever the merits of bitcoin are, it's not a tulip, but it's no investment either--and it's not a currency in any traditional sense of the word. A cryptocurrency is really the definition of something new. Trying to pigeon-hole it into Tulip, Investment, or Currency is like trying to fit a round peg into a square hole. There's no need for it. We can accept it for what it is.

I think the more charitable use case for what a crypto is --not what it aspires to be--but what it actually is right now at this moment, is a method of transacting, inefficiently, through a medium that is private. How private? So private that in theory, the transaction can be 100% untrackable. (you must use something other than bitcoin overtly to do this)

If you follow the online forums, just like the bogleheads have a particular psychology, so too do crypto adherents have their own psychology. I'm sure some of them deal in illicit activity, but there are many many of them that have an anti-government, anti-establishment, conspiracy theory minded slant. Just watch some of their youtube channels. Obviously I'm not here to comment on that. What I am here to comment on is where the value of crypto-currencies derives from. Wheres the faith?

The faith interestingly comes from a lack of faith, in the system, a lack of faith in government and institutions. On bogleheads, we've seen this mania already many times. Why do people consistently believe the sky is about to fall in the stock markets, why do people push gold, why do people constantly push ideas of recession, etc. It's a kind of anti-faith. Faith in the failure of the system--faith because the belief exceeds evidence the system/market is about to collapse.

The value of cryptocurrencies, illicit purposes aside, derives from a faith in the failing of the system. Nisiprius pointed out one of the central ideas of the early uses cases was that transaction friction would be so great, that transacting with bitcoin would be cheaper.

It makes sense too, if you think the banks are out to get you so that they'll impose all kinds of intermediate surcharges, if you think government laws are inefficient making movement of money across borders inefficient, therein lies the value for cryptos, at the cost of ridiculous amounts of volatility and risk and total loss due to fraud. The value of crypto-currencies then is derived from costs imposed by governments and institutions, including the lack of faith by those governments and institutions.

In extreme cases like Venezuela, where the hyperinflation is in fact significantly higher than even the ridiculous volatility of bitcoin, there is some value to be had. see this article from the New York Times "Bitcoin Has Saved My Family"
https://www.nytimes.com/2019/02/23/opin ... ncies.html


For these reasons, I don't think cryptos will ever die. But I'm not sure they will or can ever take off.

Let's look at a legitimate use case. I want to buy a cup of coffee from starbucks.
There is nothing complex about that transaction technologically. Debit the cost of the coffee from me, Credit Starbucks. It can be done with a simple database. One computer. Yes you can increase the number of computers for redundancy, and atomicity of the transactions.

But compare it with bitcoin. Instead of using one database, you literally have to propagate the transaction through every node on the bitcoin network. That cannot possibly scale. Bitcoin uses a distributed blockchain ledger, established through consensus. How can it be that every time I buy a coffee, you need to update every single ledger on the network? What's more, every node needs a copy of the entire ledger---every single transaction that ever took place. In my prior comment I wrote that in trying to get a basic ethereum wallet to work, I found I could not because at this point the ethereum ledger has grown to exceed a terabyte.

It would be like if Visa decided that every single computer in the Visa financial network has to have the entire copy of the entire ledger of transactions that have ever taken place, and that with each new subsequent transaction, the update has to be propagated to every node. That's not hyperbole. That is in fact the technology.

Every node on the ethereum network needs a copy of a file that is already over a terabyte in size.
From a technological perspective, what this means is that idea that bitcoin has a use case in everyday transactions is for all intents and purposes impossible. It is significantly more inefficient than existing methods, and will forever be significantly more inefficient. There's just no two ways about this. Whether you want to use a tangle, a DAG, a lightning network, or some form of reconciled segregated witness, you're always going to be far more inefficient than an ordinary centralized network.

Which goes back to what I said before. The value of crypto derives not from trust, but a lack of trust. In a world where truly (and I mean truly truly) you can't trust anyone, it has value. But in a world where trust is reasonable, its value is minimal.

That is about as charitable as an interpretation I can give to the crypto cause at this time.

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Re: Crypto bulls are back. Are you getting in?

