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InvestingOnSale

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Everything posted by InvestingOnSale

  1. My feeling is that they are really lost. Satashi is either really patient and really believes in bitcoin, or he’s already extremely rich enough that billions of dollars doesn’t tempt him at all. I know I would have sold some by now if I were him. The other 2 possibilities are that he lost the keys or he is dead. If you read some of the code and the messages that he had on forums I have no reason to believe that he would sell any of it, he talks a lot about the bailouts of certain banks within the code. What would be the point would be of creating bitcoin to become a decentralized currency just to become cash rich. He seems like a textbook Austrian. "Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible." He/they could sell $10M worth today to live off of in the meantime and not even make a dent in the size of the holdings. There are so many possibilities here that any speculation about his coins has to be taken with a big grain of salt. For instance, it's possible that money is not important enough to him, and that his pre-Bitcoin lifestyle and income suits him just fine. Alternatively, it's also possible that he began mining (or buying) Bitcoins in later years to an address that no one knows about and has been selling and living off of those. These are just two possibilities (and we don't even know if the guy is alive or dead).
  2. 1. Bitcoin is a software-based protocol, so, one day, the software could be changed to allow for any number of decimal places. 2. The book "Mastering Bitcoin" is great, although somewhat technical.
  3. Just curious, at what age and price point would this move from being tulips to being an actual store of value ala gold? Ignore volatility, bc it seems obvious to me that at a certain market cap volatility will be similar to that offild today. This was written in April/2013: ( https://fee.org/articles/bitcoin-for-beginners/ ) "As of this writing, a Bitcoin is trading for $88.249. Just three years ago, it hovered at $0.14. Many people look at the current market and think, surely this is a speculative bubble. That could be true, but it might not be. People are exchanging an unstable, fiat paper for something with a real title that cannot be duplicated. Everyone knows precisely how many Bitcoins exist at any time. Anyone can observe the transactions taking place in real time. A Bitcoin’s price can go up and down, and that’s fine, but there is no real speculation going on here that is endogenous to the Bitcoin market itself. Is it a pyramid scheme? The defining mark of a pyramid scheme is that more than one person has an equal claim on the same money or good. This is physically impossible with Bitcoin. The way the program is set up, it is a strict property rights regime with no exceptions." Do you believe that this parabolic spike up is driven by the world suddenly realizing the fundamental value of bitcoin? What is that fundamental value? Every other knucklehead on the planet is picking up a little bc right now to play the rush. They have no clue how the technology works or what its intrinsic value is. I'm not saying bc is valueless, its actually has some neat uses. So do tulip bulbs, they can grow lovely flowers. Please show me an example of an asset that has spiked in value like this that wasn't a bubble. This is a good point. There are plenty of examples whereby a chart of five bubbles is created and "the next bubble" (bitcoin in this case) is shown next to them. But no one asks the inverse question. See this thread for two examples of assets that saw big increases in price and turned out not to be bubbles, plotted alongside bitcoin.
  4. SD, I can't seem to find the course at the link you provided. Five Summer Innovation Series courses are listed, and none are "Blockchain...". Am I missing something?
  5. While it is true that the ledger size is open ended, at any given time the ledger size is finite and will always be finite. There is no such thing as an infinite sized ledger. The bitcoin blockchain is currently 124GB (it would fit on a USB stick). That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it. Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big). To put 124GB in proportion to the amount of storage in the world from wikipedia (keep in mind that 1 petabyte = 1,000,000 GB: Games: World of Warcraft uses 1.3 petabytes of storage to maintain its game Steam, a digital distribution service, delivers over 16 petabytes of content to American users weekly Cloud backup: Multiple backup vendors, including Code42, Backblaze, and Mozy claim to store 90 or more petabytes of user backup data Physics: The experiments in the Large Hadron Collider produce about 15 petabytes of data per year, which are distributed over the Worldwide LHC Computing Grid.