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Whats Up With Crypto?

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  • btctony
    replied
    One way may be to stop printing so much money, but I don't see that happening anytime soon. They could also stop lying to the citizens about the rate of inflation, but I don't see that happening either. I suppose a heavy tax could be imposed. I do think that will just push more people out of the traditional financial system much faster than they are already exiting.

    XRP. BTC and ETH have been looked at with a lot of scrutiny in the past. Most crypto projects really don't even need to exist. Some are without a doubt securities. A centralized and permissioned database does not need to be put on a blockchain. But that buzzword gets the attention of venture capitalists. It did at one time anyway. They may be coming around. Defi projects are pretty interesting, especially with what has happened with GameStop, but defi is in such a state of infancy, I would have no idea what to put money in that will still exist ten years from now.

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  • Captain Save
    replied
    Originally posted by btctony View Post

    Speaking of Bitcoin specifically, I have absolutely zero concern the the United States will make any attempt to outright ban it. Four years ago, I did place a non-zero chance that a government ban could possibly happen. It was small, but it was non-zero. I do not have that same opinion today. That isn't to say that other nation states will not try to ban Bitcoin, if they believe that it threatens their inferior currency. I mean, take a look at China and North Korea. They have gone to great lengths to censor their populations from participating in social media in the same open way that we do in the United States.

    Crypto in general, I do think there are regulatory concerns for some projects. I wouldn't consider investing in a project that I believe fails the Howey Test. Selling an unregistered security is something that the SEC will take action on. There is no question about that. It's currently happening with some projects as we speak.
    They don't have to ban it to affect it.. there are other ways they can affect the adoption of cryptocurrencies without outright banning it.. ..

    your second statement probably refers to XRP ... and IMO I think the SEC and XRP thing going on .. is going to end up helping XRP and giving clarity to the space... of course this is speculation but the XRP folks are in bed with the people in power.. they know what they're doing.

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  • btctony
    replied
    Originally posted by Captain Save View Post
    The biggest threat to crypto is regulatory concerns and of course that's real
    Speaking of Bitcoin specifically, I have absolutely zero concern the the United States will make any attempt to outright ban it. Four years ago, I did place a non-zero chance that a government ban could possibly happen. It was small, but it was non-zero. I do not have that same opinion today. That isn't to say that other nation states will not try to ban Bitcoin, if they believe that it threatens their inferior currency. I mean, take a look at China and North Korea. They have gone to great lengths to censor their populations from participating in social media in the same open way that we do in the United States.

    Crypto in general, I do think there are regulatory concerns for some projects. I wouldn't consider investing in a project that I believe fails the Howey Test. Selling an unregistered security is something that the SEC will take action on. There is no question about that. It's currently happening with some projects as we speak.

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  • Captain Save
    replied
    I do think you guys should educate yourself on crypto before putting your money in it.. but I do think you guys should educate yourself on something before outright dismissing it as a trend... doesn't mean you're wrong or right but you can't have an educated opinion on something if you don't know how it works.

    The biggest threat to crypto is regulatory concerns and of course that's real... but there are real products being built on decentralized technology.. yes it is at its infancy.. and just like the doctom era .. the interenet was the future .. that doesn't mean that every .com IPO that came out was worth it.

    Same goes for crypto..

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  • disneysteve
    replied
    That you very much for that, btctony. I'm glad to know that my input here is helpful to others.

    I completely agree with you regarding understanding what you are investing in but also with it being okay to sometimes just take a leap with a little "play money" and see what happens. Despite being a frugal and fairly conservative investor, I'm also someone who enjoys gambling from time to time. Sometimes in a casino, sometimes in my brokerage account.

    As I said earlier, I do think crypto has gained a degree of legitimacy recently. I'm not sure it's any less risky but it's definitely become more mainstream.

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  • btctony
    replied
    Lol, Steve. I have been there before. Even with me nearing the point of having twenty years in the information technology industry, some of these concepts were very difficult for me to grasp in the beginning. It was a long road to get to the point that I currently sit at. And I appreciate you as well, sir. You have been the voice of reason in my head (what would Steve have to say about this is a common thought that runs through my mind) regarding many financial decisions that I have made since joining this forum in 2013. And for that I will never be able to express the amount of gratitude that I owe you.

