Your 2017 Best Ideas

[Guest Cameron]

I sold all my tax free savings account stocks in January and bought Bitcoin then added all new savings to Bitcoin and Ethereum since then mostly whenever there were big dips.

 

Wow.  I didn't even come close to going all-in like that.  I'd have to go and figure it out, buy I've probably invested about $10K total in my entire basket of cryptocurrencies in the last 2 years, maybe a little less.  That small amount is in the 6-figures now. Had I done what you did, I'd be retiring now.

 

If you guys don't mind-

 

- What are both of your thoughts on cryptos going forward?  Which specific cryptos are you most bullish on?

- How are you storing your crypto assets?  I have been holding btc, eth, and lc but I keep them in coinbase which I understand isn't without substantial risk.  Moving outside of coinbase seems somewhat complicated and messy

 

Its nothing more then a ledger, a means to transfer money, the only think I can equate this to is if everyone ran out and purchased checkbooks with the hope the price of them would go up significantly. Bitcoin has shifted from the minority of people who used it for its actually purpose to people buying it with the hope they can sell it to someone else for more. This has happened to bitcoin before and the only thing of value in any of this is the blockchain. Going forward I see this as nothing more than a fad much like fidget spinners and Pokemon Go.

 

Not sure I think the future is knowable here.  One thesis is it simply replaces gold as a store of value - probably unlikely but +EV under most scenarios

 

I had an older friend who I have no talked to in a while call me a couple days ago and tell me to put money into cyptocurrencies because it will be worth millions in a year, there are videos on YouTube of people daydreaming about what they will do with all the money they are going to make from bitcoin, ether etc.  Yet I have had no one tell me what value the actual bitcoin adds. I'm pretty sure China banned these things this week, so if the thesis is that people will use bitcoins instead on gold there goes your biggest market.

 

Nobody on this board is going to argue against the fact that this is highly speculative.  But the fact that this has attributes consistent with other bubbles (internet daytrading) is not evidence that this is a bubble.  To the extent it becomes a widely accepted store of value (i.e. gold) the price movements over the past year are very immaterial.  What value does gold add that bitcoin doesn't?  Bitcoin is decentralized - nobody cares what the China government says.

 

No one cares what the China government says? besides the fact that its a communist country bitcoin can be as decentralized as much as it wants if the Chinese government doesn't want its citizens to use bitcoins it can censor their citizens from it, they have done this with Google, Facebook, YouTube you name it blocking CoinBase isn't some hard task for the Chinese government, they can't even view the Chinese Wiki. The size of the Chinese Internet Police Force is in the 2million range about 700,000 more people than the amount of active troops the United States has.

 

also your second sentence has the sentiment of a "its different this time" quotable.

[SharperDingaan]

Re: Crypto currency and ICO's.

 

You might want to remind yourself that a token (Bitcoin Ether, etc.) is not an investable asset.

You are exchanging real cash for a digital asset through a single FX facility backed by a limited liability corporation (LLC) - and are hoping that 1) the value of the token will rise during the time that you are holding it, and 2) the corporate FX facility will actually be able to return real cash for your token when you cash out.

 

The corporation did the ICO to raise the cash to fund its development; the go-forward expectation is that on any given day - the funds from new buyers of token, will fund the cash out of token sellers. In the early days the LLC has the cash to make good on net cash outs ... but as it burns through its cash to fund that development - your odds on a successful exit rapidly decline. No different to a ponzi scheme.

 

To escape collapse the token either has to be widely used as currency, or the FX facility has to be backed by a central bank, &/or a large consortium. If you are one of the top-5 distributed ledger currencies this may well be feasible, but if you aren't .... it doesn't end well.

 

SD

 

 

 

 

[rkbabang]

POE

 

It has been de-risked with the presence of hydrocarbons and within a few days or max one year, you are looking at a 10 to 100 bagger potential. If not your money back minus 10% from here?

 

Cardboard

 

 

+1.  I've been buying more POE. As you said it has less risk since the recent news and the stock has been going down not up.

[Lance]

Do any of the crypto-investors here use Genesis Mining (or any other cloud mining)?  Thus far I've only purchased via Coinbase, but am considering using Genesis Mining to diversify into some of the other coins - eg Zcash, Dash and Monero.  Have just started looking into it though.

 

Thanks

Lance

[james22]

I think I understand what a digital currency is, how Bitcoin works, and some of the arguments for it. But I still don’t feel like putting my money into it, because I consider it a speculative bubble.

