Investing

[AlexRich]

As Bill Gates wealth is greater than the entire value of all Bitcoin you can be sure he’s not an investor ... it’s a scam.

[freeman01]

9 minutes ago, Why Me said:

So where does bitcoin derive its value? There's no government or asset behind it (which is claimed to be a good thing). Seems to me that it's kind of like artwork, which is worth as much or little as people care to bid.

 

I would love to know the answer.

If I may ask, when I say mention the following about bitcoin earlier, what do you make of this ? how do you interpret that ?

 

Quote

Well the value of bitcoin is derived from its fundamental properties :

- open source

- decentralized

- censorship-resistant

- borderless

- peer to peer

 

Bitcoin literally cannot be stopped or controlled by anyone or any government, and everyone can use it without any discrimination whatsoever.

it takes 12 to 24 words to memorize to secure your bitcoin account and you can cross any border with your bitcoin without being stolen by anyone, try to do that with cash or gold or anything else ...

 

Bitcoin is now 10 years old, with no history of it being hacked, yet it is worth billions so the incentive for hackers is gigantic.

 

Add to that a fix monetary policy, the amount of bitcoin being created is set to be cut in half every 4 years for a total of 24 millions bitcoins maximum in the year 2140.

Opposed to that the US dollars whose money supply keep increasing like candy, guess where this is going ?

 

[sanemax]

2 hours ago, freeman01 said:

 

who do you think has time to read that kind of monstrous wall of text ?

You should find the time to read what he posted , it is quite informative and fair .

Fair as in hes not invested in bitcoin and doesn't needs everyone else to invest in it as well, to make himself a profit 

[pookondee]

IMO cryptos could start to at least "mimic" a real currency if the concept of fair interest rates for both investors and borrowers is applied, the same as banks used to do.

 

Eventually it could be used to for short term personal loans or even eventually to buy real estate.

 

Folks with money are now just suckers, letting banks and governments steal our deposits to fund more debt.

 

And of course banks are happy to pay investors 0%,

they will still even make money collecting X% on loans when they eventually force the savings rates into negative territory.

Yet at the same time the personal credit card debt/short term loan rate is all time high up near 30%.???

how does that work??

 

Surely Its got to be a matter of time before people wake up to what is going on.

 

Either get 0% for the banks using your money 

OR

Get forced into looking at higher risk investing for a decent return.

 

Then there is the issue of having your superannuation decimated in the next banking/stock market/scam/crash.

 

If Crypos develop a fair system for both investors and borrowers they could take business away from banks.

 

And why the need for cryptos to be backed up with anything anyway???, if you consider banks are lending out money that doesnt really exist and governments are in a race to print money 24x7.

 

[Why Me]

3 hours ago, freeman01 said:

If I may ask, when I say mention the following about bitcoin earlier, what do you make of this ? how do you interpret that ?

 

Quote

Well the value of bitcoin is derived from its fundamental properties :

- open source

- decentralized

- censorship-resistant

- borderless

- peer to peer

What do these attributes have to do with the intrinsic value of a currency? All of them could (possibly) be applied to an app on my phone.

 

Look, I am not arguing that a bitcoin has value. It obviously does as there is a market. But I want to know how the value is assigned. Based purely on bidding like for a work of art or something else?

[freeman01]

3 hours ago, sanemax said:

You should find the time to read what he posted , it is quite informative and fair .

Fair as in hes not invested in bitcoin and doesn't needs everyone else to invest in it as well, to make himself a profit 

I don't doubt that, the guy seems well educated and knowledgeable, but I have had my share of reading about bitcoin both ways. From the beginning he has clearly demonstrated his one sided view on the topic, according to that kind of person bitcoin is a scam and there is no controversy ...

Well bitcoin is now 10 years old with a market cap valued well over 150 Billions USD and a daily volume around 50 Billions USD.

From that fact alone If there is at least something that is certain it is that THERE IS a controversy and discussions to be had, anyone pretending there is not is either very young and naive or an idiot.

 

While I like to highlight the good part of it, I do not deny the existing issues and eventual pitfall, hence the high risk / high reward situation.

 

And Bitcoin is way past the point of being labelled a ponzi scheme, those who pretend the opposite could as well label the whole financial market today as a ponzi scheme.

