Cryptocurrency - Bitcoin Continues to Soar!

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txhill
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

HomerJ wrote: Wed May 12, 2021 2:10 pm
txhill wrote: Wed May 12, 2021 11:40 am
watchnerd wrote: Wed May 12, 2021 11:37 am
txhill wrote: Wed May 12, 2021 11:34 am

Definitely. The crypto world is basically reinventing finance from scratch--which means it is going through all the tumult experienced by the stock market from before the passage of securities laws in 1933/1934. Hopefully the SEC will act quickly to bring some stability to the space.
I don't think the SEC can do it alone.

DeFi puts too many actors out of the SEC's reach.
That's true... wild times.
You guys know WHY those laws were passed in 1933/1934, right?

Because wild west and investing lead to Great Depression, and mass bankruptcy, and 25% unemployment, and food lines.

Maybe we should get some regulations in BEFORE there are any global crashes, eh?
Yes that would be ideal! We could very well be headed toward a crypto crash--most expect it, really. But if you're talking about another great depression? If that happens, it'd more likely result from the systemic effects of reckless money printing and the debasement of fiat currency, not from speculation in crypto (although of course a lot of folks got into crypto to hedge against the possible demise of the dollar).
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watchnerd
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

HomerJ wrote: Wed May 12, 2021 2:10 pm

Maybe we should get some regulations in BEFORE there are any global crashes, eh?
But how do you regulate a decentralized, anonymous system with major hubs outside of your legal jurisdiction?
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by LadyGeek »

Please stay focused on the investing aspects. Conjecture on economic / political policy / regulations is off-topic.
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TheBeanCounter
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by TheBeanCounter »

HomerJ wrote: Wed May 12, 2021 2:10 pm
txhill wrote: Wed May 12, 2021 11:40 am
watchnerd wrote: Wed May 12, 2021 11:37 am
txhill wrote: Wed May 12, 2021 11:34 am

Definitely. The crypto world is basically reinventing finance from scratch--which means it is going through all the tumult experienced by the stock market from before the passage of securities laws in 1933/1934. Hopefully the SEC will act quickly to bring some stability to the space.
I don't think the SEC can do it alone.

DeFi puts too many actors out of the SEC's reach.
That's true... wild times.
You guys know WHY those laws were passed in 1933/1934, right?

Because wild west and investing lead to Great Depression, and mass bankruptcy, and 25% unemployment, and food lines.

Maybe we should get some regulations in BEFORE there are any global crashes, eh?
The stock market crash, itself, did not lead to 25% unemployment. The Smoot Hawley Tariff would like to have a word with you.
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HomerJ
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by HomerJ »

TheBeanCounter wrote: Wed May 12, 2021 3:27 pm
HomerJ wrote: Wed May 12, 2021 2:10 pm
txhill wrote: Wed May 12, 2021 11:40 am
watchnerd wrote: Wed May 12, 2021 11:37 am
txhill wrote: Wed May 12, 2021 11:34 am

Definitely. The crypto world is basically reinventing finance from scratch--which means it is going through all the tumult experienced by the stock market from before the passage of securities laws in 1933/1934. Hopefully the SEC will act quickly to bring some stability to the space.
I don't think the SEC can do it alone.

DeFi puts too many actors out of the SEC's reach.
That's true... wild times.
You guys know WHY those laws were passed in 1933/1934, right?

Because wild west and investing lead to Great Depression, and mass bankruptcy, and 25% unemployment, and food lines.

Maybe we should get some regulations in BEFORE there are any global crashes, eh?
The stock market crash, itself, did not lead to 25% unemployment. The Smoot Hawley Tariff would like to have a word with you.
True enough. And it's fun to say! "The Smoot-Hawley Tariff!"
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watchnerd
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

where is the Bitcoin is Crashing thread, after that tweet by Elon?
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Kookaburra »

HomerJ wrote: Wed May 12, 2021 3:29 pm
TheBeanCounter wrote: Wed May 12, 2021 3:27 pm
HomerJ wrote: Wed May 12, 2021 2:10 pm
txhill wrote: Wed May 12, 2021 11:40 am
watchnerd wrote: Wed May 12, 2021 11:37 am

I don't think the SEC can do it alone.

DeFi puts too many actors out of the SEC's reach.
That's true... wild times.
You guys know WHY those laws were passed in 1933/1934, right?

Because wild west and investing lead to Great Depression, and mass bankruptcy, and 25% unemployment, and food lines.

Maybe we should get some regulations in BEFORE there are any global crashes, eh?
The stock market crash, itself, did not lead to 25% unemployment. The Smoot Hawley Tariff would like to have a word with you.
True enough. And it's fun to say! "The Smoot-Hawley Tariff!"
“Did it work? Anyone, anyone? It did not work, and the United States sank further into the Great Depression.”
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vanbogle59
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

watchnerd wrote: Wed May 12, 2021 12:16 pm
vanbogle59 wrote: Wed May 12, 2021 12:09 pm

This makes perfect sense to me.
Except that I don't think any of the crypto stuff rises to the level of publicly traded security.
IMHO, they still look more like Powerball tickets than shares in Megacorp.
This is where things get interesting...