 

https://www.oaktreecapital.com/docs/default-source/memos/yet-again.pdf

[rkbabang]

Do any of the crypto-investors here use Genesis Mining (or any other cloud mining)?  Thus far I've only purchased via Coinbase, but am considering using Genesis Mining to diversify into some of the other coins - eg Zcash, Dash and Monero.  Have just started looking into it though.

 

Thanks

Lance

 

I have looked at cloud mining as well as building a mining rig. I came to the conclusion that you end up with more coins by just using Bitcoin to purchase them directly with shapeshift or poloniex, or bittrex.  Whatever you were thinking of spending on a mining contract use Coinbase to buy that amount of Bitcoin then use one of those exchanges I just mentioned to exchange it to the other currency.

[SharperDingaan]

I think I understand what a digital currency is, how Bitcoin works, and some of the arguments for it. But I still don’t feel like putting my money into it, because I consider it a speculative bubble.

 

https://www.oaktreecapital.com/docs/default-source/memos/yet-again.pdf

 

Couple of things to add....

 

If you can issue your own currency, & get others to use it; you get the benefit of seigniorage - the difference between the value of the money and what it costs to produce and distribute it. Pull off this trick & you don't need to issue equity or debt to fund your start-up. Hence everyone rushing to do ICO's, & dissing anything that might strangle the current ability of a start-up to get 'something for nothing'.

 

Prices for coin will very likely rise as the technology becomes more mainstream; ie: rising demand for Bitcoin on the fixed supply (that doesn't change with price) essentially guarantees it. But are you really confident today - that your $50,000 Bitcoin is actually going to be cashable in the future?

 

The real value of the block chain/smart contract technology is when it is used to disrupt long standing existing business processes, not in issuing token for cash. SETL coin and the R3 consortium being a classic example - reducing securities settlement time to T, eliminating days of JIT financing, reducing the number of confirmation staff, and office space in which to house them. Find the firms doing this kind of change, & you will almost certainly become very rich  ;)

 

We're at the start of the next industrial revolution, so consider investing accordingly. Hoping to sell to someone dumber than you, is a pretty shallow way to go.

 

SD

 

     

 

 

[rolling]

My outside and little informed opinion:

 

1- Blockchain is likely to revolutionize lots of industries. Thankfully (I think) it is not proprietary.

 

2- Blockchain currencies? To me, it sounds like tulips all over again: red tulips, yellow tulips, black tulips....

 

3- is there any real difference between bitcoin and the coins one collects at some online games? For the moment there is a cashout, but will it in the future?

[SharperDingaan]

My outside and little informed opinion:

 

1- Blockchain is likely to revolutionize lots of industries. Thankfully (I think) it is not proprietary.

 

2- Blockchain currencies? To me, it sounds like tulips all over again: red tulips, yellow tulips, black tulips....

 

3- is there any real difference between bitcoin and the coins one collects at some online games? For the moment there is a cashout, but will it in the future?

 

A brief response, then we we drop the discussion; as the intent is not to hijack the thread.

 

Most people associate block chain with crypto-currency because of Bitcoin, & because pretty much all textbooks extensively feature the mechanics of Bitcoin. As it was designed for a zero trust environment (ie: the silkroad), it was necessary to invent both the distributed ledger (DL) and the smart contract (ie: Nakamoto/Szabo). In reality, it is far faster and efficient to run the block chain and smart contract on a database, use the token in a 'registry' function, and eliminate the DL entirely.

 

The more digital wallet holders the Oracle (Bitcoin, Etherium, DASH, etc.) has - the more effective the crypto-currency becomes for everyone, as wallet holders can transact with each at a fraction of a cent, & without borders. Distribution is critical, and the best platform would be an ApplePay/GooglePay - with every Apple or Google account holder in the world having a Apple or Google digital wallet. Whatever crypto-currency they choose would become the global standard, and they would have strong incentive to choose the same currency versus issuing their own. One tulip only, and maybe a couple of varieties for very specific industry applications; today there are getting on 1100+, & more coming to market almost every week.

 

Of course this is heresy to the crypto-currency industry as it kills the ICO, and focuses development on block chain/smart contract application (hard sell) - versus currency trading (easy sell). To date the main beneficiary has been Etherium, and its cloud based applications that you can test your vision on. Both focuses have their place, and arguably ICO investing is really no different to momentum trading. 

 

However the place for any further discussion are the block chain threads, & not here.

 

SD

 

 

[roughlyright]

I have launched a crypto hedge fund recently.  I don't hold any stocks, bonds or any other regular assets. I only own crypto currencies in the fund. If anyone is interested, please PM me.

 

Roughly Right

[Hielko]

The more digital wallet holders the Oracle (Bitcoin, Etherium, DASH, etc.) has - the more effective the crypto-currency becomes for everyone, as wallet holders can transact with each at a fraction of a cent, & without borders.

