Cryptocurrency

[thebruce44]

This is a break of from the Investment thread to focus more specifically on Crypto technology and investment.

 

Today was a good day, with ETH rising over 10% and many alt coins doing even better. BTC is being drug up as well.

 

If history repeats itself, we are entering the strong bull run to close out the year. Most coins are still below the all time highs they hit a couple months back, but the recent increases are very encouraging.

 

*As a general disclaimer, nobody should disclose how much they own or have invested and none of this is investment advise- these markets are very volatile.

[nate82]

I am really liking the coin Cardano and that is my new long coin to hold. Currently trading under $3 a coin.

[GAME05]

Not referring to TheBruce at all with this, but what I see all the time is how crypto is on a four-year cycle, or how now is the "alt-coin season." To me this just screams predicting the market based on what is really a very young lifespan of crypto. Just a few months ago everyone was saying how four years ago the market was up/down at these points and therefore it'll be the same now. At this point, early enough in my crypto-trading life, I see nothing supporting this apart from coincidence.

 

Or even more so I see so many price-prediction videos where they're only putting a Fibonacci chart over the top but not telling you why that particular coin is better than the rest or why there's a market need for it. If Fibonacci were some guaranteed thing, you could just write a trading bot which follows it and be rich.

 

I have the dual-authentication on Coinbase Pro but I've reached an amount of money where I think I also need a wallet. I guess there's online ones, though what's to say a bad virus doesn't also steal that. I don't love the idea of having a little USB stick worth $~~~~, but I guess it is what it is. But I suppose keeping it in the police evidence locker at work is about as safe a place as can be.

Edited September 2, 2021 by GAME05

[GAME05]

Not that I want anyone to get hurt, but in an odd way I really am looking for the trend to continue and the bottom to fall out of the market, when everyone says crypto is dead and worthless. Bitcoin purchased 365 days ago is almost exactly 4x today, 5x if 2019 and 6.7x in 2018. It would mean almost four years of little/no returns, but presuming the peak happens again, that's an amazing amount of money to be made. Just looking at the charts of the other coins from November of last year almost makes you sick if you didn't get in at that point (which I didn't).

 

Granted, I guess a lot of new coins are nothing more than scams or pump-and-dumps taking advantage of the hype. And I guess with Coinbase being on the Exchange now, there's an expectation that they'll expand their offerings and one can become exposed to a lot more brand new offerings.

[thebruce44]

I am really liking the coin Cardano and that is my new long coin to hold. Currently trading under $3 a coin.

 

.13 to 3 this year. Pretty amazing.

 

I am not a fan of ADA long term as I don't trust it's founder. I am happy for those that have invested in the project though and am seeing these returns.

[PlayerHader]

I bought several hundred dollars of BTC early last summer when it was at around $8500. I added to that over time, but I haven't had the guts to keep it in long enough, so I didn't realize the all time highs. I believe in the upside of crypto...but I don't know if I have the difference to play the long game.

[LouisEly]

I am really liking the coin Cardano and that is my new long coin to hold. Currently trading under $3 a coin.

This is one of the main reasons I don't invest in crypto - there is no protective moat. Anybody can make them.

 

That's the one big difference with the gold comparison - gold has a big protective moat. You can't make it.

[thebruce44]

I am really liking the coin Cardano and that is my new long coin to hold. Currently trading under $3 a coin.

This is one of the main reasons I don't invest in crypto - there is no protective moat. Anybody can make them.

 

That's the one big difference with the gold comparison - gold has a big protective moat. You can't make it.

 

Can you elaborate on this thought and how it applies to Cardano? While I am not a fan of Charlies Hoskinson's shilling, it would be incorrect to say that he is not insanely intelligent. He isn't just "anybody."

[homer]

I'm long, long on crypto. I'm treating it like gold in that it will never be more than 3% of my total portfolio. I dollar cost average due to the massive volatility and only invest the bigger coins - the vast majority in ETH which I think has real-world utility even if the "currency" side of things never takes hold (which I have major doubts it ever will).

[GAME05]

There's a hardware invention missing yet. Something like a credit card which would do the bitcoin-to-cash conversion for you automatically for a fee and work like a credit/debit card.

 

When this little 'event' ends and the crypto market tanks again, my plan is to put a sizeable percentage into it with the plan to just bury it for four years. Then with play money going off Coinbase with a hardware wallet and going for some of the newest coins. Way higher risk/reward, though.

[nate82]

This is one of the main reasons I don't invest in crypto - there is no protective moat. Anybody can make them.

 

That's the one big difference with the gold comparison - gold has a big protective moat. You can't make it.

