Cryptocurrencies

[DeepSouth]

So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

 

No. You have to decide if you need the 'super security' of Bitcoin.

If you do need it, pay up for the product offered - 'super security'. If you don't need it - why are you in Bitcoin?

If Bitcoin is a 'investment', this is just the transaction fee. No different to the realtors commission when buying a house.

 

SD

 

Couldn't Xi Jingping destroy bitcoin's security by nationalizing all Chinese mining power?

 

Nation states have huge piles of money and weapons and often do crazy destructive things.  So while the answer to that is yes.  I think that would only serve to destroy bitcoin rather than control it.  People would move on to another cryptocurrency if they did that as no one wants a cryptocurrency controlled by any nation state not just China.

 

So instead of being a trustless protocol, bitcoin's existence relies on placing your complete trust that an authoritarian dictator doesn't won't ever decide to destroy it. I thought the key selling point of this was that crypto holders don't trust government?

 

So we sacrifice speed or cost of transactions in order to gain security, but it's not that secure for the average man on the street who doesn't understand all the steps to ensure their private key isn't hacked and on a protocol basis it's not secure because it could be destroyed by a single memo from the Chinese politburo.

 

I'll readily admit I'm not an expert but the cost/benefit of that asset over gold, TIPS, T-bills, etc seems pretty shoddy. I'm long and I've realized solid gains because most of the zealots seem to have a religious devotion to it therefore the flow of funds should be bullish, but it's hard for me to really understand the appeal.

 

It would cost a fortune (even for a nation state) to do this and because the target would be destroyed in the process, nothing would be accomplished.    Of course those exact words could describe the US foreign policy so who knows?

 

I expect to see central banks eventually adding BTC to their reserves along side gold, not trying to destroy it.

 

It wouldn't cost the state anything; the Chinese state could simply expropriate the assets of Chinese miners and would immediately control >50% of mining power. Do you believe that the Chinese government is unwilling to expropriate resources?

 

And yes, the target could be destroyed in the process, that would be the purpose. If cryptocurrencies are a threat to governments' control of their citizens then destruction of them is an accomplishment for said governments.

 

This is one of the things I don't really get about many cryptohodlers. They simultaneously believe that governments are rapacious totalitarians, crypto is a way for them to subvert government, and  yet government will treat them lovingly by buying up their crypto at market value. These ideas seem mutually exclusive.

[wachtwoord]

My advice: use 2-factor authentication (with 2 independent factors. SMS is generally non-secure). Secondly I'd advice to keep any funds on the exchange only for the duration of the trade and withdraw it right after. This also mitigates counter party risk (exchanges have stolen or been hacked themselves relatively often).

 

Assuming you use a strong password on both the exchange and your email account the most common attack is social engineering: the hacker contacts a 3rd party (email provider or exchange) claiming he's you and that he wishes to change his password. For your email pick a third party who's least likely to cave for such a social engineering attack (? Any idea who?) or run a email server locally yourself (of course that increases the likelihood of the mail server itself getting hacked as e.g. google is better at security than you are).

 

Mitigating social engineering attacks is difficult. Don't become a target by keeping your affairs private.

[Liberty]

https://hackernoon.com/extortion-police-raids-and-secrecy-inside-the-venezuelan-bitcoin-mining-world-6e97a25e7402

[rkbabang]

My advice: use 2-factor authentication (with 2 independent factors. SMS is generally non-secure). Secondly I'd advice to keep any funds on the exchange only for the duration of the trade and withdraw it right after. This also mitigates counter party risk (exchanges have stolen or been hacked themselves relatively often).

 

Assuming you use a strong password on both the exchange and your email account the most common attack is social engineering: the hacker contacts a 3rd party (email provider or exchange) claiming he's you and that he wishes to change his password. For your email pick a third party who's least likely to cave for such a social engineering attack (? Any idea who?) or run a email server locally yourself (of course that increases the likelihood of the mail server itself getting hacked as e.g. google is better at security than you are).

 

Mitigating social engineering attacks is difficult. Don't become a target by keeping your affairs private.

 

And the most common hacking method is phishing attacks.  i.e. a fake message which looks like it from an institution you do business with asking you to click a link and log in to your account. Do not click on links from emails.  If Coinbase sends you an email to log into your account it probably isn't really from them.  Always type the address into your browser and bookmark it or use the mobile app.  This all goes for your brokerage and bank accounts as well.  If you have a policy of never clicking on a link from an email you will be safe from these types of attacks.

 

[NeverLoseMoney]

Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

 

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

 

I thought this was an interesting video about this issue:

https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE

 

Why would I be concerned? Don't touch Tether with a 5-foot pole and you'll be fine (it's 100% a scam).

 

The theory is that they are “printing” thether out of nothing and using it to buy bitcoin, thus inflating the price of bitcoin far above its actual demand. I’m not sure how much of the bitcoin demand is tether related, but long term it means nothing either way.

 

That's only the Thether Bitcoin price. Not USD/BTC. It has no effect other than some fools parting with their money.

