Cryptocurrencies

[wachtwoord]

Thank you. That makes sense. Does that mean I need to save my desktop all the time to preserve the downloaded software or it downloads just the bitcoin code in a specific folder so that I can save that folder in an online backup or to a USB?

 

Simple, what you refer to as "Wallet apps" are not wallets.

 

Run Bitcoin core, control your own keys: https://bitcoin.org/en/download

 

Emily, if you run bitcoin core, it downloads the whole blockchain..

"Bitcoin Core initial synchronization will take time and download a lot of data. You should make sure that you have enough bandwidth and storage for the full block chain size (over 145GB)"

 

If you do run bitcoin-core, I think you only need to back up your wallet address and private key to preserve your account. That takes almost no storage space at all. But if you lose that you lose all your bitcoins.

 

Exactly, backup the wallet.dat (but not online this is your money!...). Of course you need to download the entire blockchain otherwise you can't verify anything.

 

Thin wallets (or exchanges) are for people that like trusting third parties only in exchange for some convenience.

[SharperDingaan]

I have just been advised that both the 'Blockchain' and 'Bitcoin' courses were caught up in the Facebook crypto advertising ban, and that they have now been given permission to advertise on Facebook.

 

Little goes viral in academia quite like a formerly banned course - and on social media no less.

I feel so proud!

 

SD

 

Just a quick FYI for those in the Toronto area, with an interest in crypto-token, block chain, smart contracts, etc.

Look at the 'Finance' and 'Innovation' sections.

 

https://learn.utoronto.ca/courses-programs/business-professionals/courses/skill-builder-series

 

SD

[Liberty]

I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary.

 

Sounds like you have the gambling gene. When you notice that, the proper thing to do is to stay away from gambling.

[SharperDingaan]

I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary.

 

Sounds like you have the gambling gene. When you notice that, the proper thing to do is to stay away from gambling.

 

Agreed; you have to control the money - and not allow the money to control you. There are lots of examples of folks who let the money go to their heads, then discovering that it often destroys lives. Victims range from yesterdays plumber suddenly winning the lottery, to celebrities dying from overdoses. Part of tuition - is learning how to deal with wealth (& lack of).

 

SD

 

 

[roughlyright]

I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary. So am trying to see where approx. the bottom may be. One is mining cost that could still go down with lower energy cost and if they end up mining bitcoin more than 21M.

 

Roubini says bitcoin could drop between $20 and $89 (says bubble to the power of 2 or 3). Is this guy reliable?

 

https://www.bloomberg.com/news/videos/2018-02-02/nouriel-roubini-says-bitcoin-is-much-worse-than-tulipmania-video

 

I think there is zero probability that will happen. It will be interesting if Roubini actually puts his money where his mouth is and take this bet with me on longbets site. I am open to anyone who wants to bet with me on this :-)

[no_free_lunch]

Major buy signal for crypto came out today.  :)  Still no position.

 

https://www.bloomberg.com/news/articles/2018-02-07/get-ready-for-most-cryptocurrencies-to-hit-zero-goldman-says

[no_free_lunch]

So, is there a measure of intrinsic value or a floor to bitcoin's value?

 

 

All I know is there are people much smarter than me who can't come to agreement on what it's intrinsic value is.  I think it's proportional to the network of users but what does that even mean? 

 

The floor is something that you can establish, it's 0.  It's just software running on a bunch of computers.  If a better version comes along, it's worthless.

[SharperDingaan]

Just throwing out a guess here - but somewhere between EURO 1-2.

 

It will very likely always be more valuable to the criminal element than a EURO 1 coin - simply because it's annonymous and electronic. How much more will depend on how much someone is trying to buy at the time, and why they are buying. On any given day, anyone in the world trying to hide assets in a divorce proceeding, might quite happily pay 'above market' - in the expectation that even if they end up selling at a loss, it's highly unlikely to be 50%. Therefore a maximum of 2 EURO. 

 

SD

 

[rkbabang]

Is there any good book on Crypto to read?

 

The only books I've read are "Mastering Bitcoin: Unlocking Digital Cryptocurrencies" by Andreas M. Antonopoulos  and

"The Internet of Money" also by Andreas M. Antonopoulos.

 

Both are excellent.  Mastering Bitcoin is more about how bitcoin works and how to use it, where The Internet of Money is a book about the effects the technology will have on the future.  You can pretty much get everything in The Internet of Money by searching for Andreas Anonopoulos on youtube and watching all of his videos.

 

 

[SharperDingaan]

Similarly, what could be an intrinsic or floor value to Ethereum?

 

 

Just throwing out a guess here - but somewhere between EURO 1-2.

