I just bought $200,000 of Bitcoin

[lkn]

17 hours ago, allanos said:

The components which make up what we know as Bitcoin, a tier-1 blockchain product, have a true, albeit non-tangible value. Those who understand that, together with the power behind the Metcalfe's Law principle of the value of a network, are very aware that Bitcoin is a valuable "commodity".

You are conflating two things: The network has value, yes! That is why people are currently paying the network operators around $1.5 worth of BTC per transaction done on the network, and further reward the operators with mining rewards paid collectively by the bitcoin holders by diluting the pool of bitcoins and giving the new ones to the miners.

 

But this does not give the “token” itself much value: It is an access token to the network, but you still pay per transaction, so ideally, if the network actually did provide value, and the access token gets too expensive, competition should cause someone else to do a new network providing the same service, but for a cheaper fee/access token.

 

Unfortunately though, the value the networks provide is questionable, but we do see a lot of new networks and tokens appear all the time, though it’s because of the speculation, rather than the services they provide.

[lkn]

8 hours ago, Whale said:

I did a move the other day and it took about 2 minutes. Still lightening fast compared to my fiat banking system though the transferring bank to bank..

This is because your bank sucks. Thailand can do domestic instant transfers and have done for as long as I can remember. Pan-European instant payments (SEPA) were enabled in 2017, and closed-loop systems like PayPal has done cross-border instant payments since the early 2000s.

 

Cryptocurrencies adds nothing new here, on the contrary, majority of cryptocurrencies are much slower than “modern” banking, have higher fees, and takes up enormous amounts of energy.

[allanos]

13 minutes ago, lkn said:

This does not exclude it being a ponzi, and furthermore, the finite amount is pretty questionable. Yes, there will only be 21 million bitcoins, but then we have a handful of forks, each adding another 21 million, and then we have split one bitcoin into 100 million satoshis, so multiplying by 100 million, and then we actually trade bitcoin in USDT and other stable coins, which seems to have near infinite supply without anything backing them, and then we have MicroStrategy as a proxy for buying bitcoins, which can issue infinite stocks, etc.

 

But what does it even mean? It is just numbers, nothing underlies it, no value generated, and that is why it resembles a ponzi so much.

Sorry chum, your ignorance of, in particular, Bitcoin, is shining through with everything you post. A million bitcoin forks can be attempted, but none of them will replace Bitcoin. Reason? There will be zero adoption.

 

As to MicroStrategy, their capital structure cannot be infinitely diluted. That would be plain dumb.

Blackrock, with ten trillion dollars AUM is a substantial shareholder. Do you seriously think they are going to underwrite a Ponzi scheme?

 

I have now concluded your are trolling and shall no longer respond to your posts.

[lkn]

On 2/17/2022 at 8:17 PM, happydreamer said:

Crypto now is regulated the most it has ever been in its history.  In order for large scale adoption to occur, there needs to be rules that govern the way it can be used, sold, bought, HODL'd, distributed, lent, taxed, whatever...

It might be “the most it has ever been”, but it is barely regulated in most Western countries.

 

And regulated crypto is an oxymoron. The entire reason we waste all these resources doing proof-of-work, which makes blockchains slow and unscalable, is because we want the regulatory arbitrage.

 

Already crypto is more expensive and slower than the system it wants to replace. Add KYC requirements and AML screening, and I fail to see why anyone would use this over existing financial institutions.

 

Granted, today crypto is already heavily centralized, and the big players (like Coinbase) do some KYC, and the exchanges and market places work together on censoring crypto assets (like stolen tokens, NFTs minted from copyrighted materials, etc.). So I guess, as long as people think that “number goes up”, they will continue to participate.

Edited February 19, 2022 by lkn

[lkn]

9 minutes ago, allanos said:

As to MicroStrategy, their capital structure cannot be infinitely diluted. That would be plain dumb.

Blackrock, with ten trillion dollars AUM is a substantial shareholder. Do you seriously think they are going to underwrite a Ponzi scheme?

I don’t think Blackrock would willingly underwrite a ponzi, no. Nor did I say anything like that.

 

But now that you bring up this tangent, I do think that Michael Saylor is a person of very questionable ethics. His company (MicroStrategy) has previously been fined by the SEC for fraud, and he has literally said that the most important thing you can do is to spend all your money on bitcoin, mortgage your house to buy more bitcoins, and when you are out of credit, convince your friends and family to buy bitcoins.