 

It is no different than investing in any other stock out there. While we can't make more gold on our planet we can definitely mine it on asteroids and possibly other planets like Mars. So while gold has a big protective moat right now that may not be true in the future how far in the future I have no idea.

[LouisEly]

Can you elaborate on this thought and how it applies to Cardano? While I am not a fan of Charlies Hoskinson's shilling, it would be incorrect to say that he is not insanely intelligent. He isn't just "anybody."

It's not specific to Cardano, it's that there is nothing to keep very intelligent people from making one and five years from now there will be a dozen more on the market and way more supply than demand.

 

And if they don't figure out how to cancel it in the event of ransoms, they will soon be either banned or replaced.

[GAME05]

Does anyone here actually mine crypto? Based on the articles I've read (for what that's worth) it takes about eight months to reach the break-even point. Looks like companies sell rigs designed for it and they don't necessarily take up a whole room (just depends on how much you're looking to make). But it does strike me as a good potential passive income source. Granted, I have a particular barrier in that I don't know anything about computers and would have to find somebody I could pay to set it up and teach me.

[greeg35]

I invested an amount of money I wouldn't miss in various cryptos last spring. I teach high school econ and some of my students are all over it or have questions, so I look at it as continuing ed

 

I was shocked at how many different crypto options there are, and it remains difficult for me to differentiate their actual functions, many are etherium based. I also noticed how the entire group of them seemed to rise and fall with Bitcoin. This is troubling to me and I'm still not sure what to make of it. Is the entire crypto universe susceptible to automated investment algorithms that large numbers of investors employ? China's big impact in early summer was troublesome as well.

 

Anyway, when I first got into it I tried to find a crypto that was doing something different or doing it differently. I zeroed in on Algorand initially and it remains the only one I'm still invested in currently (got rid of others and consolidated in ALGO). I liked it because it was built differently than other crypto, had interesting uses, boasted comparatively fast cheap and secure transactions, and claimed to be carbon negative.

 

Earlier this year it was selected by el Salvador to build it's new Bitcoin based economy on. That is going live this week. Interestingly, it is doing well this week so far, when others (including Bitcoin) have retracted a bit. We'll see if that separation and growth continues, especially if volatile el Salvador struggles. They are reportedly heavily marketing to other countries as well. I'll be watching closely.

[owbc]

There's a hardware invention missing yet. Something like a credit card which would do the bitcoin-to-cash conversion for you automatically for a fee and work like a credit/debit card.

 

To me that's the big mystery -- what problem is crypto trying to solve? Certainly not banking transactions since the current system processes a billion of them per day quite efficiently while crypto is doing a couple hundred thousand at a prohibitive cost per transaction. This is quickly apparent if you actually try and create your own wallet and buy bitcoin with cash. Almost nobody does this because it's easier to just "buy" crypto credits with Robinhood or Coinbase.

 

Anyway, that's all totally fine, there is plenty of profit to be made and you just have to jump ship before the whole thing crashes down. Buy the dip and HODL!

[KCBrewerfan34]

I’m a big Crypto guy. Happy to discuss anytime. ADA is my biggest holding, I fully believe in Hoskinson. He’s brilliant.

[thebruce44]

I invested an amount of money I wouldn't miss in various cryptos last spring. I teach high school econ and some of my students are all over it or have questions, so I look at it as continuing ed

 

I was shocked at how many different crypto options there are, and it remains difficult for me to differentiate their actual functions, many are etherium based. I also noticed how the entire group of them seemed to rise and fall with Bitcoin. This is troubling to me and I'm still not sure what to make of it. Is the entire crypto universe susceptible to automated investment algorithms that large numbers of investors employ? China's big impact in early summer was troublesome as well.

 

Anyway, when I first got into it I tried to find a crypto that was doing something different or doing it differently. I zeroed in on Algorand initially and it remains the only one I'm still invested in currently (got rid of others and consolidated in ALGO). I liked it because it was built differently than other crypto, had interesting uses, boasted comparatively fast cheap and secure transactions, and claimed to be carbon negative.

 

Earlier this year it was selected by el Salvador to build it's new Bitcoin based economy on. That is going live this week. Interestingly, it is doing well this week so far, when others (including Bitcoin) have retracted a bit. We'll see if that separation and growth continues, especially if volatile el Salvador struggles. They are reportedly heavily marketing to other countries as well. I'll be watching closely.

 

Based on the bold part above, you are doing better than most newish investors and teaching your students well by example.

 

Regarding your other questions, yes- everything at the moment it tied to BTC and its cycles. Altcoins also rise and fall based on BTC for a variety of reasons- I'd be stupid to try to explain my understanding of this to you since you are an econ teacher. My expectation is that we will see ETH pass BTC sometime in late 2022 or early 2023 and the volatility will calm down.

