Bitcoin is still early

[Tim]

Tim - I have tried to remain pretty up front about % of my asset allocation. I started low around 2.5% and slowly made it up to about 8.5% of my AA directed toward Bitcoin. At this point BTC represents about 12% of my AA so I am still net positive in my investment despite the 75% draw down from highs. I have bought from $3500 all the way up to $69,000 and back down mostly with DCA buying after most was purchased sub 10K. I did not rebalance last October/November when it represented about 50% of my entire portfolio.

I have a fairly high net worth so these numbers are not insignificant but prefer not to share exact dollar amounts. I'm always happy to share the percentages as we all see what happens.

Cost basis -minus FMV= gain or loss. Gain or loss/ cost basis = a percentage.
That last percentage is the number I am curious about. I am seriously not intending on any disclosure that would be confidential. Simply an insignificant number.
Like my portfolio compared to a benchmark. Not total portfolio values or anything like that.

[xraygoggles]

Yeah, I can easily envision large amounts of bitcoin lost forever to the world of accidents, dementia, and forgotten passphrases.

Well, this has already happened - out of the 21M total bitcoins, I think ~3M are estimated to be gone forever. & it will keep happening, so in theory, they will become more and more scarce over time.

[xraygoggles]

here is my garage heater for the winter. Temps here in flyover country now ranging 10-40F and my garage is 75F.

at my home electric rate and current btc price it’s basically breakeven. But in that respect I’m buying btc through my electric bill at about current market, and I have a nice toasty garage

2 things:

1) why would u need a heated garage during autumn/winter? Not like u hang out in there more than a few minutes/day.
2) how much does it cost to heat garage via furnace vs btc mining? could just be wasting energy/money no?

[xraygoggles]

Tim - I have tried to remain pretty up front about % of my asset allocation. I started low around 2.5% and slowly made it up to about 8.5% of my AA directed toward Bitcoin. At this point BTC represents about 12% of my AA so I am still net positive in my investment despite the 75% draw down from highs. I have bought from $3500 all the way up to $69,000 and back down mostly with DCA buying after most was purchased sub 10K. I did not rebalance last October/November when it represented about 50% of my entire portfolio.

I have a fairly high net worth so these numbers are not insignificant but prefer not to share exact dollar amounts. I'm always happy to share the percentages as we all see what happens.

Why did you not take ANY profits during the manic bull run? Did you really think something that increased ur folio allocation by 25x isn't in some sort of bubble?

You must not have been around during 2017-18 bubble. You need to buy low, sell high. Maybe in 23-24 you can get out sooner.

[bovie]

2 things:

1) why would u need a heated garage during autumn/winter? Not like u hang out in there more than a few minutes/day.

Clearly you’ve never lived in a cold climate.

A warm car on a dark early morning is so much better than a steering wheel that numbs your fingers at the same rate as a handful of snow.

[jacoavlu]

Jaco...Gorgeous setup. I have looked hard at Upstream's black box and it is what I would do if I were going to start home mining. For various reasons I haven't ever pulled the trigger. But with the cheap ASIC prices right now, I might pull the trigger and add some more solar to my house to offset the mining energy I'm using and the amount of Bitcoin I own. Have you read Troy Cross' papers/info on "greening" your Bitcoin?

You should at least have an S9. If you want one DM me. I have a bunch of them. They’re fun to play with and very manageable. In terms of noise. Excellent garage heater.

[jacoavlu]

2 things:

1) why would u need a heated garage during autumn/winter? Not like u hang out in there more than a few minutes/day.
2) how much does it cost to heat garage via furnace vs btc mining? could just be wasting energy/money no?

Getting into a warm car is far better than getting into a freezing car. My garage is actually warmer than my house. 78F this morning.

At current network hash rate, and my electricity price, I’m basically buying bitcoin through my electric bill at about equal to current market price. If I’m buying bitcoin anyway, which I am, the heat is basically free.

If bitcoin price goes up, then I’m buying (through mining) at a discount.

If bitcoin price goes down, at some point, I would consider unplugging my machines. Cheaper to buy spot.

As network hash rate increases, profit margins become thinner. Tough times for bitcoin mining right now. Hashrate all time high and price bad.

[jacoavlu]

"Current estimates suggest that around 20% of the current Bitcoin supply might be permanently lost."
No telling how accurate this is.

makes everyone else's coin more valuable

Weakness #1
The only way to protect password authentication is to give access to the codes to someone else.

false. that's what backups are for

Weakness #2
No recourse. That is a real risk of a 100% loss. As many screw ups on estates and beneficiaries that occur, "unclaimed property" is probably the most significant in the long term. Without resources, the third world population would be in a great disadvantage keeping any wealth in BTC. Land and cash and hard assets don't vanish.

again, that's what backups are for. and careful planning if it's serious funds that you'd rather not lose. secret can be backed up into physical medium. put it in a safe deposit box. "the contents of the safe deposit box shall be left to my kids"

Weakness #3
Yes, BTC can't be confiscated, but it can't be retrieved. I find it low percentage of people would keep up to date records that someone else could access.
It's hard to take the keys away from someone. Be it alcohol or old age or just plan old decline.

again, not unsolveable problems

and after all that, if you'd rather use a custodian then use a custodian.

