Are members invested in Bitcoin/crypto?

Walrus · Feb 22, 2021

sgrenald
As a follow-up question: if everything is open and transparent, why is it called "cryptocurrency?"

Cryptology

Observer
Maybe because it’s based on cryptography?

yes and it uses cryptography to verify and protect itself rather than a central authority. I think The Whole anonymous thing is moot these days. As others have said you could burn wallets and use vpns to try to maintain some anonymity but the government has been working on tech to track crypto. Even the so-called anonymous coins like monero I wouldn’t be surprised if they can be tracked. If you screw up or an exchange is hacked by an entity in Nigeria, North Korea, Russia etc doesn't mean you will get it back. Pretty much the same as cash. I also have doubts that bitcoin will remain un-hackable forever but the fact it has a trillion dollar market cap and is still secure is pretty damn amazing in my eyes. It’s a pretty cool thing, I’m not into it big time just has fascinated me for a while.

Observer · Feb 22, 2021

Archer
This is what doesn't make any sense to me. The exchanges that were hacked of Bitcoin (to make my question very specific), did they catch those people?

For the most part, if it’s gone, it’s gone. It’s still the Wild West of finance and you’d better be careful. There are recent examples I can’t cite without looking for them where the bad guys get caught, but don’t expect it. This is why you need to get the bulk of your holdings out of exchanges and onto what they call a hardware wallet. There are exceptions to this when you want to generate income by staking, mining, or lending (don’t ask), but you face greater risk for those rewards.

Walrus · Feb 22, 2021

Archer
Okay sort of confused...using green energy or not is not related to the actual consumption of energy, so this that article seems to be really excusing away the question...and then saying that because others can't agree, it's all bunk. So yes, very pro-crypto.

Everyone talks of fiat currencies being able to be created "out of thin air with a few keystrokes" so when I see a technology that uses a lot of energy (green or not) claiming to use less energy, it makes me ask questions. Your answer seemed very definitive, so I was hoping there was something you could point to to say that $XX money made one way takes this much energy compared to $XX money made via Bitcoin, but it doesn't seem there is such an analysis.

I did have something like that. Since bitcoin is a world wide thing the article went into what every county used electricity wise to produce currency vs what bitcoin uses. The numbers weren’t even comparable. If I could find the article now I would post it. It seems searches tend to focus on bitcoin bad type of thing. Hopefully I can dig it up again.

Andi · Feb 22, 2021

What is the real value of a bitcoin? The answer is it is worth nothing.

No one knows who "issued" it (could as well be North Korea or a terrorist organization), no one is backing it (unlike a currency issued by a state) and most of it is "owned" by a few "investors" controlling the "price".

So why do people pay for it? Because like in a ponzi scheme they hope someone else will buy it from them - or they use it for illegal activities.

Bitcoin is not a currency since it is not issued by a state - it is issued by no one and can be declared illegal at any time (India is planning to do so). It can fail technically (eg the whole system can be hacked) or people could start realizing the lack of any value whatsoever.

So no - I will never invest in bitcoin because I understand it and know it is worthless.

Observer · Feb 22, 2021

It’s true that you can create a cryptocurrency anytime you want with minimal skills. That’s one of the things that the Ethereum blockchain is made to do, and I believe the vast majority of tokens in existence are on that chain. It doesn’t mean that anyone wants it or that it has any use at all. It certainly won’t be mistaken for bitcoin, though.
People regularly create tokens similar to ones with real value and scam people out of their precious ETH on exchanges. It’s easily avoided if you know how to be careful, but it is a constant risk.

Archer · Feb 22, 2021

Observer
For the most part, if it’s gone, it’s gone. It’s still the Wild West of finance and you’d better be careful. There are recent examples I can’t cite without looking for them where the bad guys get caught, but don’t expect it. This is why you need to get the bulk of your holdings out of exchanges and onto what they call a hardware wallet. There are exceptions to this when you want to generate income by staking, mining, or lending (don’t ask), but you face greater risk for those rewards.

Okay thanks - this post is more what I had imagined, rather than this one from earlier...

Observer
The thieves get caught now because it’s all very traceable.

Observer · Feb 22, 2021

Andi
What is the real value of a bitcoin? The answer is it is worth nothing.

No one knows who "issued" it (could as well be North Korea or a terrorist organization), no one is backing it (unlike a currency issued by a state) and most of it is "owned" by a few "investors" controlling the "price".

So why do people pay for it? Because like in a ponzi scheme they hope someone else will buy it from them - or they use it for illegal activities.

Bitcoin is not a currency since it is not issued by a state - it is issued by no one and can be declared illegal at any time (India is planning to do so). It can fail technically (eg the whole system can be hacked) or people could start realizing the lack of any value whatsoever.

