Start with crypto now - Should or not?

[lkn]

21 hours ago, Jabers said:

[…] you stood and hid on the sidelines like a scared little baby not saying anything and just waiting for your time to jump in and act so special.

Not the OP you replied to, but a few months ago I participated in some of the bitcoin threads with a handful of posts, pointing out that no value is being created by trading a digital asset (on the contrary, the design of bitcoin is so that by not trusting anyone, the network requires proof of work, and to make that secure, the energy consumption of the proof should at least be the same as the value being protected, so you have a big value loss here).

 

The reason why it works right now, is partly due to the block reward (which basically puts the cost of the transactions on all holders of the coin rather than only on those who do transactions, and is thus causing inflation, and leaves us with a problem when the block reward decreases, as it does every 4th year) and partly due to the inflow of new money, although for the latter, $2.3 billion of these “new money” are issued in the form of Tether (USDT) and people apparently have faith that this money really exist, even though there has been no audit performed of Tether, who claims to hold all this money in undisclosed non-U.S. bank accounts.

 

Adding to this, bitcoin itself is technically infeasible to be used as a real currency: It does not scale, period! You just can’t have a single ledger with all the world’s transactions which must be distributed to everybody and kept up-to-date. Furthermore, the delays makes it unfit for real time purchases (like in brick and mortar shops). By design, there is a minimum 10 minute delay, but because of the distributed design, you must wait for at least 3-4 blocks before you have reasonable confidence in the transaction being permanent, meaning that you could be asked to wait 40-50 minutes for a high-value purchase.

 

Some believe that these are just current issues that will be sorted out, but they are problems for which no-one has even come up with a theoretical solution during the last 9 years. The solution currently being touted is to move most transactions to a second payment network (the lightning network) and only use bitcoin to “top up” your lightning balance, but there are several issues with the lightning network, hand waving in the white paper about how to solve the routing problem (and without a solution to this problem, it just won’t work), and its doubtful how much load it will actually take off the blockchain.

 

All in all, bitcoin is not destined to take over the world, because it has too many unsolvable problems, and some of us have said that long before the recent crash.

 

Though regarding the price: I will make no predictions about the price, because it is basically a measurement of how many ignorant people have money to waste, and we already know that there is an endless supply of these. Look at how long some of the history’s bigger ponzi and pyramid schemes have been going on, longer than bitcoin! and there have even been ponzi schemes where late investors had a pretty good idea that it was a fraudulent scheme, but they still invested, because they thought they would be able to cash out before the scheme collapsed.

 

But it doesn’t change that it’s a zero-sum game where the miners are probably cashing out regularly to cover their cost, so majority of the money put into bitcoin has already been lost, and it will end bad!

[NiwPix]

Great post and I understand your point, though mostly dont agree with it.

Bitcoin probably wont make / "take over the world", but I do believe there will be / is some very crypto out there that will give Visa/MC, banks, Western Union, currencies etc a run for their money.

I know of one crypto that is working on many of the issues / concerns you raised and looking into the leadergroup, I believe they will solve many of these problems that many crypto currencies can not solve because they're working with the bitcoin blockchain.

This crypto technology is very new and complex and this is part of what gives these currencies their value. I don't believe a technology needs to be backed by money to function. It just needs to function really good and gain users.

prime example: Facebook

they're "worth" 500 billion. They're not backed by anything except technology. Their income come mainly from advertising but only because they have....2 billion? users.

Imagine 2 billion people using crypto to do transfers, payments...all this solely based on the technology ( which needs a few more years to develop and generating a user base ). Once the technology is there, I am sure Amazon, Alibaba, Ebay etc will start accepting crypto and from then on...merry christmas to the early risk takers....and adopters.

[Skeptic7]

7-day performance as of April Fools Day of the Top 8 "virtual currencies" by market cap.

How low will they go? 

 

[Naam]

best performing asset... my butt.

[Monomial]

22 hours ago, NiwPix said:

Great post and I understand your point, though mostly dont agree with it.

Bitcoin probably wont make / "take over the world", but I do believe there will be / is some very crypto out there that will give Visa/MC, banks, Western Union, currencies etc a run for their money.

I know of one crypto that is working on many of the issues / concerns you raised and looking into the leadergroup, I believe they will solve many of these problems that many crypto currencies can not solve because they're working with the bitcoin blockchain.

This crypto technology is very new and complex and this is part of what gives these currencies their value. I don't believe a technology needs to be backed by money to function. It just needs to function really good and gain users.

prime example: Facebook

they're "worth" 500 billion. They're not backed by anything except technology. Their income come mainly from advertising but only because they have....2 billion? users.

Imagine 2 billion people using crypto to do transfers, payments...all this solely based on the technology ( which needs a few more years to develop and generating a user base ). Once the technology is there, I am sure Amazon, Alibaba, Ebay etc will start accepting crypto and from then on...merry christmas to the early risk takers....and adopters.

 

Continuing in this vein, what many don't realize is that Bitcoin was not some fantastic revolution when it occurred. Rather, it was another attempt to pull together different pieces to try again at this problem. Cryptocurrencies have a long history going back to 1983.

 

The biggest thing about Bitcoin is that this time it actually worked. Most people in the early days of Bitcoin thought it was going to go the same route as all the others. Today, new investors who don't know their history have thrown money into this technology thinking it represents some breakthrough that is going to unlock billions.

 

The reality is that Bitcoin succeeded due to a confluence of factors, and Bitcoin just happened to be there. BTC came just after the crisis of 2008, it came when the internet had finally penetrated deeply enough into our lives to give everyone easy access to the network, and it came at a time when technology was making it increasingly difficult for money laundering and drug trading. Put all this together, along with a new codebase adapting all the work that came before it, and "Voila!", you have a functional cryptocurrency that was driven in to bubble territory by a fundamental misunderstanding of what it is.

 

The question for investors is whether or not any of the factors which made BTC successful have gone away. Have the lessons of 2008 resulted in smaller banks, or has the financial system doubled down on Too Big To Fail? Is there a better way to launder money today than cryptocurrencies? Has the internet become less pervasive in our lives?  Unless you are intentionally obtuse, you know the answers to all of the above are a resounding no, and therefore there is absolutely no reason to believe cryptocurrencies are going away. The irrational exuberance may be deflating from the market, but Bitcoin proved that financial world is primed to undergo a titanic shift.

 

So yes, the short term value of cryptos is declining, and in the long run that is a good thing because they were overvalued. But in the end, the factors above will keep cryptocurrencies going forever unless conditions change. If you believe Bitcoin is just a fad, which condition above do you think will change to make cryptocurrencies go silently into that good night? The success of Bitcoin exposed a problem with today's financial system, and people are going to pick at that scab until real disruption occurs.

 

There will be a crypto or 3 that are around at the time when the next watershed event occurs, and they will receive the profits from the change. Your job as an investor in cryptocurrencies is to try and not lose your shirt while holding on and waiting for this event.

 

 

[rdhowell]

On 2/2/2018 at 9:47 AM, Jabers said:

if you are interested in fast, free, instant crypto transfers, the coin right now that is gaining lots of popularity is XRB (raiblocks, but recently renamed to "nano").

 

but a word of warning to noobies, stay away from icos until you understand the technology or have money you are willing to risk/gamble and will not be mad if it is all lost.

What do you mean by transfers?