They're definitely publicly traded.

Are they a security?

Gensler has said he thinks that crypto tokens are a type of security, whereas the crypto currencies are commodities.
Last night, 2 beers in, my buddy suggested that the chief objections to this whole crypto thing were best addressed with a little mental gymnastics.

For example:
"It's not a currency, cuz it's not backed by a gov't"
OK. Assume there is one. Happy now?
Of course you instantly realize that you know nothing about this government, it's laws, who holds power, whether it will be around in 5 years...

"Those aren't commodities, just numeric models for commodities"
OK. Assume they are actual, real commodities. How do they look now?
And it dawns on you that they are infinitely replaceable, at 0 cost, trafficking is opaque...

I'm reinforced in my priors. The probability distribution for this entire space is an upside-down bell curve.
It is most-likely and equally-likely that the future value will be $100T or 0. All intermediate results are decreasingly likely cr@p shoots.
Powerball tickets.
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watchnerd
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

vanbogle59 wrote: Thu May 13, 2021 8:44 am

"Those aren't commodities, just numeric models for commodities"
OK. Assume they are actual, real commodities. How do they look now?
And it dawns on you that they are infinitely replaceable, at 0 cost, trafficking is opaque...
You lost me at that point.

If Ethereum is used as "gas" to pay transaction costs on the Ethereum network (used by DeFi applications running on it), and they have to be mined, which takes capital investment and energy, how are they infinitely replaceable at 0 cost?
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vanbogle59
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

watchnerd wrote: Thu May 13, 2021 9:35 am
vanbogle59 wrote: Thu May 13, 2021 8:44 am

"Those aren't commodities, just numeric models for commodities"
OK. Assume they are actual, real commodities. How do they look now?
And it dawns on you that they are infinitely replaceable, at 0 cost, trafficking is opaque...
You lost me at that point.

If Ethereum is used as "gas" to pay transaction costs on the Ethereum network (used by DeFi applications running on it), and they have to be mined, which takes capital investment and energy, how are they infinitely replaceable at 0 cost?
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.
Last edited by vanbogle59 on Thu May 13, 2021 11:09 am, edited 2 times in total.
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watchnerd
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

vanbogle59 wrote: Thu May 13, 2021 11:03 am
watchnerd wrote: Thu May 13, 2021 9:35 am
vanbogle59 wrote: Thu May 13, 2021 8:44 am

"Those aren't commodities, just numeric models for commodities"
OK. Assume they are actual, real commodities. How do they look now?
And it dawns on you that they are infinitely replaceable, at 0 cost, trafficking is opaque...
You lost me at that point.

If Ethereum is used as "gas" to pay transaction costs on the Ethereum network (used by DeFi applications running on it), and they have to be mined, which takes capital investment and energy, how are they infinitely replaceable at 0 cost?
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.
The issue is not the code.

The issue is creating all the coins which requires lots and lots of compute hours to do the hash work.

That's not cost free.

That costs real world electricity in copious amounts.
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starboi
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by starboi »

vanbogle59 wrote: Thu May 13, 2021 11:03 am
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.


If you guys think you can print billions of dollars by copy pasting an altcoin, why don't you go do it?
Last edited by starboi on Thu May 13, 2021 11:24 am, edited 1 time in total.
decapod10
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

vanbogle59 wrote: Thu May 13, 2021 11:03 am
watchnerd wrote: Thu May 13, 2021 9:35 am
vanbogle59 wrote: Thu May 13, 2021 8:44 am

"Those aren't commodities, just numeric models for commodities"
OK. Assume they are actual, real commodities. How do they look now?
And it dawns on you that they are infinitely replaceable, at 0 cost, trafficking is opaque...
You lost me at that point.

If Ethereum is used as "gas" to pay transaction costs on the Ethereum network (used by DeFi applications running on it), and they have to be mined, which takes capital investment and energy, how are they infinitely replaceable at 0 cost?
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.
The question is, if you just make a clone of Ethereum, why would anyone use it if they are already using Ethereum? Why would thousands of miners/stakers/users spend all their time moving over for an exact clone? Who is going to continue development on this new clone?

Certainly, it is possible that Ethereum could be replaced by a technologically superior blockchain. That is one reason why Cardano, for example, is so big. It is a direct competitor to Ethereum, proponents feels that it is a better option.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

starboi wrote: Thu May 13, 2021 11:15 am If you guys think you can print billions of dollars by starting an altcoin, why don't you go do it?
Because I understand the economics of encrypted blockchain systems?

Digital assets don't have 0 cost if you can't copy them freely.
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starboi
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by starboi »

watchnerd wrote: Thu May 13, 2021 11:20 am
starboi wrote: Thu May 13, 2021 11:15 am If you guys think you can print billions of dollars by starting an altcoin, why don't you go do it?
Because I understand the economics of encrypted blockchain systems?