 

It will very likely always be more valuable to the criminal element than a EURO 1 coin - simply because it's annonymous and electronic. How much more will depend on how much someone is trying to buy at the time, and why they are buying. On any given day, anyone in the world trying to hide assets in a divorce proceeding, might quite happily pay 'above market' - in the expectation that even if they end up selling at a loss, it's highly unlikely to be 50%. Therefore a maximum of 2 EURO. 

 

SD

 

Best guess is somewhere well under $1. As it exists to facilitate settlement of the consideration portion of a smart-contract, & there is no limit as to how many are issued, its value is really based on how much the miners verification is worth to you. As the smart-contract leaves an audit trail, there's no premium for annonymity.

 

SD

 

 

 

[rkbabang]

There is unlimited supply of Ethereum  as compared to 21M bitcoins? If so, why is Ethereum trading around $1000?

 

Imagine if the federal reserve said that they would create 10 new dollars per year (no more no less) every year from now on.  That would make the supply of USD technically unlimited, but the inflation rate would be almost zero.    There is a fixed amount of ETH created every year so the inflation rate will be smaller and smaller as time goes on and will approach zero over time. Like the $10 new dollars example the new Ether will be so tiny as to not matter.  It is even expected by many to be deflationary eventually as the amount of new coins created may be less than the number of coins lost.  I don't like the fact that it isn't bounded, but it isn't quite as bad as its detractors make it sound.

 

[wachtwoord]

There is unlimited supply of Ethereum  as compared to 21M bitcoins? If so, why is Ethereum trading around $1000?

 

The market is insanely wrong here by about 2 orders of magnitude.

[rkbabang]

It is hard to mine gold as it is a physical process besides painful process of discovering where it is. Printing of dollar bills isn't easy either, lots of decision to make at the government level and then have to physically print the bills.  Where is the resistance to mining unlimited number of Ethereum when no one is regulating them? Who will make sure only fixed amount of Ethereum is created every year? Greed won't stop them.  That is where I am lost. Why Ethereum is even valuable? What problem does Ethereum (or bitcoin) solve?

 

Other people can only explain to you how it works.  As for why it is valuable?  It is valuable for the same reason gold, or diamonds, or baseball cards, or stock in companies, or old coins, or stamps, or antique cars, or rectangular pieces of green paper, or anything else might be valuable...because people are willing to trade other things for it.  Whether or not you want to trade other things for it is a decision only you can make.

 

[SharperDingaan]

There is no central website that tabultes the number of users per cryptocurrency. Altcoin using bitcoin protocol will generally have the same 21M limit as Bitcoin. Token will generally have the ICO total outstanding, but nothing prevents further issuance as the opportunity presents.

 

In theory a miners verification should be worth more than that of a database checking algorithm - so long as a 51% attack isn't possible; however the more obsure the altocoin the less likely this is. The better way to think of these is as 'gift cards' with no expiry date; you give me $5o I give you a prepaid card for $50 - if you dont spend all of it, I'm up the change; but it doesn't change the residual value of your card. If you subsequently just toss the card ('cause you couldn't buy anything with the change), the value is zero.

 

SD

 

Would you agree that all of the things you mentioned have limited supply? The unlimited supply of these cryptocurrencies is the problem that can be mined while you sleep. I am trying to see if Bitcoin is even more valuable despite it's limited supply as not sure what problem it solves (except store of value). Is there a site that tabulates number of users of each cryptocurrency?

 

 

It is hard to mine gold as it is a physical process besides painful process of discovering where it is. Printing of dollar bills isn't easy either, lots of decision to make at the government level and then have to physically print the bills.  Where is the resistance to mining unlimited number of Ethereum when no one is regulating them? Who will make sure only fixed amount of Ethereum is created every year? Greed won't stop them.  That is where I am lost. Why Ethereum is even valuable? What problem does Ethereum (or bitcoin) solve?

 

Other people can only explain to you how it works.  As for why it is valuable?  It is valuable for the same reason gold, or diamonds, or baseball cards, or stock in companies, or old coins, or stamps, or antique cars, or rectangular pieces of green paper, or anything else might be valuable...because people are willing to trade other things for it.  Whether or not you want to trade other things for it is a decision only you can make.

[rkbabang]

Would you agree that all of the things you mentioned have limited supply? The unlimited supply of these cryptocurrencies is the problem that can be mined while you sleep. I am trying to see if Bitcoin is even more valuable despite it's limited supply as not sure what problem it solves (except store of value). Is there a site that tabulates number of users of each cryptocurrency?

 

Most are limited.  Rectangular green pieces of paper are not limited in any way though.  They are printed at the whim of the Fed.  Gold is only limited because we currently have a difficult time finding much more of it.  This may change dramatically when asteroid mining becomes a thing.  What happens when the amount of gold brought to Earth far exceeds all of the gold ever mined here by many times over?  Bitcoin however IS limited.

 

[wachtwoord]

Lol @emily "not sure what problem it solves, except store of value."