[thebruce44]

There's a hardware invention missing yet. Something like a credit card which would do the bitcoin-to-cash conversion for you automatically for a fee and work like a credit/debit card.

 

To me that's the big mystery -- what problem is crypto trying to solve? Certainly not banking transactions since the current system processes a billion of them per day quite efficiently while crypto is doing a couple hundred thousand at a prohibitive cost per transaction. This is quickly apparent if you actually try and create your own wallet and buy bitcoin with cash. Almost nobody does this because it's easier to just "buy" crypto credits with Robinhood or Coinbase.

 

Anyway, that's all totally fine, there is plenty of profit to be made and you just have to jump ship before the whole thing crashes down. Buy the dip and HODL!

 

The message attached to the BTC genesis block reads: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks. Hopefully that helps answer your question of what cypto is trying to solve. We can certainly argue how effective BTC is solving the issue currently, but that is a separate discussion.

[GAME05]

(not claiming to be an expert, but writing about it helps my own understanding)

 

Bitcoin was started in 2008 because of the mortgage crisis tanking the economy. The problem it's trying to address is the power that centralized authorities have on the value of fiat currency. Today that might extend to printing trillions of dollars or national debt. Bitcoin folks would probably show you the Zimbabwe trillion dollar bill as one example of why bitcoin is better. It's also why bitcoin was started with a finite number of coins available to prevent inflation.

 

And then the decentralized wave hit other avenues like applications on the internet because some issues are similar. We're entrusting most all of our information to giant companies like Google and Facebook, whereas storing our information on the decentralized blockchain is out of their control.

 

Not sure why or how, but I do hear blockchain advocates say that transmitting data on the blockchain is faster and more secure than traditional methods, and that transactions should also be cheaper.

 

And the new hot thing is NFTs, of attaching a coin to intellectual property (art, music) as well as video game property (the rare sword you just got in a loot crate, or valuable property you control in a massive multiplayer online game). That coin signifies ownership and also allows you to sell that property to someone else. There's also programs out there now which will allow people to gamble on another's or your own video game--the program creates a $5 coin (or whatever denomination) which is transferred to the winner of the bet and also takes a gas fee (transaction fee).

[greeg35]

"I'd be stupid to try to explain my understanding of this to you since you are an econ teacher. "

 

Please, explain away! The econ I teach is 2 units to freshman in their survey course and we aren't teaching crypto directly (yet) although it comes up a lot when we cover the basics of fiat currency. I am definitely a learner in this space (and all spaces really).

[nate82]

Block chain which is the same as crypto is being incorporated into every single major bank in the US and there is a reason for this. Block chain is far more secure than what the banks are using now.

 

Even the closed networks like the one American Express has is not as secure as block chain is. There are also some small benefits to cost saving by going to block chain.

 

Crypto is still in its infancy and is still growing. I don't believe this is the final state of crypto. What crypto will look like in 10-years is still fairly unknown it could change completely from a currency to a financial instrument where credit is tied to.

 

There are a lot of different avenues that crypto could go down.

[GAME05]

I'm not even sure Bitcoin is going to be the one coin that's primarily used as currency. It won because it was first past the post, but there has got to be better programs out there for currency. Plus El Salvador aside, the regions you'd really need for mass adoption like the US and EU, are likely going to be last to really adopt it because they have the most stable currency. Buying a Snickers with Bitcoin in Wisconsin is still probably 20 years away.

[GAME05]

Thoughts for no reason other than to think out loud as I learn this very different thing from regular stock trading, Youtube, and maybe if someone tells me I'm terribly wrong which I'd appreciate:

 

Ellio Trades is a popular Youtube channel, but he's one of those "everything is wonderful every day" sorta people who does nothing but blow smoke up your rear. I suspect he just invests heavily in whatever he's about to pump that day and then takes the percentage increase from his subscribers all jumping on.

 

BitBoy Crypto is a little more down to earth, but they only ever say "This coin is great!" only once it's gone up 20% and you'd be buying high, so therefore what's the value in the channel?

 

It seems impossible to find anyone who doesn't just look at the charts and tell you it's going up based on the Fibonacci Sequence and all that jazz, none of which I believe in. It's halfway impossible to find anyone who will tell you why any certain crypto is a good project and meets a market need. If stocks only went up or down based on moving averages, a bot would make everyone rich, but that's certainly not the case. Pretty convenient that when their predictions don't work, they just don't make another video admitting they're wrong.

 

That said, one Youtube channel I'm starting to somewhat like is "Alex Becker's Channel". He seems big into investing in new projects after they initially dip, but it's beyond my knowledge on how to even get into those things. If they're not on Coinbase Pro I don't know how to do it. But beyond that these seem to be some of his/my takeaways:

 

--Being that crypto is a bigger win/lose gain/loss risk than the regular market, why invest in lower-gain-potential coins like Bitcoin and Ethereum?