    There is most certainly a huge learning curve in the crypto space and there is just no easy way around that. I honestly don't think that there should be a way around it, but you have to give the people what they want, I suppose. You have to put in the work. All of that work gives a person the knowledge to place a value to the USD on a cryptocurrency asset or the entire cryptocurrency market cap as a whole. People do circumvent the learning curve and that is exactly how they end up getting themselves involved in scams and all kinds of crazy things. Because they don't understand what they are doing and they don't understand the risks involved. That's not such a terrible thing, if those same people would be reasonable, and only invest a small percentage of their overall investment portfolio in something that most people still consider to be high risk. However, a lot of people sadly do not follow those rules. They see these high percentage price movements in Bitcoin and believe they can get rich overnight. It's not a casino. And that sort of mentality was never the idea behind Bitcoin to begin with. Not even close.

    Steve, you are a very intelligent man. Another very intelligent man that I like to keep tabs on expresses the same view that you express. I proudly express that same view myself. And that is the idea of not investing in things that you do not understand. Everyone should follow that rule. The only deviation from that rule that I ever recommend to anyone is that very very small percentage of your portfolio that you wish to allocate to a high risk asset. I don't see a problem with those who "make a bet" on a high risk asset that they believe in with a small percentage of their net worth, providing that "the bet" has no effect on your life style, if it were to go to zero. This is the lens that most should probably be looking through.

    I personally do not consider Bitcoin to be a high risk asset any longer. In fact, as of late (the past several months), I am starting to lean towards the idea of using it as a long-term savings account. A place to park my excess cash to store value over time. This is a very interesting idea to me that is in it's infancy, it should not be construed as financial advice for anyone reading this. All of that, but that is me, and that is my own personal opinion. And that is based on the past four years of my research. I am my own financial advisor, but I am not your financial advisor.

    As always (and this may become my new signature), my advice is to be skeptical and be vigilant in your investments.

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  • disneysteve
    replied
    btctony - I appreciate your posts on this topic. And I hardly understand a word of your 2nd paragraph. LOL.

    I'll continue to stay away.

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  • btctony
    replied
    The reason these large corporations are putting Bitcoin on their balance sheets is to hedge against inflation. They see the issue with the Federal Reserve printing more money than ever before and are concerned about the value of the USD. If it becomes too inflated, other countries stop valuing it at the level that they do. After that, the citizens stop valuing it. That's how bank runs happen. Do some research on Zimbabwe, Greece, Argentina, and the list goes on and on. I'm not saying this sort of thing is going to happen in the United States, but we are headed down a very dangerous path.

    Bitcoin is a peer to peer borderless and trustless network that is being used to store value. There is no CEO of Bitcoin and there is one one person or group that controls it. It operates using consensus rules that were written in the code of the protocol in 2008. A trusted oracle or intermediary (like a bank) is not necessary in Bitcoin. Everyone is their own bank when transacting on the Bitcoin network. With that comes a lot of responsibility, because you are holding your own private keys, if you are providing self custody. For those of us who run full nodes, we are keeping a copy of the entire ledger since inception and adding each new block as they are created. With millions of full nodes running around the world that talk to each other, it creates the property of decentralization. The ledger exists on what is called a blockchain (more accurate would be to call it a time chain). It's a way of keeping time on the network using a feedback control loop. The supply cap of 21M is a big selling point on the store of value narrative, because it creates scarcity. The network is secured by public key cryptography and a proof of work consensus algorithm. There is a lot of tech behind it, but I'll recommend some books for anyone who is interested.

    On the topic of scams. There are a lot of scams in the cryptocurrency space. Don't fall into them. If anyone is going to become involved in the cryptocurrency space, educate yourself on the technical aspects first. Steer clear of anyone trying to get you to invest in their crypto/bitcoin thing, as the OP put it. If you're interested in holding Bitcoin, there are plenty of trusted exchanges in the United States that will sell you Bitcoin (the asset) for USD. There is no need to get involved in the shady side of things.