 

This is cult-level rhetoric, but earlier in this thread, it was brought up how “large cap” companies buy Bitcoin. Really, it is people like Michael Saylor and Elon Musk who buy them via their company positions, nothing more, and it is not an endorsement, if you know a little about these people.

 

[allanos]

PayPal has done cross-border instant payments since the early 2000s.

 

There is something the poster clearly does not understand here.

 

Payments systems using the bitcoin network, like Lightning, are instantaneous, and IRREVERSIBLE.

Final settlement is immediate

 

In the case of banks, Pay Pal etc, final settlement can take up to ten days, and transactions can be reversed within that time frame.

[Whale]

31 minutes ago, lkn said:

This is because your bank sucks.

It may well do (I bet you can suck harder though?) but an international transfer from my bank to Thailand takes 2 days (for me to get my hands on the money), from my bank to US 1 day and all the delays in both cases are with the receiving banks. From my credit union to anywhere 2 to 3 days.

[lkn]

22 minutes ago, allanos said:

In the case of banks, Pay Pal etc, final settlement can take up to ten days, and transactions can be reversed within that time frame.

You understand that being able to dispute a charge on your credit card and have it reversed, say you ordered something online, and the seller does not deliver, is a design feature, right?

 

And what does irreversibility have to do with transaction speed anyway?

[ukrules]

2 hours ago, lkn said:

if the network actually did provide value

It provides utility.

[happydreamer]

4 hours ago, Longwood50 said:

You are correct, it is abstract and no I don't have a in depth understanding of it.  However value comes from the ability of an investment to generate income.  The theoretical value of a stock is a multiple of its "projected income".  The faster the company is anticipated to grow the more its stock price rises in value. 

I fail to see of Crypto owns or produces anything.  If I own a crypto currency I certainly don't own a fractional percentage of any income producing assets.  If that is true, its rise in value is strictly a function of having more buyers who want it than those who want to sell it. That is the greater fool theory. 

Perhaps but I worked for Merrill Lynch during he heyday of the dot.com bust.  Companies that produced nothing and never made a profit were sold for huge amounts of money that kept going up on the theory that someday they would be profitable. 

I can recall the traditionalist saying that these companies were not worth anything since they had no earnings and only the imagined prospect of future earnings.  The refrain was " you don't understand the dot.com industry and this time is different" 

I wish I had purchased some crypto when it first came out, but I can tell you after reaching a profit, I would not hold it today.  My instincts still tell me that Coke will produce Coca Cola today, and tomorrow, that Microsoft will produce software, and Apple will make electronics. Those products have value and as sales increase so will profits and my ownership of those companies will rise correspondingly.  I find that far more reassuring than the prospect of crypto.  Two very influential people Jamie Dimon, CEO of JP Morgan Chase and Warren Buffet the famed investor have repeatedly rebuked the idea that Crypto was anything more than a fad.  

Good points.  Just to make sure I'm understanding correctly, by this logic investors in real estate are included in the greater fool theory?  Real estate in and of itself doesn't own anything and it doesn't produce anything.  It incurs expenses throughout it's debt ownership and you pay taxes on it along the way.  Unless you outrightly hold the deed to a piece of property then all you actually own is the debt to it.  And at the end of the interest bearing loan terms, you may, or may not get back what you originally paid for said asset, depending on what anyone within that market is willing pay for it.  And finally , buyers in the real estate market are basing their perceptions of property value on historical and trending data. Am I understanding and applying the theory correctly?  Not being sarcastic, just trying to understand a point of view that seems a bit oversimplified....

 

[balo]

Please report back in a year, I want to hear if you're still in profit.  I would invest in property instead and rent it out. But I am not a risk taker. 

Edited February 19, 2022 by balo

[Airalee]

39 minutes ago, happydreamer said:

Real estate in and of itself doesn't own anything and it doesn't produce anything.

Real estate can have a measurable P/E in the way of rents (some better than others). If lived in and not rented out, it has utility as shelter which can be measured via OER (owners equivalent rent).

 

That being said.  I wouldn’t invest in R/E either.