Post by DonIce » Sun Apr 14, 2019 1:47 am

TomCat96 wrote:
Sun Apr 14, 2019 1:12 am
The faith interestingly comes from a lack of faith, in the system, a lack of faith in government and institutions. On bogleheads, we've seen this mania already many times. Why do people consistently believe the sky is about to fall in the stock markets, why do people push gold, why do people constantly push ideas of recession, etc. It's a kind of anti-faith. Faith in the failure of the system--faith because the belief exceeds evidence the system/market is about to collapse.

The value of cryptocurrencies, illicit purposes aside, derives from a faith in the failing of the system. Nisiprius pointed out one of the central ideas of the early uses cases was that transaction friction would be so great, that transacting with bitcoin would be cheaper.

It makes sense too, if you think the banks are out to get you so that they'll impose all kinds of intermediate surcharges, if you think government laws are inefficient making movement of money across borders inefficient, therein lies the value for cryptos, at the cost of ridiculous amounts of volatility and risk and total loss due to fraud. The value of crypto-currencies then is derived from costs imposed by governments and institutions, including the lack of faith by those governments and institutions.
....

Which goes back to what I said before. The value of crypto derives not from trust, but a lack of trust. In a world where truly (and I mean truly truly) you can't trust anyone, it has value. But in a world where trust is reasonable, its value is minimal.
I spent some time on the bitcoin forums back in the day (and had a few bitcoins back when they were super cheap, sold them at $500 unfortunately). I would say this analysis of the psychology of the "cryptoheads" is pretty much spot on. Bitcoin is a solution to the problem of a world where every transaction, every asset, every institution, is a scam waiting to happen. Its value derives from the fact that the blockchain is consensus driven (all the nodes have to agree) rather than centrally controlled. Bitcoin is itself very prone to scamming, but people that are very careful and exact about how they use it can prevent being scammed or losing coins.

I think a big part of the background of the bitcoin community arises from online gaming culture, as well. Online games typically contain in-game currencies of various kinds, and in-game economies often leave the doors wide open to players scamming each other, sometimes as an oversight of the developers and sometimes on purpose to create that kind of atmosphere in the in-game universe. If you go read the forums for a game like EVE online, for example, you'll see almost the same outlook towards the in-game economy as crypto people have towards the real world economy.

The problem underlying bitcoin is that its a currency built for a world with zero trust, but it fundamentally runs on technology (computers, internet) that requires a society built on trust to create and operate.

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Re: Crypto bulls are back. Are you getting in?

Post by sfnerd » Sun Apr 14, 2019 2:16 am

Pokerguy123 wrote:
Sat Apr 13, 2019 11:34 am
sfnerd wrote:
Sat Apr 13, 2019 12:21 am

Who needs this, other than drug dealers, pedophiles, and other criminals? There are very few legitimate use cases. Even if you find one, cash is probably a better fit anyway, as bitcoin and other cryptocurrencies are only really anonymous if you don't transfer in and out of fiat money.
You don't need to be a criminal to want to privacy. For most transactions, the amount of privacy that bitcoin offers is enough.
Actually, you get less privacy than cash if you follow the law. With cryptocurrencies you legally must report your sales to the government in the US, since it is an asset. You don't need to do that with cash.

dumbmoney
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Re: Crypto bulls are back. Are you getting in?

Post by dumbmoney » Sun Apr 14, 2019 4:22 am

nisiprius wrote:
Thu Apr 11, 2019 10:00 am
avbferry wrote:
Thu Apr 11, 2019 9:50 am
Well if you do get in, be mindful about protecting your cryptocurrency. I know some people who have lost a lot cause they misplaced their key phrase that grants them access to their funds.
It's not just "some people." It's staggering. The stated numbers vary, reliability is unclear, and some of the stories are by entities with vested interests, but it appears that something like 20% of all bitcoin mined has been lost. Of course, some proportion of that may have been lost by people who made tiny experimental purchases years ago just to see how it was done, and didn't take care of it because the value was so small, but still. 20%?