 

--Ethereum's gas fees (transaction fees) are outrageous. Nobody will pay a $5 gas fee for a $5 item. There is still value in it now based on hype, but it won't last long-term.

 

--Gaming and NFT crypto projects provide a more immediate use case than currency-based ones, and therefore have a bigger gain potential, or at least a sooner gain potential.

 

--It is important to research if the crypto project has any use cases--companies actually using their product. These are better than ones which don't. Solana, for example, has a few hundred companies currently using their product. Other coins go up based on the theory of what they can do but they're less stable without use cases.

 

--If you like a brand new project and want to get in on its Initial Coin Offering, don't get it immediately. Wait until the initial hype is over, wait until it dips (if it dips), and then buy it on the cheap. Then just give it a few months until people recognize it again and then it'll 5-10x.

 

--I mentioned possibly getting a Crypto Wallet to a friend who is big into crypto. He said that on Coinbase or Binance it's pretty secure to leave money stored there. But elsewhere, or should I just want one, there's a company which will stamp your code words onto a metal plate. That way it's fire/water resistant and permanent, and then he sent copies to his siblings, especially should he die and they would then be able to access his accounts.

 

--More and more I'm liking the idea of playing the dips. If crypto is going to crash 30% out of nowhere, I'm liking the idea of pulling out profits when the market is good and leaving some available money aside for when it does dip 30% in a day or week to then be able to throw some money back in. The "invest in a good company and then forget about it" is probably the appropriate Buffet-style strategy that works well in the regular market, but probably doesn't in such a volatile market as crypto. With crypto it's even harder to control the greed impulse, but I'm starting to think it's all the more necessary to do so. Like this week it dropped 30% and then went up 15% the next day. If I had pulled more money out, sure I'd have missed maybe a 5% gain, but I'd have avoided the big drop and then taken advantage of that rise. Today I pulled 20% out after that rise and plan to hold it for a second dip.

[Joseph Zarr]

If you are looking at interesting projects with actual Use Case and interesting real-world applicable technology, I would take a look at the Digital Currency Group backed 'Hedera Hashgraph'. It is listed on exchanges as 'HBar' - in the US it is primarily available on Bittrex tho I noticed the Uphold updated wallet offers the ability to Swap in their online wallet. It is still relatively cheap in the $0.30-33 range lately. I quite like the Project and every major Crypto Bloodbath I simply buy more Hedera. They will start Proxy staking this Fall Q3 or Q4? A really interesting project. Most energy efficient POS Network in the space at present and when stacked among some of the more well-known Projects in the POS world they handle quite a bit more Processing volume per second than any of the other projects. El Salvador has hosted their entire national BTC wallet apparatus on the Algorand blockchain - Hedera has 10x faster processing speed, for example.

 

Anywho, I see a very interesting project in its nascent phase. It is unlike any other technology in the space. And, it COULD pan out in the Long run.

 

As to hodling any Long Term crypto on exchange wallets: I would strongly encourage you NOT to do that unless you are trading on the regular. It doesn't matter how good an Exchange purports their security to be...it only means that until they are hacked. I would highly recommend getting a Ledger NanoX for your LT storage. It is quite nice. I have all my LT staked coin stashes staked through their Hardware wallet. The ease of mind is unparalleled. Now, the Coinbase Vault - perhaps - is another story. And, no matter what Coinbase says, the US-based exchange touted as being the most secure is actually Gemini, fwiw.

 

I can say, having recently dabbled in the WeBull stock trading...I much much prefer Crytpo - even with its volatility. I do not want retail meme comments in any way shape or form in my Trading world.

[owbc]

I get that crypto was created in response to the banking crisis, but, after over a decade, does it actually solve any of the problems with banking or will it in the next 5 years? If anything there are more problems...

 

(1) It's extremely inefficient + bad for the environment

(2) Government regulation is inevitable

(3) It's too volatile to be used for banking

(4) The platforms are not secure

 

It's a speculation bomb like everything else in the economy right now...stocks, housing, commodities, etc. My vanguard index funds are up over 20% this year and it's required exactly zero effort on my part. Money is free flowing right now and crypto is growing because people are looking for every possible avenue to invest their increasing cash. When the economy inevitably blows up, crypto will go down with it.

 

Again, I'm not arguing that there are not uses for some aspects of this technology, but that is all completely decoupled from the speculation bubble that we are all playing, myself included. We all know it's unsustainable and if things really start going downhill we're all going to pull our investments. As long as cash is free-flowing I would buy every dip.