 

When I hear of people “loaning” out their cryptocurrencies and claiming APRs of double and triple digits, they are never able to tell me exactly how (in simple, easy to understand, jargon-free terms) the returns are made.  

[lkn]

46 minutes ago, happydreamer said:

Just to make sure I'm understanding correctly, by this logic investors in real estate are included in the greater fool theory?  Real estate in and of itself doesn't own anything and it doesn't produce anything

As @Airalee already said, real estate does produce a cashflow (income) from renting it out (to people who need shelter or commercial space) or if you have a farm, the produce that can grown, harvested, and sold.

 

But just to add: We do have periods where real estate does become a game of chasing the greater fool, those are the speculative bubbles, where people buy a second home, not because they need it, but because they think that in two years, they can sell it at a profit.

 

In the initial phase, prices do go up, because demand increase faster than supply, though that demand is artificial, as people buy more houses than they actually need, and meanwhile, property developers will see rising prices and be motivated to build more, making the eventual collapse worse.

 

And back to your original question: Investing in real estate can be many things, e.g. there is also a lot of construction of new houses for new families, or building shopping malls, etc. that falls into this category. It is generally not just to buy up a lot of real estate, sit on it, and then sell for a profit in 5+ years.

[happydreamer]

27 minutes ago, Airalee said:

Real estate can have a measurable P/E in the way of rents (some better than others). If lived in and not rented out, it has utility as shelter which can be measured via OER (owners equivalent rent).

 

That being said.  I wouldn’t invest in R/E either.

 

When I hear of people “loaning” out their cryptocurrencies and claiming APRs of double and triple digits, they are never able to tell me exactly how (in simple, easy to understand, jargon-free terms) the returns are made.  

Thats a good point on rents.  I never considered that, probably because I wouldn't want to rent a property.  Thats just me though.  

Supposedly, the interest is paid for staking (loaning as you referred to) because your assets (read as crypto) contribute to blockchain and provide processing power for transactions to occur.  The interest thats being paid (crypto) is the by-product of more transactions completing blocks on the blockchain.  I don't know what your background is on understanding how blockchain works so I'm not sure if thats going to make sense or not.  

As I mentioned before, not all crypto is meant to be used as currency, however part of the value of it is it's contributions to the network as a whole, so there is the intrinsic value within it's network, the same way other assets have intrinsic value within their given markets separate from supply and demand. (intrinsic)

I think for the most part this is where it falls apart for non technical people because this is very abstract to understand

 

Hope this makes sense.

[happydreamer]

19 minutes ago, lkn said:

As @Airalee already said, real estate does produce a cashflow (income) from renting it out (to people who need shelter or commercial space) or if you have a farm, the produce that can grown, harvested, and sold.

 

But just to add: We do have periods where real estate does become a game of chasing the greater fool, those are the speculative bubbles, where people buy a second home, not because they need it, but because they think that in two years, they can sell it at a profit.

 

In the initial phase, prices do go up, because demand increase faster than supply, though that demand is artificial, as people buy more houses than they actually need, and meanwhile, property developers will see rising prices and be motivated to build more, making the eventual collapse worse.

 

And back to your original question: Investing in real estate can be many things, e.g. there is also a lot of construction of new houses for new families, or building shopping malls, etc. that falls into this category. It is generally not just to buy up a lot of real estate, sit on it, and then sell for a profit in 5+ years.

Good perspective and breakdown.  Much appreciated

[ukrules]

31 minutes ago, happydreamer said:

Supposedly, the interest is paid for staking

No, it's literally being lent out on exchanges. It's not staking as in 'proof of stake' - completely different and quite modern.

 

If you were an 'expert' in the wider crypto field even 5 years ago then you won't be today unless you kept up to date, a lot has changed.

 

[Airalee]

1 hour ago, happydreamer said:

Supposedly, the interest is paid for staking (loaning as you referred to) because your assets (read as crypto) contribute to blockchain and provide processing power for transactions to occur.  The interest thats being paid (crypto) is the by-product of more transactions completing blocks on the blockchain.  I don't know what your background is on understanding how blockchain works so I'm not sure if thats going to make sense or not.  

Nope.  Makes no sense at all.  And if it’s lent out on the exchanges as @ukrulessays, who is it lent to and how could it possibly pay triple digit annual interest?  Wouldn’t it be cheaper for someone (who intends on borrowing said Bitcoin) to just buy it using credit card?