I wonder what percentage of all gold ever mined has been lost. Doubloons in Spanish galleons at the bottom of the sea, pirate treasure buried and the map lost...
You might find this interesting:
http://jpkoning.blogspot.com/2013/01/mu ... -bank.html

Based on the Euro conversion experience, it seems normally about 1% of currency is lost. (That's 1% value, so the % of physical coins/notes lost is higher).
I am pleased to report that the invisible forces of destruction have been unmasked, marking a turning point chapter when the fraudulent and speculative winds are cast into the inferno of extinction.

Steven in NC
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Re: Crypto bulls are back. Are you getting in?

Post by Steven in NC » Sun Apr 14, 2019 7:00 am

I have 30 Etherium "coins" and will add to it on any dips below $100. My opinion is I will give it to my kids/grandkids one day if it lives up to the hype.

beastykato
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Re: Crypto bulls are back. Are you getting in?

Post by beastykato » Mon Apr 15, 2019 3:35 am

So many naysayers.

I'm not sure what will end up happening and if crypto will pan out, butI most definitely do own some.

People are making fun of the huge drop in value, but that was a very narrow time frame. If you purchased Bitcoin at almost any other point than that huge run up you are still positive to this day. My initial entry at $2500 is still double that today.

I also made over $15000 mining the coins and made even more on top selling my hardware at the end of the run before prices really tanked. I was able to write much of it off as a business expense and reported it all as your supposed to on my taxes.

People can make whatever tulip jokes they want. Fact is my crypto still holds value and I made a lot converting it to fiat mining and as capital gains. For roughly 6 months my computers were literally printing money....

Valuethinker
Posts: 37588
Joined: Fri May 11, 2007 11:07 am

Re: Crypto bulls are back. Are you getting in?

Post by Valuethinker » Mon Apr 15, 2019 4:45 am

TomCat96 wrote:
Sun Apr 14, 2019 1:12 am
Strayshot wrote:
Thu Apr 11, 2019 7:10 am
GoldenFinch wrote:
Thu Apr 11, 2019 6:58 am
Strayshot wrote:
Thu Apr 11, 2019 6:42 am
Me personally, I’m getting back into tulips instead of crypto. It has been a few centuries of a lull, but I really feel like the tulip bulls are back and have seen prices going up a couple cents here and there so there is definitely some movement. In fact, I saw a neighbor plant some fresh bulbs just yesterday which is more than enough of a cue to get back in.
I have found tulips to be a bad investment. They bloom for one year and don’t come up the next year. Chipmunks (I think) dig up the bulbs and eat them.
Ah, you haven’t been keeping up on the technology! There is a new bioengineered tulip that uses a technology called tulipchain, which guarantees that the tulip bulb will clone and come up year after year so that you will never lose the initial value of your tulip purchase. In addition, each year the flower modifies its coloring to become even more complex and beautiful. I suggest buying in now before the market really skyrockets. With these new tulips, the seeds take longer and longer to grow over each tulip generation which makes the next tulip batch harder to acquire, so I feel like tulip mining will be really profitable in the beginning and those that get in early have the most to gain.
Pokerguy123 wrote:
Sat Apr 13, 2019 11:34 am
sfnerd wrote:
Sat Apr 13, 2019 12:21 am

Who needs this, other than drug dealers, pedophiles, and other criminals? There are very few legitimate use cases. Even if you find one, cash is probably a better fit anyway, as bitcoin and other cryptocurrencies are only really anonymous if you don't transfer in and out of fiat money.
You don't need to be a criminal to want to privacy. For most transactions, the amount of privacy that bitcoin offers is enough.

Commenting because I want to reconcile a few things after doing fairly extensive research on bitcoin. Whatever the merits of bitcoin are, it's not a tulip, but it's no investment either--and it's not a currency in any traditional sense of the word. A cryptocurrency is really the definition of something new. Trying to pigeon-hole it into Tulip, Investment, or Currency is like trying to fit a round peg into a square hole. There's no need for it. We can accept it for what it is.

I think the more charitable use case for what a crypto is --not what it aspires to be--but what it actually is right now at this moment, is a method of transacting, inefficiently, through a medium that is private. How private? So private that in theory, the transaction can be 100% untrackable. (you must use something other than bitcoin overtly to do this)

If you follow the online forums, just like the bogleheads have a particular psychology, so too do crypto adherents have their own psychology. I'm sure some of them deal in illicit activity, but there are many many of them that have an anti-government, anti-establishment, conspiracy theory minded slant. Just watch some of their youtube channels. Obviously I'm not here to comment on that. What I am here to comment on is where the value of crypto-currencies derives from. Wheres the faith?