So no - I will never invest in bitcoin because I understand it and know it is worthless.

I wouldn’t try to talk you into or out of anything, but the government issued currency in the US, like all the others, is also backed by nothing since at least 1971. USD has lost well over 90% of its value, which is exactly why BTC exists.

I don’t get why this is an all or nothing thing to so many people. Why avoid diversifying one’s assets?

Walrus · Feb 22, 2021

Andi
What is the real value of a bitcoin? The answer is it is worth nothing.

No one knows who "issued" it (could as well be North Korea or a terrorist organization), no one is backing it (unlike a currency issued by a state) and most of it is "owned" by a few "investors" controlling the "price".

So why do people pay for it? Because like in a ponzi scheme they hope someone else will buy it from them - or they use it for illegal activities.

Bitcoin is not a currency since it is not issued by a state - it is issued by no one and can be declared illegal at any time (India is planning to do so). It can fail technically (eg the whole system can be hacked) or people could start realizing the lack of any value whatsoever.

So no - I will never invest in bitcoin because I understand it and know it is worthless.

I don’t blame you I don’t think I’d get in at these prices. Now I’m just along for the ride see what happens knowing full well it could evaporate.

Observer · Feb 22, 2021

Walrus
I don’t blame you I don’t think I’d get in at these prices. Now I’m just along for the ride see what happens knowing full well it could evaporate.

Some of the most successful investors in the world are buying at these prices. Not that I am or anything.

Archer · Feb 22, 2021

And the next mystery I suppose I need to understand is this...

Dragon - CryptoKitties | OpenSea

::facepalm1::

321Only · Feb 22, 2021

Andi
What is the real value of a bitcoin? The answer is it is worth nothing.

No one knows who "issued" it (could as well be North Korea or a terrorist organization), no one is backing it (unlike a currency issued by a state) and most of it is "owned" by a few "investors" controlling the "price".

So why do people pay for it? Because like in a ponzi scheme they hope someone else will buy it from them - or they use it for illegal activities.

Bitcoin is not a currency since it is not issued by a state - it is issued by no one and can be declared illegal at any time (India is planning to do so). It can fail technically (eg the whole system can be hacked) or people could start realizing the lack of any value whatsoever.

So no - I will never invest in bitcoin because I understand it and know it is worthless.

Okay. We need people who start buying at 6 digit price levels

Andi · Feb 22, 2021

Observer
I wouldn’t try to talk you into or out of anything, but the government issued currency in the US, like all the others, is also backed by nothing since at least 1971. USD has lost well over 90% of its value, which is exactly why BTC exists.

I don’t get why this is an all or nothing thing to so many people. Why avoid diversifying one’s assets?

You are right about currencies - this is called inflation. In some cases hyperinflation. But as mentioned a currency is issued by a state, not by "no one".

321Only · Feb 22, 2021

Archer
And the next mystery I suppose I need to understand is this...

Dragon - CryptoKitties | OpenSea

there’s a reason why Bitcoin maximalists appear to be very toxic, referring any cryptocurrency-token-thing that is not Bitcoin as shitcoin

Observer · Feb 22, 2021

Andi
You are right about currencies - this is called inflation. In some cases hyperinflation. But as mentioned a currency is issued by a state, not by "no one".

I can’t find a definition anywhere that indicates a currency must be government issued. I’ll also point out that a ponzi is based on expectations of investment returns that get funded by newer investors while bitcoin buyers are after a store of wealth and/or capital gains. Quite different.

Andi · Feb 22, 2021

True, depends on the definition, eg from wikipedia: "Decentralized digital currencies, such as cryptocurrencies are not legal currency, strictly speaking, since they are not issued by a government monetary authority and are not legal tender."

My main point was bitcoin and other cryptocurrencies not issued by a state are worthless. I mentioned they are "like a ponzi scheme" since "investors" think they will sell higher and don't understand the lack of value (seeing and expecting people to continue to pay for it). Why else would anyone buy if they realized the lack of value?

sgrenald · Feb 22, 2021

Observer
Some of the most successful investors in the world are buying at these prices. Not that I am or anything.

One thing to remember about this is that it doesn't really matter to (probably) you and (definitely) me what billionaire investors are doing. There are financial investments that make a lot of sense at the level where you're putting millions or tens/hundreds/etc of millions in something that just don't make sense at the thousands/tens/hundred of thousands level. And vice versa. Warren Buffet can decide to buy a billion dollars in gold as an inflation hedge or asset diversification, but it doesn't really make sense for someone who's in his 40s with a half million dollar portfolio to put $10,000 into gold (I think that's a comparable percentage of net wealth). You're getting some diversification, but it's not really helping you towards your retirement goals. And some of these guys will buy an asset and sell it shortly thereafter for a small percentage profit that is in the millions. If our guy did that, fees and taxes would eat up almost all of his profits. On the other end of the stick, that half-millionaire can buy pretty much any financial investment that he wants and could put all of his money into a single thing like Apple or Merck or bitcoin. But Buffet can't put ALL of his money into any of those things. There probably isn't enough stock floating around for him to buy, and buying that much would cause the price to go up to where it might not make sense to buy anymore.