No, absolutely not. Currently to get a bitcoin transaction done you have to pay around one or two dollars, so it's actually quite expensive compared to regular banktransfers.

[rkbabang]

The more digital wallet holders the Oracle (Bitcoin, Etherium, DASH, etc.) has - the more effective the crypto-currency becomes for everyone, as wallet holders can transact with each at a fraction of a cent, & without borders.

No, absolutely not. Currently to get a bitcoin transaction done you have to pay around one or two dollars, so it's actually quite expensive compared to regular banktransfers.

 

Yes and in 1996 video over the internet was unrealistic, because if people used the internet at all they connected at 33kbps over their voice lines.  People seem to have a hard time seeing where technology is and extrapolating to where it is going.

[writser]

Yes and in 1996 video over the internet was unrealistic, because if people used the internet at all they connected at 33kbps over their voice lines.  People seem to have a hard time seeing where technology is and extrapolating to where it is going.

 

Also the NASDAQ crashed 75% a few years later because clueless people were buying all cryptocurrencies internet stocks at any price because the technology would change the world.

[rkbabang]

because the technology would change the world.

 

And it did.

 

[clutch]

Yes and in 1996 video over the internet was unrealistic, because if people used the internet at all they connected at 33kbps over their voice lines.  People seem to have a hard time seeing where technology is and extrapolating to where it is going.

 

Also the NASDAQ crashed 75% a few years later because clueless people were buying all cryptocurrencies internet stocks at any price because the technology would change the world.

 

I expect 75% crash would happen with cryptocurrencies at some point, yet its 20-year return could still be very good, much like NASDAQ.

[rkbabang]

Yes and in 1996 video over the internet was unrealistic, because if people used the internet at all they connected at 33kbps over their voice lines.  People seem to have a hard time seeing where technology is and extrapolating to where it is going.

 

Also the NASDAQ crashed 75% a few years later because clueless people were buying all cryptocurrencies internet stocks at any price because the technology would change the world.

 

I expect 75% crash would happen with cryptocurrencies at some point, yet its 20-year return could still be very good, much like NASDAQ.

 

A 90% crash with 90% of the coins going away completely is quite possible in the next few years.  None of that negates any of the potential we have been talking about from being true.

 

[Ballinvarosig Investors]

The more digital wallet holders the Oracle (Bitcoin, Etherium, DASH, etc.) has - the more effective the crypto-currency becomes for everyone, as wallet holders can transact with each at a fraction of a cent, & without borders.

No, absolutely not. Currently to get a bitcoin transaction done you have to pay around one or two dollars, so it's actually quite expensive compared to regular banktransfers.

Also consider the hours/days required for a transfer to complete, also think about the complete lack of built in ability to cater for fraud/chargebacks.

 

I am amazed anyone on this forum is getting suckered into this rubbish.

[rkbabang]

also think about the complete lack of built in ability to cater for fraud/chargebacks.

 

That's a feature not a bug.  It is like cash, not like a credit card.

 

There would be nothing stopping a bank or another company from issuing you credit based on bitcoin.  Charging you interest on your balance and giving you purchase protection.  That isn't what bitcoin is though.  It is the money itself.

 

[Hielko]

The more digital wallet holders the Oracle (Bitcoin, Etherium, DASH, etc.) has - the more effective the crypto-currency becomes for everyone, as wallet holders can transact with each at a fraction of a cent, & without borders.

No, absolutely not. Currently to get a bitcoin transaction done you have to pay around one or two dollars, so it's actually quite expensive compared to regular banktransfers.

 

Yes and in 1996 video over the internet was unrealistic, because if people used the internet at all they connected at 33kbps over their voice lines.  People seem to have a hard time seeing where technology is and extrapolating to where it is going.

Not really. When internet was slow you could envision faster speeds. For some companies it probably didn't happen fast enough (good luck with streaming video in 1996), but that was just inevitable technological progress. How fast it would happen and seeing what would and wouldn't be possible with that was of course the difficult part.

 

Bitcoin (slash other blockchains) main innovation is that you can turn a large amount of computation power into shared trust. That really the core of the idea. The security (shared trust) only works because buying enough computational power to control the network is too expensive. That's why transactions with bitcoin or any other block chain based technology will never ever be cheap. Because if it would be cheap it would imply that the computational power that provides the block chain security would be cheap. And if that would be the case it wouldn't be secure anymore since you could rent computational power somewhere cheap and do what you want.