A ponzi scheme is something that is not sustainable and will leave most of everyone empty handed except a few at the top who would have sold first, well Bitcoin is absolutely sustainable long term and has as much chance of collapsing as the internet.

[freeman01]

1 hour ago, Why Me said:

What do these attributes have to do with the intrinsic value of a currency? All of them could (possibly) be applied to an app on my phone.

Ok well that's where there is a misunderstanding, there is almost nothing else that displays all those properties together. Spend a bit of time on this and you'll realized it is a pretty big deal, remember we are talking about currency here, there is no precedent in history.

 

Now the actual value is determine the exact same way the value of gold is, except the market cap of gold is in the trillions and bitcoin in billions hence the current volatility. There is supply and demand in bitcoin, there is actual use case and there is speculation.

 

[Tayaout]

It's not a Hoax. It's the future of money, decentralized finance and smart contract. However there is a lot of scammer that use it to part fool of their money. If you are interested to invest in it you will need to spend a lot of time to understand what it is and how it works. Always keep control of your privates keys and trust no one. Buy a hardware wallet. 

 

Here is a good introduction but keep in mind Bitcoin is only one facet and there is a lot more possibilities behind developed. 

https://www.youtube.com/user/aantonop

 

After Bitcoin the most interesting is Ethereum and the smart contracts that it enables. 

[Tayaout]

On 2/21/2020 at 10:16 AM, digibum said:

 

It's funny because when OP first posted that, I thought, "That doesn't sound like Bill Gates" but assumed OP might have read something and gave him the benefit of the doubt. 

He doesn't know what he is talking about. There is more than one easy to short bitcoin and at least one way in the US that is regulated and it's called https://www.bakkt.com

 

The truth is that it has been the best performing asset since it's creation and you need to be a fool to short it. The average return per year is 390% since 2009.

 

These are the price on 31 October of each year aka bitcoin birthday. 

Edited February 24, 2020 by Tayaout

[Tayaout]

On 2/22/2020 at 8:28 PM, baansgr said:

The Bitcoin boat sailed a few years ago.....some made shedloads in a few months, millions more lost and are still in debt to this day...leave well alone.

Ah yeah I was told the same thing in 2012 when I got in. 

[Tayaout]

Basically bitcoin and cryptocurrencies can be very difficult to understand and peoples fear what they don't understand. It's also a good opportunity for scammer to steal money from those who don't understand what they are doing or are greedy. 

 

At the minimum learn to use a hardware wallet and why it's fundamental to stay in control of the private keys (don't leave your cryptocurrencies on a website).

 

Don't invest more than you are willing to lose like you would on the (penny) stock market.

 

Dollar-cost averaging is probably the best strategy for most. 

 

Be patient and don't use leverage. 

Edited February 24, 2020 by Tayaout

[gargamon]

On 2/20/2020 at 10:50 AM, JimmyTheMook said:

 

Surely not Warren Buffets approach.

Warren Buffett has called Bitcoin (the first and largest cryptocurrency) as "probably rat poison squared" and a "delusion." He has also stated that he would "not be surprised if it's not around in 10 or 20 years." His business partner and Berkshire Hathaway's vice-chair has called Bitcoin "worthless, artificial gold."

https://www.google.com/url?q=https://www.investopedia.com/crypto-founder-wins-auction-for-lunch-with-crypto-skeptic-warren-buffett-4689303&sa=Uved=2ahUKEwj20dPTOjnAhXdyzgGHabdAJEQFnoECAUQAg&usg=AOvVaw1MaF_6-lJ7pvD3Oac_JusP

 

Warren Buffett's Advice on Choosing an Index Fund

GuruFocus.com

October 22, 2019, 10:57 PM GMT+7

Warren Buffett (Trades, Portfolio) has advocated index funds as an investment for many years.

He believes that most investors would be better off buying index funds rather than single stocks because, over the long-term, individual investors tend to be pretty bad at picking stocks.

[digibum]

9 hours ago, freeman01 said:

well next time maybe try that without getting personal and trying to pick up a fight or whatever that is ? maybe ?

I am just a single individual investor trying to make money and discussing investment online in an open and peaceful way, not some kind of zealot trying to convert non believers as you have been portraying me.