 

You're hilarious  ;D

[SharperDingaan]

Re GS article.

At this point you should know enough to recognize that cryptocurrency ISN'T blockchain - it is just ONE of many blockchain applications. Blockchain generally doesn't change output (product or service), it just changes the inputs/process (the pipes) by which to produce it; we don't benefit from new mousetrtaps - it merely costs a lot less to make those that we already have. Very different to most progress where it's always output, better than what was.

 

All crypto is just a 'unit of account' and a payment system. Bitcoin is unique in that it also has TWO 'stores of value' - value to the criminal element, and it's value as 'digital gold'; how much it's worth - is in the eye of the buying beholder. Keep your Bitcoin only at Mt Gox, and you should be pretty safe. As CBDC (e-Krona) enters the picture, most of these will also crash to well < 1$/euro per unit - simply because they aren't backed with the far better 'full faith and credit' of a CB.

 

'Supply' here, also isn't what it 'means' everywhere else. The more it comes from ICO rounds (Etherium), versus entirely mining (Bitcoin), the more of it there is - and the less volatile the pricing. Once Etherrium brings in Casper, Ether will start to price very differently ;)

 

SD

 

 

There isn't anything hilarious about it. I read that Bitcoin is considered as store of value and nothing more. Well, is store of value a problem? May be for drug dealers, tax evaders and so on. Bitcoin isn't safer to store than other means either. But among every other cryptocurrency, Bitcoin is the only one that is in limited supply and may have some value (but not at these astronomical prices). Just my opinion as I educate myself on it.

 

“We believe that the crucial question underpinning the real value of cryptocurrencies themselves, is what economic problem they actually solve?” said Allison Nathan, a senior strategist of global investment research at Goldman Sachs, in a new video released by the bank. “As a currency, cryptos can often seem like a solution in search of a problem.”

 

http://fortune.com/2018/02/21/bitcoin-cryptocurrency-buy-goldman-sachs/

[SharperDingaan]

Basically ... if I can pay for any transaction with a CBDC (e-Krona, e-$, etc.) - what do I need the altcoin for?

The altcoin becomes akin to a $Z - very nominal value IF you can find someone willing to accept them, and pay with a wheelbarrow full - or 1 CBDC. Bitcoin and Etherium (post Casper) are probably exceptions, primarily because there is at least some real use for them.

 

Ether has value because anyone using the Etherium network can use Ether to settle transactions created via the Etherium smart-contract writer. Etherium is esentially a high security cloud provider of blockchain smart-contract applications running on a distributed ledger, in a private network. As long as a users transaction volume is small, and the network keeps expanding (increasing its value to all), it's an excelent sandbox to protoype new applications on; hence there is an actual functional purpose (& demand) for Ether.

 

The FI crypto will very likely be determined by whatever the R3 Consortium chooses to use. GS would like it to be their patented SETLCoin, others would prefer something more akin to a global CBDC. It will also very likely be a 'private' - versus 'public' currency that you or I can buy.

 

Rather than spreading your research 'wide', you might want to focus on Etherium.

Understand how Ether is issued today, the relative merits of Etherium itself, and what would change were Casper implemented. Then assess against comparable altcoin, to develop an investment thesis - it might well put you through school. Obviously do your own DD, we are not making an investment recommendation.

 

SD

 

 

Always insightful.

 

Most of these will crash? You mean ICO’s or Bitcoin/Ethereum? or all?

“As CBDC (e-Krona) enters the picture, most of these will also crash to well < 1$/euro per unit - simply because they aren't backed with the far better 'full faith and credit' of a CB.”

 

 

You mean Ethereum becomes less valuable? Why? I tried to look up on Google but didn't quite get it.

“Once Ethereum brings in Casper, Ether will start to price very differently”

 

 

Which of the crypto , do you see most widely used in the banking/financial/consumer sector? That is why I was asking for data on number of users .

[SnarkyPuppy]

Re GS article.

At this point you should know enough to recognize that cryptocurrency ISN'T blockchain - it is just ONE of many blockchain applications. Blockchain generally doesn't change output (product or service), it just changes the inputs/process (the pipes) by which to produce it; we don't benefit from new mousetrtaps - it merely costs a lot less to make those that we already have. Very different to most progress where it's always output, better than what was.

 

All crypto is just a 'unit of account' and a payment system. Bitcoin is unique in that it also has TWO 'stores of value' - value to the criminal element, and it's value as 'digital gold'; how much it's worth - is in the eye of the buying beholder. Keep your Bitcoin only at Mt Gox, and you should be pretty safe. As CBDC (e-Krona) enters the picture, most of these will also crash to well < 1$/euro per unit - simply because they aren't backed with the far better 'full faith and credit' of a CB.

