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  • Zaphod
    replied




    I think the value in these cryptocurrencies is a store of value outside the system which is controlled by governments that can tax you, confiscate your assets, print money causing hyperinflation etc.  A bonus is that it is liquid and you can convert it back to local currency or pay someone else with the cryptocurrency.  On top of that, the block chain technology behind these coins is exciting and has a lot of potential.

     

    Having said that, owning total us and total international index funds would probably be enough to reap the benefits in the future.  But, I don’t think it is wrong to take some play money and buy some coins.  Some are even considering cryptocurrency a new asst class: http://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/Bitcoin-Ringing-The-Bell-For-A-New-Asset-Class.pdf
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    Thats the same argument as gold of course. Converting back to local currency then negates those benefits, but maybe different situations.

    Theres nothing wrong with trying to ride a bubble and seeing what happens with an appropriately small negative expected value portion of your portfolio. Just have a plan and treat accordingly.

    The dot com bust was huge, and all these places and basically fake businesses went under yet the promise of those companies and hype behind them did in fact become a reality. Just took longer and it wasnt necessarily where people thought, etc...

    Leave a comment:


  • Raddoc123
    replied
    I think the value in these cryptocurrencies is a store of value outside the system which is controlled by governments that can tax you, confiscate your assets, print money causing hyperinflation etc.  A bonus is that it is liquid and you can convert it back to local currency or pay someone else with the cryptocurrency.  On top of that, the block chain technology behind these coins is exciting and has a lot of potential.

     

    Having said that, owning total us and total international index funds would probably be enough to reap the benefits in the future.  But, I don't think it is wrong to take some play money and buy some coins.  Some are even considering cryptocurrency a new asst class: http://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/Bitcoin-Ringing-The-Bell-For-A-New-Asset-Class.pdf

    Leave a comment:


  • Zaphod
    replied




    Cryptocurrencies like bitcoin are internet gold. A way of storing value without 3rd party involvement or central control. Technology- blockchain behind it may one day revolutionize the finance world like internet did for information transfer. No one know what will happen for sure. But every year since bitcoin started (now 8 yrs) many have predicted its death. Here we are closing in on 5k a coin, more applications by the day, acceptance world wide, and soon traditonal investment vehicles like etfs available. Should be fun to see what happens!
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    I am not disagreeing with anything except the hyperbolic nature of the talk. For example, how is bitcoin de-centralized, and in some places a third party is what gives things legitimacy and safety. People talk about clearinghouses etc...which is a third party, and again, we already have these structures in place. There are a couple good use cases, the rest of the "press button to apply ICO to issue" is simple bubble behavior and mania. When that goes kaput, whats leftover will be the cases where its actually going to be successful, which will be a much more limited scope and some novel ideas we havent considered yet.

     

    And again, you say one day etfs, etc...basically reinventing the wheel with a slower more costly vehicle, we have a wheel.

    Leave a comment:


  • Raddoc123
    replied
    Cryptocurrencies like bitcoin are internet gold. A way of storing value without 3rd party involvement or central control. Technology- blockchain behind it may one day revolutionize the finance world like internet did for information transfer. No one know what will happen for sure. But every year since bitcoin started (now 8 yrs) many have predicted its death. Here we are closing in on 5k a coin, more applications by the day, acceptance world wide, and soon traditonal investment vehicles like etfs available. Should be fun to see what happens!

    Leave a comment:


  • Zaphod
    replied




    I’ve been a buy and hold 3 fund indexer for 10 years.  I became intrigued by cryptocurrencies recently after doing some research and made a small investment (about .5% of portfolio).    I realize that the idea may fall flat on its face as there are issues with scale and governments are certainly going to intervene at some point.  But the idea is compelling and has a chance of being revolutionary.  What would people think of the internet, personal computers, index funds in the 60s?  We have exposure to most industries through our index funds but little to digital currencies.    I did some research and am using coinbase and a vault within coinbase for extra protection.  I am fully ready for bitcoin and etherium to go to 0, but I believe there is a chance that we are seeing the internet of the finance world being born.
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    There is a small chance there is some revolutionary technological aspect to it for sure. However, it is highly unlikely to be within any of the currently proposed use cases that have the most support. Almost every single one of the ideas they float about has more friction, is slower and more costly than the current way.

    Whats hilarious is it now branching out into financialization of everything, and people that are apparently totally ignorant of I guess that markets exist and how they work getting all excited at the "tokenization" of everything where one can participate, trade, invest in anything using tokens. Yes! Great idea, so great they invented that hundreds of years ago, its called the market and equity, etc...