An interesting piece of research: http://www.tetherreport.com/.

 

"Summary

Author’s opinion - it is highly unlikely that Tether is growing through any organic business process, rather that they are printing in response to market conditions.

 

Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied occurred in the two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet.

 

Bitfinex withdrawal/deposit statistics are unusual and would give rise to further scrutiny in a typical accounting environment.

 

If there is questionable activity, the author believes a 30-80% reduction in BTC price could be forecast."

[Liberty]

"Coincheck Says It Lost Crypto Coins Valued at About $400 Million"

 

Oops I guess.

[SnarkyPuppy]

Not sure the point of the continued anectodal links^.  Yes it's the Wild West right now - don't store your money on an exchange.  Day 1 stuff. 

 

With that said-  to the bulls who have more experience in this than I do:

 

What are your views on the 5 year and 15 year time horizon of bitcoin if the United Stayes completely hammers down on bitcoin - ie closes coinbase, banks required to stop bitcoin payments (ala poker), bitcoin atms shutdown.  Obviously the price gets crushed short term, but longer term how does bitcoin truly recover from a complete US ban?  And then even more extreme (although less likely) how does bitcoin come back from a coordinated G20 action similar to the above?  More curious about the US only scenario as I think it's very low probability various countries can truly coordinate on this

[Liberty]

Not sure the point of the continued anectodal links^.

 

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.

[SnarkyPuppy]

Not sure the point of the continued anectodal links^.

 

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.

 

So your opinion is that that the worlds first judgment resistant + trustless asset isn't worth anything?

[roughlyright]

SnarkyPuppy,

 

Are there any Altcoins that you are bullish on?

 

Roughlyright

[Spekulatius]

Rework the numbers when the value of the token is FALLING, and this falls apart rapidly. Even if you've paid for your rig, the incremental electricity cost of running it will exceed the value of the token earned. You would stop mining and enjoy some awesome video instead.

 

We know that Bitcoin has long-term value, the market will be volatile, and that 'mania' is a limited term engagement.

Perhaps the smartest thing is to simply sell it into the rallies, park the proceeds in treasuries, and buy it back < 500-1000?

 

SD

 

I thought you first entry point was $7000 for bitcoin, why $500-1000? Why not $100 or $10?

 

While I agree that a lot of money can be made playing the rallies or the busts, the lack of intrinsic value for any crypto currencies makes it hard to get entry or exit pointe for three tokens.

[SharperDingaan]

Rework the numbers when the value of the token is FALLING, and this falls apart rapidly. Even if you've paid for your rig, the incremental electricity cost of running it will exceed the value of the token earned. You would stop mining and enjoy some awesome video instead.

 

We know that Bitcoin has long-term value, the market will be volatile, and that 'mania' is a limited term engagement.

Perhaps the smartest thing is to simply sell it into the rallies, park the proceeds in treasuries, and buy it back < 500-1000?

 

SD

 

I thought you first entry point was $7000 for bitcoin, why $500-1000? Why not $100 or $10?

 

While I agree that a lot of money can be made playing the rallies or the busts, the lack of intrinsic value for any crypto currencies makes it hard to get entry or exit pointe for three tokens.

 

There's no real entry 'price'. All you can do is try and guess if the current price is low enough to draw in sufficient numbers of bargain hunters, willing to drive the price up - in the belief that the current price is cheap. The  entry point could just as easily be $5,000 or $10,000. Value investing is also quite good practice for it - as supposedly we are better at 'seeing' value where others do not.

 

SD

 

 

[no_free_lunch]

Rework the numbers when the value of the token is FALLING, and this falls apart rapidly. Even if you've paid for your rig, the incremental electricity cost of running it will exceed the value of the token earned. You would stop mining and enjoy some awesome video instead.

 

We know that Bitcoin has long-term value, the market will be volatile, and that 'mania' is a limited term engagement.

Perhaps the smartest thing is to simply sell it into the rallies, park the proceeds in treasuries, and buy it back < 500-1000?

 

SD

 

I thought you first entry point was $7000 for bitcoin, why $500-1000? Why not $100 or $10?

 

While I agree that a lot of money can be made playing the rallies or the busts, the lack of intrinsic value for any crypto currencies makes it hard to get entry or exit pointe for three tokens.

 

I have to agree with you on this.  Bitcoin is either worth an awful lot or perhaps very little.  It's value is roughly proportional (exponentially / log proportional even) to the number of miners.  If something replaces it and the miner community gets sharply reduced I am not sure if it would have that much value.

 

The big issue that is talked about and never addressed is all this electricity that gets wasted on the mining.  I don't see why that can't be resolved.  I think the only solution is some type of proof of work / stake where that mining isn't completely useless as bitcoin's is.  I don't see why the mining couldn't actually be for a purpose.  Much harder to architect but then you aren't wasting the electricity.  Some of the newer coins are trying to address this, I could see them taking over.  If that happens, and the miners start going to new coins, the bitcoin network could fall apart.

[gary17]

If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

[Liberty]

Not sure the point of the continued anectodal links^.