 

Whether or not you realize it, the words you chose and the (often false) statements you make, make you sound like a zealot.  I have not become personal other than to say that you should quit posting BS that is easily proven to be false. 

 

Quote

who do you think has time to read that kind of monstrous wall of text ?

 

People that have obviously spent a lot of time reading about the benefits of Bitcoin but have never seen cogent arguments against Bitcoin. 

 

Quote

 

Now this kind of beg the question, why does one as to put so much effort and energy to go against bitcoin and crypto in general ? This is typically what one do to hold onto a belief.

if anything that gets me more confident than ever in my investment in bitcoin. What I highlighted earlier about bitcoin wasn't an opinion but actual facts.

 

 

Great.  I'm not trying to save you.  I'm trying to help others.  When you post something that is untrue and try to get people to put their hard earned money into it, I think they should see the other side of the argument. 

 

[Vacuum]

On 2/20/2020 at 8:04 AM, digibum said:

Cryptocurrencies are not investments.  They're speculation. 

AKA gambling.

[WorriedNoodle]

On 2/20/2020 at 10:23 AM, biplanebluey said:

I have been reading an article about ..this new Bitcoin thing.

Bitcoin has been around since 2008.

[digibum]

8 hours ago, Airalee said:

Ummm...where to begin.  First, I want to thank you for explaining (in all your previous posts) so rationally and simply what I have wanted (needed?) to hear for so long.  I have had people try to get me to buy bitcoin but when I tell them that I don’t understand it (I don’t have the smarts to even understand the concept of blockchain) and am not interested, the insults start.  It just seems kinda fishy the way it’s touted.
 

If you don’t mind...I’d like to further delve into the subject of investing vs speculation.  I do have a BS in Economics but frankly...I find it to be fairly worthless.

 

You mentioned gold.  I do own some, but I don’t see it as an investment or as speculation.  It was purely an emotional purchase based on someone’s recommendation who I considered to be one of those crazy genius types.  I bought it after selling my house in 2005 when I saw what was coming down the line due to all the Neg-am liars loans (stated income).  However....I can’t even understand my own rationale for owning it (don’t have any plans to sell) beyond thinking “if it’s good enough for central banks to hoard, maybe I should have some too”.

 

I guess I don’t really have any specific question, but would rather just hear your general opinion with regards to it.

 

Thanks again.

 

First off, I'm not a big "investor" per se.  I once worked in the securities industry and held a license to trade but that was 30 years ago.  I was not involved in gold or commodities though. 

 

Personally, for the last decade or so I've been doing mostly real estate or mortgage based deals.  In other words buying distressed real estate, renovating, and reselling.  On mortgages, we would buy non-performing mortgage loans from banks and try to get the buyer to restructure the loan and start making payments again or foreclose on the property and sell it. 

 

Gold, is a hedge against inflation.  Gold is also where people park money when the stock market is too risky. 

 

Personally, I've just never had that much interest in gold.  I've always tried to find an other asset class (i.e. real estate) that can produce returns.  Sorry, I'm not that much help on this one. 

[digibum]

7 hours ago, Why Me said:

So where does bitcoin derive its value? There's no government or asset behind it (which is claimed to be a good thing). Seems to me that it's kind of like artwork, which is worth as much or little as people care to bid.

 

I would love to know the answer.

 

There is no value.  A lot of people try to equate the value of Bitcoin to the value of the USD.  The common argument is that the paper is worthless since it's no longer backed by gold.  So they say that Bitcoin and the USD are equal in that regard. 

 

However, I can take a USD almost anywhere in the world and either exchange it for local currency very easily or just directly use it to buy goods and services.  Enough other people in the world agree on the value of a USD that it is almost universally accepted as a method of payment. 

 

The thing Bitcoin advocates are trying to imply is that Bitcoin has this same level of worldwide agreement.  But that's just comical.  While you can find people willing to exchange Bitcoin for fiat currency, you can't walk into most banks with Bitcoin.  You can't pay for your dinner at most restaurants with Bitcoin.  You can only move Bitcoin to fiat by trading it with other people that agree that Bitcoin has any value whatsoever. 

 

So, the whole argument that because both trade on some faith and credit of something, that Bitcoin and the USD are the same is a false comparison.  It's like saying that Beanie Babies and the USD are the same thing. 