Observer · Feb 22, 2021

Andi
True, depends on the definition, eg from wikipedia: "Decentralized digital currencies, such as cryptocurrencies are not legal currency, strictly speaking, since they are not issued by a government monetary authority and are not legal tender."

My main point was bitcoin and other cryptocurrencies not issued by a state are worthless. I mentioned they are "like a ponzi scheme" since "investors" think they will sell higher and don't understand the lack of value (seeing and expecting people to continue to pay for it). Why else would anyone buy if they realized the lack of value?

There are many reasons to buy. There is no quicker, easier, cheaper way to transfer international payments. No quicker, easier, cheaper way to move wealth across borders. Thousands of people are sitting on massive gains. The most successful investors on the planet are buying. Unlike fiat, it is a scarce asset with a finite supply.
It has its limitations like any other asset, but it’s the sort of disruptive technology that creates new fortunes, just like the internet was a generation ago.

sgrenald · Feb 22, 2021

Andi
True, depends on the definition, eg from wikipedia: "Decentralized digital currencies, such as cryptocurrencies are not legal currency, strictly speaking, since they are not issued by a government monetary authority and are not legal tender."

My main point was bitcoin and other cryptocurrencies not issued by a state are worthless. I mentioned they are "like a ponzi scheme" since "investors" think they will sell higher and don't understand the lack of value (seeing and expecting people to continue to pay for it). Why else would anyone buy if they realized the lack of value?

Not really a ponzi scheme. More like the "greater fool" theory. That's when you invest in something, not because you think it has inherent value, but because you're riding the momentum and will dump it on some other sucker when the price goes up.

Tesla's stock price is at about 715 right now. Why? I don't know. I think it's market cap is more than every other car company in the world combined. It's price should probably be around 50 or less, based on the fundamentals. And it was at about 900 in early January. There are people who are going to buy it tomorrow, who know nothing about the company's financials or rollout strategy, but who think it'll get back to 900 "soon" and then they'll unload it. Same thing.

Observer · Feb 22, 2021

sgrenald
One thing to remember about this is that it doesn't really matter to (probably) you and (definitely) me what billionaire investors are doing. There are financial investments that make a lot of sense at the level where you're putting millions or tens/hundreds/etc of millions in something that just don't make sense at the thousands/tens/hundred of thousands level. And vice versa. Warren Buffet can decide to buy a billion dollars in gold as an inflation hedge or asset diversification, but it doesn't really make sense for someone who's in his 40s with a half million dollar portfolio to put $10,000 into gold (I think that's a comparable percentage of net wealth). You're getting some diversification, but it's not really helping you towards your retirement goals. And some of these guys will buy an asset and sell it shortly thereafter for a small percentage profit that is in the millions. If our guy did that, fees and taxes would eat up almost all of his profits. On the other end of the stick, that half-millionaire can buy pretty much any financial investment that he wants and could put all of his money into a single thing like Apple or Merck or bitcoin. But Buffet can't put ALL of his money into any of those things. There probably isn't enough stock floating around for him to buy, and buying that much would cause the price to go up to where it might not make sense to buy anymore.

I’ll have to disagree with the part about not meeting my retirement goals. I’m sitting on once in a lifetime gains already, and it just keeps going up. I also think it’s a great idea to put 5% of a portfolio into gold. Preserving wealth is just as important as investing.

Not that I’m a genius or necessarily any good at this. Everyone should be sitting on gains in the greatest bull market in history.

Heavy Cav · Feb 22, 2021

Andi
What is the real value of a bitcoin? The answer is it is worth nothing.

No one knows who "issued" it (could as well be North Korea or a terrorist organization), no one is backing it (unlike a currency issued by a state) and most of it is "owned" by a few "investors" controlling the "price".

So why do people pay for it? Because like in a ponzi scheme they hope someone else will buy it from them - or they use it for illegal activities.

Bitcoin is not a currency since it is not issued by a state - it is issued by no one and can be declared illegal at any time (India is planning to do so). It can fail technically (eg the whole system can be hacked) or people could start realizing the lack of any value whatsoever.

So no - I will never invest in bitcoin because I understand it and know it is worthless.

Lol. HFSP