 

I had a friend who got involved in one of those Bitcoin lending schemes.  2% daily compounding (yes…daily) or something like that.  I ran the numbers for him on a $1000 investment and showed him that in 2 years he’d be a billionaire.

 

he smiled…..didn’t get it.

 

told him that in 3 years he’s have more money than Gates.

 

bigger smile from him…nodding his head.  Still didn’t get it.

 

told him that in 5 years he’d have more money than all the money in the world combined.

 

Still didn’t get it.

 

I googled the guy who was running the scam.  People were talking about him all over the internet.  Even had articles written about him in newspapers.  “Get rich quick schemes”.  Showed him that people for years have been calling him out on his scams.

 

Still couldn’t accept it.

 

Problems started.  The scammer claimed that there were “technical” problems.  People started to complain.  Couldn’t withdraw their money.  Scammer offered higher returns for people who would leave their money in for a year….but there was a minimum amount required.  People had to pony up extra…and they did.  As did my friend.

 

Nothing I could say or show him would or could convince him that it was a scam.  Math didn’t matter.  The tons of information about the guy running the scam all over the internet didn’t matter. (FWIW, I’m just as concerned when I google peoples names with Bitcoin operations here in Bangkok and get nothing about them)

 

Friend lost his money in that scheme.  Easy come…easy go I suppose.

[ukrules]

On some exchanges you can provide liquidity for traders who pay interest to use either your coins or your fiat to leverage their trades in both directions by many multiples.

 

I believe it's not cheap to do this type of trade but it is very widespread and this is where the short term borrowing at higher interest rates begins - that's just a part of it though.

 

Edited February 19, 2022 by ukrules

[Airalee]

19 minutes ago, ukrules said:

On some exchanges you can provide liquidity for traders who pay interest to use either your coins or your fiat to leverage their trades in both directions by many multiples.

 

I believe it's not cheap to do this type of trade but it is very widespread and this is where the short term borrowing at higher interest rates begins - that's just a part of it though.

 

Nope…still not getting it.  Here is a cut and paste of the post I was referring to.

 

“No, this 1 year period is only for the Maiar exchange as it is a new one. You can stake for 200% and wait a year or 14%, which you can sell any time. 

The 12% for Polkadot on Kraken has no holding period.  Kraken is a US bank and you can also get 2% on USD, 23% for Kava, 18% for Kusama, and many other that also don't have any tied up time. Only 0.25% for Bitcoin. 

The 47% for Solana/Raydium on Raydium exchange is also redeemable any time.”

 

Still can’t wrap my head around 200% APR (with a 1 year holding period) or why anybody would offer that.  And the same “exchange” is 14% with the ability to “sell at any time”.

 

A cash advance on a credit card would cost less.  Much less.

[ukrules]

47 minutes ago, Airalee said:

 

Still can’t wrap my head around 200% APR (with a 1 year holding period) or why anybody would offer that.  And the same “exchange” is 14% with the ability to “sell at any time”.

 

A cash advance on a credit card would cost less.  Much less.

Once they have your funds what do you think they do with them?

 

Sit on it keeping it safe or relending for far higher interest rates on a shorter term basis......????

 

Anyway, it's not a requirement that you specifically understand it, it is a thing.

Edited February 19, 2022 by ukrules

[Airalee]

1 minute ago, ukrules said:

Once they have your funds what do you think they do with them?

 

[Neeranam]

55 minutes ago, Airalee said:

Still can’t wrap my head around 200% APR (with a 1 year holding period) or why anybody would offer that.  And the same “exchange” is 14% with the ability to “sell at any time”.

This might help you understand:-

 

There are four types of yield that make up the foundation of all robust earnings in DeFi:

1. Staking Rewards: compensation for helping secure the blockchain
2. Lending Rates: interest earned for providing funds other people can borrow
3. Exchange Rewards: fees earned for helped decentralized exchanges fill trades
4. Fee Distributions: fees charged by platforms that are distributed to their token holders

 

https://every.to/almanack/defi-yields

[Airalee]

14 minutes ago, Neeranam said:

This might help you understand:-

 

There are four types of yield that make up the foundation of all robust earnings in DeFi:

1. Staking Rewards: compensation for helping secure the blockchain
2. Lending Rates: interest earned for providing funds other people can borrow
3. Exchange Rewards: fees earned for helped decentralized exchanges fill trades
4. Fee Distributions: fees charged by platforms that are distributed to their token holders

 

https://every.to/almanack/defi-yields

If they are as profitable as you claim (200% annual returns to their customers), why doesn’t Vanguard or Blackrock buy them?