    Like any early market, it will be rife with mostly fraud, and the base case of best utilization is not likely even appreciated right now.

    Leave a comment:


  • Raddoc123
    replied
    I've been a buy and hold 3 fund indexer for 10 years.  I became intrigued by cryptocurrencies recently after doing some research and made a small investment (about .5% of portfolio).    I realize that the idea may fall flat on its face as there are issues with scale and governments are certainly going to intervene at some point.  But the idea is compelling and has a chance of being revolutionary.  What would people think of the internet, personal computers, index funds in the 60s?  We have exposure to most industries through our index funds but little to digital currencies.    I did some research and am using coinbase and a vault within coinbase for extra protection.  I am fully ready for bitcoin and etherium to go to 0, but I believe there is a chance that we are seeing the internet of the finance world being born.

    Leave a comment:


  • hightower
    replied
    Only thing I know about bit coin is that I don't understand it at all.  I know that my brother in law bought a small bitcoin miner a long time ago when it could actually mine enough to justify the electricity it uses.  I have ZERO idea how the ************************ those little machines work though.  It's subjects like these that really humble me.

    Leave a comment:


  • Craigy
    replied







    That’s the thing, arguably bitcoin et al are no more of an artifice than is the US dollar.  “In God We Trust” is no more backed by any physical object than your cryptocurrencies.

    I don’t know if I’d go as far as saying bitcoin is a safe form of transacting cash, if anything it’s more prone to fraud, but it’s definitely more anonymous by its nature.
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    The USD is backed by the “full faith and credit” of the US. That means the productivity of the wealthiest country on earth with one of the largest nuclear arsenals amassed. It is most definitely backed by something physical.

    That cryptos have such volatility make them terrible currencies.
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    It's a fiat. There's no getting around that.  You can't go and swap them out for a portion of the nuclear arsenal.

    USD etc. only has value because the public agrees to give it value.  Obviously the public who agrees to give the USD value is tremendously larger and stronger than the amount of people who agree to give bitcoin value, and thus its stability.  Arguably the only thing that separates bitcoin from the dollar is the amount of people who buy into it-- the same can be said for bitcoin vs dogecoin or preferring monopoly money vs zimbabwe dollars.

     

     

    Leave a comment:


  • Ways To Build Wealth
    replied
    It's interesting this thread started as I literally watched this the other day. I wonder what will happen when all of the bitcoins are in digital circulation. How close is that to happening and when it does will everything fall apart or will its value become stable.

    Leave a comment:


  • Zaphod
    replied




    That’s the thing, arguably bitcoin et al are no more of an artifice than is the US dollar.  “In God We Trust” is no more backed by any physical object than your cryptocurrencies.

    I don’t know if I’d go as far as saying bitcoin is a safe form of transacting cash, if anything it’s more prone to fraud, but it’s definitely more anonymous by its nature.
    Click to expand...


    The USD is backed by the "full faith and credit" of the US. That means the productivity of the wealthiest country on earth with one of the largest nuclear arsenals amassed. It is most definitely backed by something physical.

    That cryptos have such volatility make them terrible currencies.

    Leave a comment:


  • Craigy
    replied
    That's the thing, arguably bitcoin et al are no more of an artifice than is the US dollar.  "In God We Trust" is no more backed by any physical object than your cryptocurrencies.

    I don't know if I'd go as far as saying bitcoin is a safe form of transacting cash, if anything it's more prone to fraud, but it's definitely more anonymous by its nature.

    Leave a comment:


  • ITEngineer
    replied
    Don't forget the downsides. You can lose value overnight (when was the last time the US Dollar lost 20% of it's value in one day?) Ethereum got hacked. Bitcoin is in a civil war due to transaction speed. It's not all sunshine and rainbows.

    Leave a comment:


  • MDHubby
    replied







    Bitcoin and other cryptocurrencies are fascinating to me (my education is in Software Engineering).

    I started following it seriously back in about 2012. I remember bitcoins being a few hundred bucks thinking that was ridiculous considering how “underground” it was. The average person would have no idea what a bitcoin was, yet this little string of numbers could be worth hundreds of dollars. It really rose to prominence because of its anonymity and appeal to those who don’t want people seeing their finances (read: Dark Web).

    Mining for bitcoin, even at that point, was a losing effort. I got into some smaller cryptos for fun where I would mine for Dogecoin, a sort of parody crypto that withstood the test of time (there have been hundreds of failed cryptos). After a couple years I kind of got out of it… 1000 dogecoin translated to about $.12, and there was no hope in sight for any significant rises. We did manage to fund the Jamaican bobsled team in 2014 and sponsor a NASCAR team, which was fun.