 

And that is kind of what the underlying value of Bitcoin is, it's like Beanie Babies or Basebcall cards.  A very small number of people have decided to confer value on this digital thing and they are willing to exchange a Willie Mays Rookie card for a certain amount of fiat currency. 

 

Ironically, a Willie Mays baseball card is far, far, far more stable than Bitcoin which is pretty good indication that even within the people that own/trade Bitcoin there is not a lot of consensus on what the value of Bitcoin actually is.  For something to run from $2,000 - $20,000 and then back to $7,000 in the span of a few months, says that people have no idea what the value is. 

 

[Tayaout]

17 minutes ago, digibum said:

 

There is no value.  A lot of people try to equate the value of Bitcoin to the value of the USD.  The common argument is that the paper is worthless since it's no longer backed by gold.  So they say that Bitcoin and the USD are equal in that regard. 

 

However, I can take a USD almost anywhere in the world and either exchange it for local currency very easily or just directly use it to buy goods and services.  Enough other people in the world agree on the value of a USD that it is almost universally accepted as a method of payment. 

 

The thing Bitcoin advocates are trying to imply is that Bitcoin has this same level of worldwide agreement.  But that's just comical.  While you can find people willing to exchange Bitcoin for fiat currency, you can't walk into most banks with Bitcoin.  You can't pay for your dinner at most restaurants with Bitcoin.  You can only move Bitcoin to fiat by trading it with other people that agree that Bitcoin has any value whatsoever. 

 

So, the whole argument that because both trade on some faith and credit of something, that Bitcoin and the USD are the same is a false comparison.  It's like saying that Beanie Babies and the USD are the same thing. 

 

And that is kind of what the underlying value of Bitcoin is, it's like Beanie Babies or Basebcall cards.  A very small number of people have decided to confer value on this digital thing and they are willing to exchange a Willie Mays Rookie card for a certain amount of fiat currency. 

 

Ironically, a Willie Mays baseball card is far, far, far more stable than Bitcoin which is pretty good indication that even within the people that own/trade Bitcoin there is not a lot of consensus on what the value of Bitcoin actually is.  For something to run from $2,000 - $20,000 and then back to $7,000 in the span of a few months, says that people have no idea what the value is. 

 

Bitcoin derive it's value from it's fungibility, security and it's censorship resistant nature. I paid plenty of restaurants with bitcoin but never with gold yet gold still has value. 

[manchega]

Bitcoin was new in 2008 or so, now it is just accepted. It would be a great idea to keep a currency out of the hands of governments, alas it will not happen.

 

[Tayaout]

About the bitcoin tps issue: https://www.forbes.com/sites/jonathanchester/2018/06/18/your-guide-on-the-lightning-network-the-opportunities-and-the-issues/#527a58a53677

 

About Ethereum 2 upgrade:

 

On the issue of volatility, nowadays I keep my speculative investments in crypto and my budget in stable coin like DAI, USDT or USDC which are pegged to USD and can be cashed out instantly to in THB in my bank account. 

Edited February 24, 2020 by Tayaout

[digibum]

2 hours ago, freeman01 said:

I don't doubt that, the guy seems well educated and knowledgeable, but I have had my share of reading about bitcoin both ways. From the beginning he has clearly demonstrated his one sided view on the topic, according to that kind of person bitcoin is a scam and there is no controversy ...

Well bitcoin is now 10 years old with a market cap valued well over 150 Billions USD and a daily volume around 50 Billions USD.

From that fact alone If there is at least something that is certain it is that THERE IS a controversy and discussions to be had, anyone pretending there is not is either very young and naive or an idiot.

 

While I like to highlight the good part of it, I do not deny the existing issues and eventual pitfall, hence the high risk / high reward situation.

 

And Bitcoin is way past the point of being labelled a ponzi scheme, those who pretend the opposite could as well label the whole financial market today as a ponzi scheme.

A ponzi scheme is something that is not sustainable and will leave most of everyone empty handed except a few at the top who would have sold first, well Bitcoin is absolutely sustainable long term and has as much chance of collapsing as the internet.

 

I think you misunderstood what I wrote. 

 

You have provided some demonstrably untrue or misleading information and I'm trying to give people who might read this thread some facts that counter your claims. 