"if I die call this number they have the keys to our bitcoin"

[NapoleanDynamite]

Why did you not take ANY profits during the manic bull run? Did you really think something that increased ur folio allocation by 25x isn't in some sort of bubble?

You must not have been around during 2017-18 bubble. You need to buy low, sell high. Maybe in 23-24 you can get out sooner.

I was around...watching in 2017 and 2018. I actually was seriously introduced to Bitcoin at a price of around $350 when I was convinced it was a Ponzi. Then I sat around and watched it explode in 2017 kicking myself the whole way up. Then in 2018 I really started learning about it since it didn't go to zero and never really went away. 2019 is when I made the decision to involve it in my portfolio.

You can go back in these threads to last year to see what I was thinking in November of 2021 when we were at all time highs.

Long story short is I was and am still buying. I have a low time preference and long investing horizon. There was nothing better at the time that I could see to put the money in.(Yes in hindsight it would have been smart to take a bunch out and store it in cash...but I could say the same thing about my stock portfolio as well.) I would have had major tax implications. I have a very well paying career that I am happy in and plan to continue working at least 10 more years. And most importantly I strongly believe that even at 69K Bitcoin was and is undervalued and that the price of Bitcoin will be significantly higher 10 years from now, 20 years from now and 30 years from now than it is today. So I don't really care about the short term volatility.

I also have no long term plans to "get out". Either Bitcoin will die, I will be using it to pay for things/buy things, or I will die and it will be passed on to my heirs. I have the same philosophy for my real estate, stock, and limited bond parts of my portfolio. Eventually I will need to use the money. But God willing, I don't suspect that time will be soon.

[Zaphod]

2 things:

1) why would u need a heated garage during autumn/winter? Not like u hang out in there more than a few minutes/day.
2) how much does it cost to heat garage via furnace vs btc mining? could just be wasting energy/money no?

The man from San Diego has logged on lol

[Tim]

makes everyone else's coin more valuable



false. that's what backups are for



again, that's what backups are for. and careful planning if it's serious funds that you'd rather not lose. secret can be backed up into physical medium. put it in a safe deposit box. "the contents of the safe deposit box shall be left to my kids"



again, not unsolveable problems

and after all that, if you'd rather use a custodian then use a custodian.

"if I die call this number they have the keys to our bitcoin"

There are a lot of assumptions there.
Technology limits backwards compatibility both from a hardware, operating system and application. Just having a “backup” doesn’t mean it will useable.
Wife had a IPhone 4: ATT migrated to 5G. Hard stop. Her “internet access” from her hardware & software was not supported. Now there was an option to convert to a new phone, 5 years from now, very doubtful.
My IPhone 6 OS was incompatible with both Chase and Fidelity phone apps.
I had to work a family member’s inheritance. I found two investments that went through three probate processes dating back as far as 20 years ago. Titled in the original owners name. I had no clue of the current balance. Bank of New York would not talk to me without getting current court documents. I had one piece of paper that indicated “value” was their. Ended up getting a “medallion signature” and updated court orders,
bingo about $200k. A backup piece of media that I had no clue what it was and how to use it would have been a hard stop. WTF is this?
I have external hard drive the is incompatible with current PC’s OS. That old PC and the app are long gone . Called tech support, “too old, can’t help you.” The media backup is there, it’s just not usable.
The house was bought in 1930’s. Absolutely no paper trail. Thank goodness I had two phone numbers, the county and the reverse mortgage lender. Got the house in the wife’s name and paid off the mortgage with the funds above.
This crap goes back a long way for property rights.
Very few people will understand that “backup in the safe deposit box” or even pay the bank fee for 20 years. The closed the account and the branch moved and the bank merged.
The point is, your plan is very good and feasible.
It is just not practical because the is no one to call and few have your expertise.
I could call the bank and ask, “Does jacoavlu have a safety deposit box?” Then they say, need the court orders before I talk to you. Now you are back into the banking system and someone to call to unlock value. Right where you started.
That is $500k from having a number to call. I have no clue if he had a backup or any holdings of BTC. I doubt it, but it is feasible.
Did not show up in the unclaimed property search for sure. I wish it did.

[Panscan]

Well, this has already happened - out of the 21M total bitcoins, I think ~3M are estimated to be gone forever. & it will keep happening, so in theory, they will become more and more scarce over time.

While true, this doesn’t necessarily mean they will go up in value. Lots of shitcoins have built in burn mechanisms which reduce supply over time but that doesn’t mean people need it.