 

Relative high transaction costs are the defining feature of block chains. It's the only reason it works. There is no clear technological path forward to improve that like you could see faster internet happening. To have shared trust with low transaction costs would require something completely new, and would probably make every existing block chain currency obsolete.

[rkbabang]

The more digital wallet holders the Oracle (Bitcoin, Etherium, DASH, etc.) has - the more effective the crypto-currency becomes for everyone, as wallet holders can transact with each at a fraction of a cent, & without borders.

No, absolutely not. Currently to get a bitcoin transaction done you have to pay around one or two dollars, so it's actually quite expensive compared to regular banktransfers.

 

Yes and in 1996 video over the internet was unrealistic, because if people used the internet at all they connected at 33kbps over their voice lines.  People seem to have a hard time seeing where technology is and extrapolating to where it is going.

Not really. When internet was slow you could envision faster speeds. For some companies it probably didn't happen fast enough (good luck with streaming video in 1996), but that was just inevitable technological progress. How fast it would happen and seeing what would and wouldn't be possible with that was of course the difficult part.

 

Bitcoin (slash other blockchains) main innovation is that you can turn a large amount of computation power into shared trust. That really the core of the idea. The security (shared trust) only works because buying enough computational power to control the network is too expensive. That's why transactions with bitcoin or any other block chain based technology will never ever be cheap. Because if it would be cheap it would imply that the computational power that provides the block chain security would be cheap. And if that would be the case it wouldn't be secure anymore since you could rent computational power somewhere cheap and do what you want.

 

Relative high transaction costs are the defining feature of block chains. It's the only reason it works. There is no clear technological path forward to improve that like you could see faster internet happening. To have shared trust with low transaction costs would require something completely new, and would probably make every existing block chain currency obsolete.

 

That is where off chain transactions come into play.  You don't really need your morning coffee purchase stored for eternity in the block chain.  These problems will be fixed.

[Hielko]

The more digital wallet holders the Oracle (Bitcoin, Etherium, DASH, etc.) has - the more effective the crypto-currency becomes for everyone, as wallet holders can transact with each at a fraction of a cent, & without borders.

No, absolutely not. Currently to get a bitcoin transaction done you have to pay around one or two dollars, so it's actually quite expensive compared to regular banktransfers.

 

Yes and in 1996 video over the internet was unrealistic, because if people used the internet at all they connected at 33kbps over their voice lines.  People seem to have a hard time seeing where technology is and extrapolating to where it is going.

Not really. When internet was slow you could envision faster speeds. For some companies it probably didn't happen fast enough (good luck with streaming video in 1996), but that was just inevitable technological progress. How fast it would happen and seeing what would and wouldn't be possible with that was of course the difficult part.

 

Bitcoin (slash other blockchains) main innovation is that you can turn a large amount of computation power into shared trust. That really the core of the idea. The security (shared trust) only works because buying enough computational power to control the network is too expensive. That's why transactions with bitcoin or any other block chain based technology will never ever be cheap. Because if it would be cheap it would imply that the computational power that provides the block chain security would be cheap. And if that would be the case it wouldn't be secure anymore since you could rent computational power somewhere cheap and do what you want.

 

Relative high transaction costs are the defining feature of block chains. It's the only reason it works. There is no clear technological path forward to improve that like you could see faster internet happening. To have shared trust with low transaction costs would require something completely new, and would probably make every existing block chain currency obsolete.

 

That is where off chain transactions come into play.  You don't really need your morning coffee purchase stored for eternity in the block chain.  These problems will be fixed.

Not really. The $ required to make it secure isn't really related to the number of transactions, but the value of the transactions being processed on the blockchain. I a hypothetical world where there are just a few blockchain transactions/hour attacking those would be just as valuable as a world where there are millions every minute, as long as they are in essence backed by the same amount of economical activity.

 

PS. I'm doing all my transactions already off-chain, seems to work pretty well!

[rkbabang]

I'm doing all my transactions already off-chain, seems to work pretty well!

 

Really?

http://i.imgur.com/oglrpqW.jpg

[Guest Cameron]

I'm doing all my transactions already off-chain, seems to work pretty well!

 

Really?

http://i.imgur.com/oglrpqW.jpg

 

This is called inflation, that's why we invest, the Dow Jones is up 39,900% since the time this chart starts.

[bizaro86]

Having your purchasing power eroded by high transaction costs is not obviously better than having it eroded by inflation. I suppose it depends whether you are using it as a store of value or a currency.

 

[wachtwoord]

Having your purchasing power eroded by high transaction costs is not obviously better than having it eroded by inflation. I suppose it depends whether you are using it as a store of value or a currency.

 

Store of value of course.