 

'Supply' here, also isn't what it 'means' everywhere else. The more it comes from ICO rounds (Etherium), versus entirely mining (Bitcoin), the more of it there is - and the less volatile the pricing. Once Etherrium brings in Casper, Ether will start to price very differently ;)

 

SD

 

 

There isn't anything hilarious about it. I read that Bitcoin is considered as store of value and nothing more. Well, is store of value a problem? May be for drug dealers, tax evaders and so on. Bitcoin isn't safer to store than other means either. But among every other cryptocurrency, Bitcoin is the only one that is in limited supply and may have some value (but not at these astronomical prices). Just my opinion as I educate myself on it.

 

“We believe that the crucial question underpinning the real value of cryptocurrencies themselves, is what economic problem they actually solve?” said Allison Nathan, a senior strategist of global investment research at Goldman Sachs, in a new video released by the bank. “As a currency, cryptos can often seem like a solution in search of a problem.”

 

http://fortune.com/2018/02/21/bitcoin-cryptocurrency-buy-goldman-sachs/

 

I'm struggling here.  In almost every post you've made I always walk away stunned at how well thought out and forward looking your thoughts are.  Except when you reference central banks issuing their own cryptocurrencies rendering non-sovereign decentralized cryptocurrencies worthless. 

 

Surely you understand that the most attractive element of bitcoin or ethereum is its separation from authoritative governance?  It's critical that a government cannot modify the supply and its critical that the cryptocurrency is censorship resistance (i.e. difficult to seize).  That's the value... 

[SharperDingaan]

Etheriums network creates users for Ether; the bigger the network, the more demand for Ether.

A company uses the Etherium network because it wants to use its tools to build and test out its own smart-contract blockchain applications. Once the concept has been proved with a working application, they decide their next steps. Hence Etherium is essentially an agile project management facility that allows participants to test - without having to first risk a fortune on an uncertain IT setup. A very attractive value proposition.

 

A CBDC is just a 'digital dollar' - a CB creates/runs it; but anyone can use it, the same as anyone can use a 'paper' dollar.

Most altcoin is created to pay for transactions within a specified group of users; 'cause by accepting 'this' altcoin, we can sell a ton of it today and use the proceeds to collectively develop the business (essentially seignorage). But if I can pay with a CBDC the recipient can spend that CBDC anywhere; if I pay with Altcoin the recipient can only use it within the group of users. Hence if the user groups business is fairing poorer than the economy overall (most cases), the last thing a recipient wants is this restrictive altcoin. The altcoin 'devalues' relative to CBDC, and gets their via a 'price' collapse.

 

SD

 

[SnarkyPuppy]

SD, thank you. I am not as smart as all of you but what I am taking away from this discussion is that Ethereum may be even more valuable than Bitcoin. Is there an ETF on Ethereum that I can use to buy in my retirement portfolio as using Coinbase is not an option. BTCS ETF is only for bitcoins and requires 30% premium as rkbabang pointed out.

 

Might want to have a reread if that's your takeaway...

[wachtwoord]

If you invested this much time into researching the crypto space and you think ethereum is (or "might be") more valuable than bitcoin then the crypto segment definitely lies lies outside your circle of competence.

[rkbabang]

SP, can you please elaborate? What is your takeaway?

 

SD, thank you. I am not as smart as all of you but what I am taking away from this discussion is that Ethereum may be even more valuable than Bitcoin. Is there an ETF on Ethereum that I can use to buy in my retirement portfolio as using Coinbase is not an option. BTCS ETF is only for bitcoins and requires 30% premium as rkbabang pointed out.

 

Might want to have a reread if that's your takeaway...

 

I haven't read anyone here lately saying ETH should be worth more than BTC. I certainly don't think so.  I still hold some ETH which I bought before even the DAO fiasco, but I am looking for a good time to convert it to BTC.  I think that there will be some undue excitement at first in the Etherium community when Casper comes online and I think that it is likely that the ETH/BTC price ratio goes up for a little while because of that.  When/if this happens I will convert most or probably all of the ETH I have left to BTC.  If the price doesn't shoot up I will still probably convert it anyway. If I was to buy more of anything right now I would buy BTC.  That's just my opinion and my current plan.

 

[wachtwoord]

Go back some pages to January and read the paper I shared here. I'm sorry but you don't seem to understand any of this.

 

Try to figure out why gold has value (don't try to value it!) and you might get somewhere.

[SnarkyPuppy]

Go back some pages to January and read the paper I shared here. I'm sorry but you don't seem to understand any of this.

 

Try to figure out why gold has value (don't try to value it!) and you might get somewhere.

 

I'd strongly distinguish between understanding and trying to understand.  The paper you link hypothesizes some answers to these questions.  We can discuss the details of those topics - but it seems obvious the question Emily wants us to answer is "what coin can I buy to get rich?"