The faith interestingly comes from a lack of faith, in the system, a lack of faith in government and institutions. On bogleheads, we've seen this mania already many times. Why do people consistently believe the sky is about to fall in the stock markets, why do people push gold, why do people constantly push ideas of recession, etc. It's a kind of anti-faith. Faith in the failure of the system--faith because the belief exceeds evidence the system/market is about to collapse.

The value of cryptocurrencies, illicit purposes aside, derives from a faith in the failing of the system. Nisiprius pointed out one of the central ideas of the early uses cases was that transaction friction would be so great, that transacting with bitcoin would be cheaper.

It makes sense too, if you think the banks are out to get you so that they'll impose all kinds of intermediate surcharges, if you think government laws are inefficient making movement of money across borders inefficient, therein lies the value for cryptos, at the cost of ridiculous amounts of volatility and risk and total loss due to fraud. The value of crypto-currencies then is derived from costs imposed by governments and institutions, including the lack of faith by those governments and institutions.

In extreme cases like Venezuela, where the hyperinflation is in fact significantly higher than even the ridiculous volatility of bitcoin, there is some value to be had. see this article from the New York Times "Bitcoin Has Saved My Family"
https://www.nytimes.com/2019/02/23/opin ... ncies.html


For these reasons, I don't think cryptos will ever die. But I'm not sure they will or can ever take off.

Let's look at a legitimate use case. I want to buy a cup of coffee from starbucks.
There is nothing complex about that transaction technologically. Debit the cost of the coffee from me, Credit Starbucks. It can be done with a simple database. One computer. Yes you can increase the number of computers for redundancy, and atomicity of the transactions.

But compare it with bitcoin. Instead of using one database, you literally have to propagate the transaction through every node on the bitcoin network. That cannot possibly scale. Bitcoin uses a distributed blockchain ledger, established through consensus. How can it be that every time I buy a coffee, you need to update every single ledger on the network? What's more, every node needs a copy of the entire ledger---every single transaction that ever took place. In my prior comment I wrote that in trying to get a basic ethereum wallet to work, I found I could not because at this point the ethereum ledger has grown to exceed a terabyte.

It would be like if Visa decided that every single computer in the Visa financial network has to have the entire copy of the entire ledger of transactions that have ever taken place, and that with each new subsequent transaction, the update has to be propagated to every node. That's not hyperbole. That is in fact the technology.

Every node on the ethereum network needs a copy of a file that is already over a terabyte in size.
From a technological perspective, what this means is that idea that bitcoin has a use case in everyday transactions is for all intents and purposes impossible. It is significantly more inefficient than existing methods, and will forever be significantly more inefficient. There's just no two ways about this. Whether you want to use a tangle, a DAG, a lightning network, or some form of reconciled segregated witness, you're always going to be far more inefficient than an ordinary centralized netwo

rk.

Which goes back to what I said before. The value of crypto derives not from trust, but a lack of trust. In a world where truly (and I mean truly truly) you can't trust anyone, it has value. But in a world where trust is reasonable, its value is minimal.

That is about as charitable as an interpretation I can give to the crypto cause at this time.
Nice analysis.

Thank you.

I think the analogy with Dutch tulips comes from the inadequacy of this as an "investment".

The ICOs themselves came as close as I can imagine to a South Sea Bubble type scenario - shares in something of no determinable value.

The bitcoin industry seems wide open for price manipulation and "pump and dump" -- there seems to be a consensus that that is what happened with the $20k price (end of 2017?). It reminds me of OTC stocks in that way - Vancouver Stock Exchange.

We used to say there were 2 ways of investing in VSE:

1. get a broker, open an account, buy stocks

2. take money, cover in lighter fluid, light a match

z3r0c00l
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Re: Crypto bulls are back. Are you getting in?

Post by z3r0c00l » Mon Apr 15, 2019 6:54 am

Just wait for Amazon and Amex coin!

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