 

For instance, Bitcoin being around 10 years means nothing.  The first currency ever discovered is from 600 BC.  And it's no longer in use today.  If anything, the fact that it has been around 10 years and has had as much hype as it has had, and it still has such a low adoption rate, should speak volumes. 

 

For instance, only 5% of Americans hold Bitcoin.  To put that number in context, 9% of Americans have never sent an email in their life.  There are more Americans that have never sent an email than there are that hold Bitcoin.  BTW, that 5% number came from a Bitcoin-friendly survey. 

 

According to that same survey, there are 7.1 million active Bitcoin users worldwide.  That's just 0.0922% of the world.  After 10 years!!!  Even if you count in non-active (i.e. HODL'ers) into the mix, they estimate, at most, 25 million worldwide.  That's still 0.325%. 

 

That's an amazingly low penetration rate after 10 years for something that is going to become the future of all currencies.  Apple introduced the iPhone in 2007, so roughly 13 years ago, and Apple sold nearly 41 million iPhones just last year, and almost 2.2 billion since the launch of the iPhone. 

 

Also, at best, I've said that Bitcoin is Ponzi-esque or Ponzi-like.  What I have called it is more like a MLM.  The only way for you to make money is for more people to adopt Bitcoin, so you need to evangelize Bitcoin in order to get others to help drive the price up. 

 

 

 

[digibum]

11 minutes ago, Tayaout said:

About the bitcoin tps issue: https://www.forbes.com/sites/jonathanchester/2018/06/18/your-guide-on-the-lightning-network-the-opportunities-and-the-issues/#527a58a53677

 

About Ethereum 2 upgrade:

 

 

On the issue of volatility, nowadays I keep my speculative investments in crypto and my budget in stable coin like DAI, USDT or USDC which are pegged to USD and can be cashed out instantly to in THB in my bank account. 

 

But, it still can't do more than 15, right?   That's the main takeaway. 

[digibum]

27 minutes ago, Tayaout said:

Bitcoin derive it's value from it's fungibility, security and it's censorship resistant nature. I paid plenty of restaurants with bitcoin but never with gold yet gold still has value. 

 

So, you don't expect the price of Bitcoin to increase in the future? 

 

If you expect the price of what you're paying with to increase in value, it makes no financial sense to use it to pay for something today (unless you have no other form of currency). 

 

Like, a company that is just about to go public doesn't use shares to pay their rent.  They know that shortly those shares are likely going to be worth 20% or 30% or 100% more than they are today. 

 

[Tayaout]

2 minutes ago, digibum said:

 

But, it still can't do more than 15, right?   That's the main takeaway. 

Ethereum 2 is a hard fork that will be launched in the coming weeks. It can do at least 1000 tps. 

[digibum]

2 hours ago, Tayaout said:

Basically bitcoin and cryptocurrencies can be very difficult to understand and peoples fear what they don't understand. It's also a good opportunity for scammer to steal money from those who don't understand what they are doing or are greedy. 

 

At the minimum learn to use a hardware wallet and why it's fundamental to stay in control of the private keys (don't leave your cryptocurrencies on a website).

 

Don't invest more than you are willing to lose like you would on the (penny) stock market.

 

Dollar-cost averaging is probably the best strategy for most. 

 

Be patient and don't use leverage. 

 

So the future of money is a concept that is difficult to understand and is a good opportunity for people to scam and steal money from you? 

 

Are we now going to require people to get a degree in cybersecurity in order to avoid losing their life savings?  Do have have any idea how many people are successfully phished every year?  Or the number of people that still use 123456789 as their password? 

 

No world currency is going to happen that is not easy to understand and use, period.  You can go on and on about fungibility and peer to peer, stuff all day long but until a crypto currency is as easy to use as PayPal (which is also too complicated for a lot of people), it has zero chance it of being anything other than a niche payment method. 

 

 

[Tayaout]

2 minutes ago, digibum said:

 

So, you don't expect the price of Bitcoin to increase in the future? 

 

If you expect the price of what you're paying with to increase in value, it makes no financial sense to use it to pay for something today (unless you have no other form of currency). 

 

Like, a company that is just about to go public doesn't use shares to pay their rent.  They know that shortly those shares are likely going to be worth 20% or 30% or 100% more than they are today. 