    Some books that I believe explain Bitcoin in a way that is easy for the non-tech person to understand would be "The Internet of Money" Vol. 1-3. And a book called "Bitcoin Clarity" by Kiara Bickers. She does an excellent job of providing real word examples to compare to some of the highly technical aspects of Bitcoin. You can find those on Amazon. YouTube is a pretty good resource as well, but for the person who doesn't know anything about Bitcoin, it's sometimes difficult to gauge who to trust.

    If anyone has questions, feel free to ask. I've been involved in the Cryptocurrency space since 2017 and I will never try to convince anyone to invest in something that they do not understand. I have no interest in selling anything to anyone. My goal is to help provide education, so you can make your own decisions. I wrote another post about Bitcoin on here a week or two ago. That might have some useful info in it as well.
    Last edited by btctony; 02-15-2021, 11:02 AM.

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  • bjl584
    replied
    As far as I can tell, there is no fundamental reason why crypto is valued at what it is.
    Without some fundamental understanding or logic behind it, I steer clear.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by james.hendrickson View Post

    Which does bring me back to the second question - if cryptocurrency is here to stay, how does one prudently invest in it, if at all?
    There are several places to purchase it. Coinbase is one of the main ones from what I understand. Actually, I think someone here just posted a few days ago that they bought some. Let me find the thread.

    ETA: Here is is. https://www.savingadvice.com/forums/...ying-out-cryto

    Leave a comment:


  • james.hendrickson
    replied
    Originally posted by disneysteve View Post

    You're totally right on both accounts. No different than all the folks who jumped on the GME bandwagon a couple of weeks ago and lost a bundle. I just read an article this morning about a teacher who lost his 70K in savings by getting involved in that. There have been suicides due to that fiasco.

    Everybody wants to get rich quick. It just doesn't work that way.
    Which does bring me back to the second question - if cryptocurrency is here to stay, how does one prudently invest in it, if at all?

    Leave a comment:


  • disneysteve
    replied
    Originally posted by james.hendrickson View Post
    disneysteve, my major concern is...frothy gains usually attract scammers. Also, I have the impression that a lot of people who are interested in crypto haven't spent much time in the capital markets and frankly don't have a good sense of how to manage long term risk.
    You're totally right on both accounts. No different than all the folks who jumped on the GME bandwagon a couple of weeks ago and lost a bundle. I just read an article this morning about a teacher who lost his 70K in savings by getting involved in that. There have been suicides due to that fiasco.

    Everybody wants to get rich quick. It just doesn't work that way.

    Leave a comment:


  • james.hendrickson
    replied
    disneysteve, my major concern is...frothy gains usually attract scammers. Also, I have the impression that a lot of people who are interested in crypto haven't spent much time in the capital markets and frankly don't have a good sense of how to manage long term risk.

    Leave a comment:


  • disneysteve
    replied
    The interest is because Bitcoin is hitting record highs. The novices always suddenly get interested then. You know - buy high, sell low - like most uneducated investors.

    Also, Elon Musk announced that Tesla is buying $1.5 billion in Bitcoin and will start accepting it as payment for car purchases.

    One or two of the big banks or brokerages announced they were getting involved, too. So there seems to be some growing sense of legitimacy to Bitcoin.

    Personally, I still don't comprehend what it is or how its value is determined. How can Tesla let you buy a $50,000 car with Bitcoin when a few days later, that payment might only be worth $45,000 or $40,000? How do you run a business that way?

    Leave a comment:


  • james.hendrickson
    started a topic Whats Up With Crypto?

    Whats Up With Crypto?

    Perhaps someone on the board can explain this to me.

    In the past week, I've been chatted up by at least five guys who want to get me involved their bitcoin/crypto thing. I said no to all of them.

    What going on that there is so much interest in cryptocurrencies?

    And, as a related question, are there any legitimate opportunities in cryptocurrency or blockchain technology that you see right now?
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