[26] In July 2012 it was revealed that CERN amassed about 200 petabytes of data from the more than 800 trillion collisions looking for the Higgs boson Climate science: The German Climate Computing Centre (DKRZ) has a storage capacity of 60 petabytes of climate data Folding@home (Scientific Data): Folding@home has generated 0.5 petabytes of simulated data Google Photos has an estimated of 13.7 petabytes worth of photos uploaded in the first year of its existence The storage capacity of the world right now is measured in zettabytes (1 zettabyte = 1,000,000 petabytes), and it is doubling every 1-3 years. Blockchains would have to grow at an enormous rate for a long-long time before storage would be an issue. And if it did become an issue someday that would push innovation and start to drive the storage industry the way mining (and AI as well) is going to start to drive the GPU industry. There won't be a shortage for long as NVIDIA, AMD, and others will ramp up production to try and meet demand. There are already GPU cards coming out specifically designed for mining. And bitcoin, of course isn't even mined with GPUs anymore, but custom chips specifically designed to mine bitcoins. I agree with the point rka is making, and I would add that there are also potential changes to the Bitcoin blockchain in the future that could make it more manageable. For instance: 1. Once the blockchain size got to, say, 100 TB, perhaps the blockchain breaks in two: the Historical Blockchain (stored on only a few thousand computers around the world) and the Current Blockchain (with wallet holdings starting at some arbitrary block height, and all transactions moving forward from there). Users only store the Current Blockchain on their computers. (I realize there are exponential growth challenges here.) 2. Or, at the point we are talking about, there might be many millions of computers around the world using the blockchain. Perhaps a technology is built whereby, instead of every computer acting as a node, clusters of, say, 100 computers act as a single node. That would reduce any single computer's storage need to 1/100th what it was previously. While the current Bitcoin blockchain depends on every user storing the entire blockchain, there could be potential solutions to change that in the future, to cope with storage constraints while preserving the distributed ledger principle.
  6. Here is his blog in English, as translated by Google: https://translate.google.com/translate?hl=en&sl=zh-CN&u=http://liluchineseblog.tumblr.com/&prev=search
  7. Thanks for sharing DTEJD1997. Really interesting anecdotes and a reminder to be looking for value anywhere, not just in equities. Looking forward to hearing more.
  8. Shai, when is the interview slated to take place? Thanks!
  9. It strikes me that Eric's description of the mystery business is very compelling, and, even if one could not figure out exactly which business he was talking about, one could do well by finding businesses with similar characteristics: - disrupting a large industry - small share of a growing market - a clear and increasing competitive advantage, that should help solidify it as the dominant player in its space (It is interesting to me that Eric's company has only 0.3% of the market, yet he has reason to believe it is the "dominant" player.) - an astute and well incentivized board of directors (this one is interesting; few investors focus on the incentives of the Board) - run by an extraordinarily intelligent CEO who has a clear strategic vision and has created an outstanding corporate culture - focus on long-term profitability - long-term investment horizon necessary due to a potentially “messy” stock price over the next few years. - cash-rich balance sheet Cimpress (CMPR) fits a lot of these characteristics. (Khrom has written about it in the past, so it is unlikely to be the mystery company.)
  10. At some point I read he was going to systematically decrease exposure as the price rose. Presumably because value was less. I have a decent % of my portfolio in the warrants and happy with their return so far this year. He has a big chunk of those too but not much relative the his AUM I presume. The warrants were at steal at 5-7 a couple of years ago. FWIW the AIG investment has been much more successful for him then others, namely SHLD but that story may still have a way to play out. Exactly. The article makes it sound like he was reshuffling the portfolio, when, in fact, the AIG sale was much bigger than the other moves. The better conclusion is that he is reducing exposure.
  11. It is frustrating as an investor to read many different approaches to investing, each of which were apparently successful for their practitioner, but which are all different from one another in some way. But I am thankful each of them took the time to put their thoughts on paper (or give interviews, etc.). Where would many of us on this board be if Buffett had never put his thoughts down in annual letters or given university talks or media interviews?
  12. Based on those three fee structures, it looks like his business plan expected 12% returns on partnership assets. 12% returns provides Buffett with 2% on assets as a management fee under all three fee scenarios. Looks like the 3 options for limited partners comes from Buffett's 1960 letter when he was trying to combine all the partnerships into one. http://www.bengrahaminvesting.ca/Resources/Buffett-Partnership-Letters.pdf As of 1968, his gross compounded returns were an annualized 31.6% and net returns were 25.3%. So, I take the fact that the three fee structures break even to the partners at a 12% annual return as Buffett being consistent in keeping expectations low. With the benefit of hindsight and after reading all the letters, one can't help but be amused at the high outperformance, yet constant downplaying of expectations.
  13. Seems like a great guy. I couldn't help but notice that his is 2006 commentary even discloses to investors that he redeemed $375,000 to pay for a cottage. Talk about transparent. http://hilleryvaluecommentaries.com/assets/commentaries/12-30-06.pdf
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