 

As a programmer, I got interested into bitcoin because of the technical aspect and freedom of it. As a side effect, I was well rewarded from it's volality but it's unfortunate that it's the main point people focus on. It's not a wise idea to hold bitcoin or stocks with money that is needed in the short term. On the stock market shares can drop to 0. I know plenty of boomer who lost big in 2008 using "safe" mutual funds. 

 

Bitcoin in my view is already a bit deprecated and there is much more exciting opportunities for speculation coming up but it's safe to say Bitcoin will not go away anytime soon. I used bitcoin to pay for planes ticket, restaurants, groceries, electronics or get send/receive payment for familly. However it's volatility, fee and speed is not ideal for payment and there is stable, fast and cheap alternative. 

 

https://en.m.wikipedia.org/wiki/Stablecoin

[digibum]

8 minutes ago, Tayaout said:

Ethereum 2 is a hard fork that will be launched in the coming weeks. It can do at least 1000 tps. 

 

So it has a theoretical (burstable) limit of about 57% of JUST the 1,750 TPS daily Visa network traffic (Visa is burstable to 24,000 TPS) which does not include MasterCard, Amex, American Express, Star, ACH, SWIFT, Bank Wire, PayPal, Venmo, and good ole, cash? 

 

1,750 is about what Visa does on a normal day.  But Christmas, Black Friday, holidays, etc the traffic bursts to insane levels.  I once worked for a company that was very seasonal and we did about 80% of our annual sales in a 45 day period.  So the Burstable limit is very important otherwise you get jammed up and people can't use the network. 

 

 

 

 

[Tayaout]

9 minutes ago, digibum said:

 

So the future of money is a concept that is difficult to understand and is a good opportunity for people to scam and steal money from you? 

 

Are we now going to require people to get a degree in cybersecurity in order to avoid losing their life savings?  Do have have any idea how many people are successfully phished every year?  Or the number of people that still use 123456789 as their password? 

 

No world currency is going to happen that is not easy to understand and use, period.  You can go on and on about fungibility and peer to peer, stuff all day long but until a crypto currency is as easy to use as PayPal (which is also too complicated for a lot of people), it has zero chance it of being anything other than a niche payment method. 

 

 

Buy a hardware wallet and don't leave anything on exchange. Problem solved. Cryptocurrencies require more responsabilies but gives more freedom. If someone can't be bothered to buy a hardware wallet then they better stick with a nanny bank. 

Edited February 24, 2020 by Tayaout

[Tayaout]

3 minutes ago, digibum said:

 

So it has a theoretical (burstable) limit of about 57% of JUST the 1,750 TPS daily Visa network traffic (Visa is burstable to 24,000 TPS) which does not include MasterCard, Amex, American Express, Star, ACH, SWIFT, Bank Wire, PayPal, Venmo, and good ole, cash? 

 

1,750 is about what Visa does on a normal day.  But Christmas, Black Friday, holidays, etc the traffic bursts to insane levels.  I once worked for a company that was very seasonal and we did about 80% of our annual sales in a 45 day period.  So the Burstable limit is very important otherwise you get jammed up and people can't use the network. 

 

 

 

 

I don't think the volume of tps will require the same volume of visa anytime soon but the technology will get there. 

 

There is chainlink oracles that can enable much higher throughput but I'm not sure where the link is. 

Edited February 24, 2020 by Tayaout

[digibum]

2 minutes ago, Tayaout said:

As a programmer, I got interested into bitcoin because of the technical aspect and freedom of it. As a side effect, I was well rewarded from it's volality but it's unfortunate that it's the main point people focus on. It's not a wise idea to hold bitcoin or stocks with money that is needed in the short term. On the stock market shares can drop to 0. I know plenty of boomer who lost big in 2008 using "safe" mutual funds.

 

No mutual funds went to $0. 

 

You don't seem to understand traditional investing so it's probably not a good idea to try to make parallels to cryptocurrencies. 

 

For instance, shares can go to $0 but most of the time they don't unless a company gets into so much debt that the value of the assets is less than the amount owed.  That would be somewhat like what happened to the brokerage firms that got crushed. 

 

But, Apple isn't going to $0.  You can look at Apple's financials and see how much it owes.  You can also look at the value of their real estate holdings, their intellectual property, etc and that value is far more than their debt so someone will always pay more than $0 for Apple.