    I recently looked up the price of Doge and realized I actually had a few hundred dollars worth sitting on one of my old phones. I can certainly see the appeal of making a quick buck on these types of things but don’t be fooled: there are people who devote their life to playing this market. It is constantly manipulated and can be wildly volatile. Even with a solid understanding of hashing, blockchains, and mining, I avoid putting anything besides “fun” money in it.

    Just $.02 (or 11.5 doge) from a computer nerd.
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    I actually mined some dogecoin a couple years ago myself.  Not sure what happened to it.

    That’s the thing, this coin market is, by definition, completely artificial, and it swings wildly at the hands of a small population of people dedicated to manipulating the market.

    As long as there are individuals out there excited by the prospect of big returns, the coins will stay alive. But without the constant infusion of new, uneducated money, hard to see a future…
    Click to expand...


    The thing with cryptocurrencies is that although they are a (albeit risky) investment mechanism, they are also just a form of currency. In fact they are currencies with significant upsides compared to traditional currency. I think bitcoin has its place as an instant, anonymous, and safe form of transacting "cash" for goods and services. In this regard, I think it is bound to stick around. In fact, with economic turmoil in world markets, I imagine many will turn to cryptos as a way of safely transacting internationally.

    Leave a comment:


  • Craigy
    replied




    Bitcoin and other cryptocurrencies are fascinating to me (my education is in Software Engineering).

    I started following it seriously back in about 2012. I remember bitcoins being a few hundred bucks thinking that was ridiculous considering how “underground” it was. The average person would have no idea what a bitcoin was, yet this little string of numbers could be worth hundreds of dollars. It really rose to prominence because of its anonymity and appeal to those who don’t want people seeing their finances (read: Dark Web).

    Mining for bitcoin, even at that point, was a losing effort. I got into some smaller cryptos for fun where I would mine for Dogecoin, a sort of parody crypto that withstood the test of time (there have been hundreds of failed cryptos). After a couple years I kind of got out of it… 1000 dogecoin translated to about $.12, and there was no hope in sight for any significant rises. We did manage to fund the Jamaican bobsled team in 2014 and sponsor a NASCAR team, which was fun.

    I recently looked up the price of Doge and realized I actually had a few hundred dollars worth sitting on one of my old phones. I can certainly see the appeal of making a quick buck on these types of things but don’t be fooled: there are people who devote their life to playing this market. It is constantly manipulated and can be wildly volatile. Even with a solid understanding of hashing, blockchains, and mining, I avoid putting anything besides “fun” money in it.

    Just $.02 (or 11.5 doge) from a computer nerd.
    Click to expand...


    I actually mined some dogecoin a couple years ago myself.  Not sure what happened to it.   :lol:

    That's the thing, this coin market is, by definition, completely artificial, and it swings wildly at the hands of a small population of people dedicated to manipulating the market.

    As long as there are individuals out there excited by the prospect of big returns, the coins will stay alive. But without the constant infusion of new, uneducated money, hard to see a future...

    Leave a comment:


  • MDHubby
    replied
    Bitcoin and other cryptocurrencies are fascinating to me (my education is in Software Engineering).

    I started following it seriously back in about 2012. I remember bitcoins being a few hundred bucks thinking that was ridiculous considering how "underground" it was. The average person would have no idea what a bitcoin was, yet this little string of numbers could be worth hundreds of dollars. It really rose to prominence because of its anonymity and appeal to those who don't want people seeing their finances (read: Dark Web).

    Mining for bitcoin, even at that point, was a losing effort. I got into some smaller cryptos for fun where I would mine for Dogecoin, a sort of parody crypto that withstood the test of time (there have been hundreds of failed cryptos). After a couple years I kind of got out of it... 1000 dogecoin translated to about $.12, and there was no hope in sight for any significant rises. We did manage to fund the Jamaican bobsled team in 2014 and sponsor a NASCAR team, which was fun.

    I recently looked up the price of Doge and realized I actually had a few hundred dollars worth sitting on one of my old phones. I can certainly see the appeal of making a quick buck on these types of things but don't be fooled: there are people who devote their life to playing this market. It is constantly manipulated and can be wildly volatile. Even with a solid understanding of hashing, blockchains, and mining, I avoid putting anything besides "fun" money in it.

    Just $.02 (or 11.5 doge) from a computer nerd.

    Leave a comment:

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