 

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.

 

So your opinion is that that the worlds first judgment resistant + trustless asset isn't worth anything?

 

I didn't say anything of the sort.

[SnarkyPuppy]

Not sure the point of the continued anectodal links^.

 

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.

 

So your opinion is that that the worlds first judgment resistant + trustless asset isn't worth anything?

 

I didn't say anything of the sort.

 

Sorry - the way I phrased that definitely implied that I already knew your opinion.  Was moreso genuinely curious about your longer term views w/ respect to the store of value thesis. 

[SharperDingaan]

If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

 

The major 'investables' are IBM - offering scaleable (DB) block chain on the cloud, and Etherium offering blockchain on a distributed ledger. Most of this is done via joint ventures, not using outside money.

 

SD

 

[Liberty]

[Liberty]

Sorry - the way I phrased that definitely implied that I already knew your opinion.  Was moreso genuinely curious about your longer term views w/ respect to the store of value thesis.

 

There's a lot that is technically interesting, though I think that's probably overhyped at this point. There's also a lot that is incredibly worrying, wrt to the amount of fraud and scams and BS flying at high velocity. Looks like Tether might be a giant fraud that might blow up a lot more than just itself later on since so much of it is recycled into other things...

 

I've been interested in cryptography since the late 1990s, I've first looked into BTC and cryptocurrencies in 2011. It's interesting stuff for sure, but the mania around it is getting tiresome.

 

It's mostly getting a lot of attention because of the price action, not so much because of any actual products or problems that are being solved, which is always worrying.

 

There's some stuff in there that I agree with:

 

http://www.investorfieldguide.com/preston/

 

I prefer investing to speculating anyway (I don't have that gambler gene -- don't get pleasure out of it even if I win), so I keep an eye on it for the entertainment value. Or I might change my mind at any point as I gather more info, but so far I'm following it the same way I follow CPU architectures and EV technology.

[no_free_lunch]

If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

 

That makes sense for some crypto's but for bitcoin it is mostly ASIC.  Haven't ever actually mined but that is what they say.  I don't think you can do ether with ASIC so your thesis might hold up if ether takes over.

 

[rkbabang]

If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

 

That makes sense for some crypto's but for bitcoin it is mostly ASIC.  Haven't ever actually mined but that is what they say.  I don't think you can do ether with ASIC so your thesis might hold up if ether takes over.

 

 

 

Correct.  If I were to invest in NVDA or AMD it would be because of AI/Deep learning not because of mining.  There are ASICs for other algorithms now too, not just Bitcoin's SHA-256 algorithm.  Here's an example of an ASIC based system to mine Scrypt coins such as Litecoin:

https://shop.bitmain.com/antminer_l3_litecoin_asic_scrypt_miner.htm?flag=overview

 

It's only a matter of time before other algorithms have custom chips available as well.

 

[Liberty]

Funny, I was just writing about this here 2 days ago...

 

https://www.bloomberg.com/news/articles/2018-01-30/crypto-exchange-bitfinex-tether-said-to-get-subpoenaed-by-cftc

 

https://twitter.com/Bitfinexed/status/958420215301394432

 

Also:

 

https://www.recode.net/2018/1/30/16950926/facebook-mark-zuckerberg-bans-crypto-advertising-bitcoin-james-altucher

[Liberty]

https://www.bloomberg.com/news/articles/2018-01-30/sec-seeks-to-freeze-crypto-assets-of-600-million-coin-offering

[SharperDingaan]

https://www.bloomberg.com/news/articles/2018-01-30/sec-seeks-to-freeze-crypto-assets-of-600-million-coin-offering

 

The ICO itself very likely wasn't illegal, simply because there are no real crypto laws to break at present.

What was probably illegal were the statements made around it (FDIC insured bank, Visa, etc.), and the presence of a C-Suite individual on probation for felony theft. Can't claim the bank and pipes stuff until AFTER you've bought the bank.

 

SD

 

[SharperDingaan]

Is Etherium better to invest in for long term or Bitcoin ? I read a paper that was posted here says Bitcoin was better blockchain technology but then I read great things about Etherium too.

 

You need to be very clear on WHY you're investing in this.

 

In the long-term - a holding of Bitcoin is probably a worthwhile thing. You will have some wealth that is always portable, no matter what happens to you. You will also have experience in what will probably become a 'core' crypto coin (complete with futures & options markets). It does not mean buy it today.

 

In the nearer term, Etherium will make you familiar with how blockchain smart contract solutions can be applied across many different applications - but Ether token is not a substitute for Etherium stock (it's private). The solutions are where the money is, and the beneficiaries are the companies applying them (some of which are public). The downside is that distributed ledger applications have scaling limitations.

 

To 'make' wealth one  concentrates - to 'preserve' wealth one diversifies. To 'make' wealth in this game, you need to be a partner in a JV building a blockchain smart contract solution. If that's part of the plan - Etherium is probably the better choice.

 

Notable is that it cannot be decided by conventional investment 'metrics'

They don't exist yet.

 

SD