I think people obsessed with supply miss this and I’ve never understood why all the shitcoin are so fixated on it. The token requires utility to be necessary and have supply matter. If we had a finite amount of insulin in the world, the price would go up as the supply dwindles. People need it. There is no real need for Btc at present.

[jacoavlu]

There are a lot of assumptions there.
Technology limits backwards compatibility both from a hardware, operating system and application. Just having a “backup” doesn’t mean it will useable.
Wife had a IPhone 4: ATT migrated to 5G. Hard stop. Her “internet access” from her hardware & software was not supported. Now there was an option to convert to a new phone, 5 years from now, very doubtful.
My IPhone 6 OS was incompatible with both Chase and Fidelity phone apps.
I had to work a family member’s inheritance. I found two investments that went through three probate processes dating back as far as 20 years ago. Titled in the original owners name. I had no clue of the current balance. Bank of New York would not talk to me without getting current court documents. I had one piece of paper that indicated “value” was their. Ended up getting a “medallion signature” and updated court orders,
bingo about $200k. A backup piece of media that I had no clue what it was and how to use it would have been a hard stop. WTF is this?
I have external hard drive the is incompatible with current PC’s OS. That old PC and the app are long gone . Called tech support, “too old, can’t help you.” The media backup is there, it’s just not usable.
The house was bought in 1930’s. Absolutely no paper trail. Thank goodness I had two phone numbers, the county and the reverse mortgage lender. Got the house in the wife’s name and paid off the mortgage with the funds above.
This crap goes back a long way for property rights.
Very few people will understand that “backup in the safe deposit box” or even pay the bank fee for 20 years. The closed the account and the branch moved and the bank merged.
The point is, your plan is very good and feasible.
It is just not practical because the is no one to call and few have your expertise.
I could call the bank and ask, “Does jacoavlu have a safety deposit box?” Then they say, need the court orders before I talk to you. Now you are back into the banking system and someone to call to unlock value. Right where you started.
That is $500k from having a number to call. I have no clue if he had a backup or any holdings of BTC. I doubt it, but it is feasible.
Did not show up in the unclaimed property search for sure. I wish it did.

Tim I’m losing respect for you because instead of asking questions about something you done understand, you make statements that are not applicable, and assertions that are incorrect

bitcoin is and always will be backward compatible. That’s a fundamental tenet of bitcoin. It passes the “coma test”. No hard forks*. The software is almost ossified. Feature not a bug. Not talking media backups. 12 or 24 words. It’s just a secret.


* there have been hard forks when persons have wanted bitcoin to change in some way. Most famously this was argued in the blocksize debate of 2017. The software is open source so anyone can change it and run alternative code. Forks like this created bcash (BCH) and bitcoin sv (BSV) which have trended toward zero in their value relative to bitcoin

[Tim]

Tim I’m losing respect for you because instead of asking questions about something you done understand, you make statements that are not applicable, and assertions that are incorrect

bitcoin is and always will be backward compatible. That’s a fundamental tenet of bitcoin. It passes the “coma test”. No hard forks*. The software is almost ossified. Feature not a bug. Not talking media backups. 12 or 24 words. It’s just a secret.


* there have been hard forks when persons have wanted bitcoin to change in some way. Most famously this was argued in the blocksize debate of 2017. The software is open source so anyone can change it and run alternative code. Forks like this created bcash (BCH) and bitcoin sv (BSV) which have trended toward zero in their value relative to bitcoin

Not losing respect for you.
You are talking "off line physical storage". This is not a "paper or plastic" choice.
Fundamentally, you have a device and you need to physically move it, retrieve it and still have the capability to read it again and then access the internet.
Yes, I am ignorant in alot of the technology. Storage devices require a tool that is compatible.

This WAS a cutting edge storage device. A ************************ pack for storing data off site. It would be useless. I don't see how any device will not become obsolete.
"It stored up to 7.25 megabytes on a single removable disk pack."

https://www.computerhistory.org/revolution/mainframe-computers/7/161/569

Is a wallet the equivalent of a box you open and physically take out a piece of paper? Paper deteriorates as well, plastic lasts longer.
It works today, probably not sometime in the future is my take. I could be wrong.

[jacoavlu]

Not losing respect for you.
You are talking "off line physical storage". This is not a "paper or plastic" choice.
Fundamentally, you have a device and you need to physically move it, retrieve it and still have the capability to read it again and then access the internet.
Yes, I am ignorant in alot of the technology. Storage devices require a tool that is compatible.

This WAS a cutting edge storage device. A ************************ pack for storing data off site. It would be useless. I don't see how any device will not become obsolete.
"It stored up to 7.25 megabytes on a single removable disk pack."

https://www.computerhistory.org/revolution/mainframe-computers/7/161/569

Is a wallet the equivalent of a box you open and physically take out a piece of paper? Paper deteriorates as well, plastic lasts longer.
It works today, probably not sometime in the future is my take. I could be wrong.

again, Tim, it's just a secret. as simple as 12 words. do you think you could figure out a way to not lose 12 words if it really mattered?