[Muzzique]

On 2/15/2022 at 10:22 AM, DezLez said:

On 2/15/2022 at 10:20 AM, Pravda said:

It will never go to zero.

NEVER say never!

No but it can get pretty close..

 

 

 

90% of its value lost in one day. It's the Greater Fool Model. It's like playing Pass the Parcel with a hand grenade. 

[worgeordie]

On 2/18/2022 at 10:25 AM, Neeranam said:

@Pravda As I see it, you have 2 options here. 

 

1- HODL - this is well known to crypto holders, who are not in it for a short-term gamble, but a long-term investment.

 

2- Panic sell at $40,700 and limit your losses, get a resentment about how you were in crypto for a week and lost 10%, come back 1 year later when Bitcoin is $100k and tell everyone how most people lose. 

 "come back 1 year later when Bitcoin is $100k and tell everyone how most people lose."

So you have crystal balls , or is your middle name Nostradamus.......... ????

regards Worgeordie

[Neeranam]

10 hours ago, Airalee said:

If they are as profitable as you claim (200% annual returns to their customers), why doesn’t Vanguard or Blackrock buy them?

I don't know. Maybe they don't want the risk of Impermanent Loss, maybe they are too set in their ways.

[happydreamer]

15 hours ago, ukrules said:

No, it's literally being lent out on exchanges. It's not staking as in 'proof of stake' - completely different and quite modern.

 

If you were an 'expert' in the wider crypto field even 5 years ago then you won't be today unless you kept up to date, a lot has changed.

 

Was never an expert, just an adopter and enthusiast.  I personally don't stake or lend because I don't completely understand it....hence "supposedly".  I also don't trade crypto options or futures or use leverage because I don't understand how it works even though I've been trading options and futures on the NYSE for the past three years..

 

I keep my assets in cold storage (Nano X) and mitigate risk along the way.  

 

To each their own.  Everyone here is entitled to that. Ive made good dough off it over the past 8 -9  years...I  believe in it, I believe in it's uses, I like the idea of blockchain technologies, and I see the writing on the wall as far as tech and energy companies buying into it.  My strategies are unconventional in every aspect of life and somehow Im here, making gains off my business, investing, and trading.  The biggest loss financially in life was living off my savings for 5 years while I traveled the world and figured out what came next. None of my loses have ever come from bad investments...just from spending.....and buying cars when I was a young man in my 20s and 30s  Sh!t I even made money off that whole Gamestop fiasco.  

If it's not for you its not for you.  Real estate isn't for me,  people have made a mint off of it.  Doesn't mean its not real or its a sham.

 

Pravda ...good luck dude.  Let us know how it plays out for ya
 

Edited February 20, 2022 by happydreamer

[2009]

This will end in tears

[Neeranam]

1 minute ago, 2009 said:

This will end in tears

Investing in an asset that has been increasing in value on average 100% a year? 

 

Please explain. 

[Longwood50]

17 hours ago, happydreamer said:

Just to make sure I'm understanding correctly, by this logic investors in real estate are included in the greater fool theory?

Not exactly an apples to apples comparison.  Real Estate is a commodity.  Not any different than soybeans, pork bellies, orange juice and oil.   

Real estate, may be "income producing" such an an apartment building, office building, or shopping mall.  A single family home is "not an investment" it is a way of life.  People may find that the price of their home appreciates over time but one has to be careful defining appreciation.  If a home is purchased for $300,000 and 30 years later it sells for $600,000 is that "appreciation" or is it merely reflecting the higher costs of replacement. 

If you are purchasing a home to live in, that is "not an investment"  If you are purchasing a single family home, office building, vacant land, or a shopping mall to rent, those are investments.  If you are buying real estate to "flip" that is not an investment that is speculation.  Same is true with Crypto.  It is speculation based on the greater fool theory.