Digital assets don't have 0 cost if you can't copy them freely.
I was talking to vanbogle. You correctly pointed out the cost of PoW / PoS.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

decapod10 wrote: Thu May 13, 2021 11:18 am Certainly, it is possible that Ethereum could be replaced by a technologically superior blockchain. That is one reason why Cardano, for example, is so big. It is a direct competitor to Ethereum, proponents feels that it is a better option.
FWIW, Cardano has been on an upward tear, while Bitcoin and Ethereum are still struggling, since Musk's tweet.

+13-14% in USD last 24 hours

+20%+ in BTC or ETH.

https://coinmarketcap.com/currencies/cardano/
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txhill
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

watchnerd wrote: Thu May 13, 2021 11:46 am
decapod10 wrote: Thu May 13, 2021 11:18 am Certainly, it is possible that Ethereum could be replaced by a technologically superior blockchain. That is one reason why Cardano, for example, is so big. It is a direct competitor to Ethereum, proponents feels that it is a better option.
FWIW, Cardano has been on an upward tear, while Bitcoin and Ethereum are still struggling, since Musk's tweet.

+13-14% in USD last 24 hours

+20%+ in BTC or ETH.

https://coinmarketcap.com/currencies/cardano/
There's a huge speculative frenzy in the low energy use alternatives. Nano has pretty much doubled since the tweet. I'm sure some traders are making a killing on these altcoins right now, but I view it as just noise.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

txhill wrote: Thu May 13, 2021 12:10 pm There's a huge speculative frenzy in the low energy use alternatives. Nano has pretty much doubled since the tweet. I'm sure some traders are making a killing on these altcoins right now, but I view it as just noise.
I don't hold Nano, but I do hold Cardano.

Is it noise, or the market hedging future outcomes?
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txhill
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

watchnerd wrote: Thu May 13, 2021 12:13 pm
txhill wrote: Thu May 13, 2021 12:10 pm There's a huge speculative frenzy in the low energy use alternatives. Nano has pretty much doubled since the tweet. I'm sure some traders are making a killing on these altcoins right now, but I view it as just noise.
I don't hold Nano, but I do hold Cardano.

Is it noise, or the market hedging future outcomes?
It's multibillion dollar noise. There's still no one actually using ADA or NANO, although that could change with sufficient adoption over time.

And by noise, I mean for sure speculators are buying them out of a hope that Musk tweets about that particular coin next week.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

watchnerd wrote: Thu May 13, 2021 12:13 pm
txhill wrote: Thu May 13, 2021 12:10 pm There's a huge speculative frenzy in the low energy use alternatives. Nano has pretty much doubled since the tweet. I'm sure some traders are making a killing on these altcoins right now, but I view it as just noise.
I don't hold Nano, but I do hold Cardano.

Is it noise, or the market hedging future outcomes?
Elon says he wants a more energy efficient crypto, Cardano is I believe the largest crypto by market cap that runs on Proof of Stake. It would be probably one of the top 2 or 3 most likely coins he would choose. This last move was mostly out of reaction to Elon's tweet on speculation that Tesla will accept Cardano/ADA.
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vanbogle59
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

starboi wrote: Thu May 13, 2021 11:15 am
vanbogle59 wrote: Thu May 13, 2021 11:03 am
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.


If you guys think you can print billions of dollars by copy pasting an altcoin, why don't you go do it?
Isn't that exactly what DOGE is?
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vanbogle59
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

decapod10 wrote: Thu May 13, 2021 11:18 am
vanbogle59 wrote: Thu May 13, 2021 11:03 am
watchnerd wrote: Thu May 13, 2021 9:35 am
vanbogle59 wrote: Thu May 13, 2021 8:44 am

"Those aren't commodities, just numeric models for commodities"
OK. Assume they are actual, real commodities. How do they look now?
And it dawns on you that they are infinitely replaceable, at 0 cost, trafficking is opaque...
You lost me at that point.

If Ethereum is used as "gas" to pay transaction costs on the Ethereum network (used by DeFi applications running on it), and they have to be mined, which takes capital investment and energy, how are they infinitely replaceable at 0 cost?
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.
The question is, if you just make a clone of Ethereum, why would anyone use it if they are already using Ethereum? Why would thousands of miners/stakers/users spend all their time moving over for an exact clone? Who is going to continue development on this new clone?

Certainly, it is possible that Ethereum could be replaced by a technologically superior blockchain. That is one reason why Cardano, for example, is so big. It is a direct competitor to Ethereum, proponents feels that it is a better option.
These ideas were meant as the thought experiment re: "assume they are actual, real commodities".
Wheat is not a commodity because some people already bought wheat. That's just an arguement for first movers or sunk cost. More of a fashion/custom than a commodity.
And copper is not replaced by a copperx.
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starboi
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by starboi »

vanbogle59 wrote: Thu May 13, 2021 12:28 pm
starboi wrote: Thu May 13, 2021 11:15 am
vanbogle59 wrote: Thu May 13, 2021 11:03 am
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.


If you guys think you can print billions of dollars by copy pasting an altcoin, why don't you go do it?
Isn't that exactly what DOGE is?
Doge didn't crash BTC.
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vanbogle59
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

vanbogle59 wrote: Thu May 13, 2021 12:33 pm Wheat is not a commodity because some people already bought wheat.
Now that I think about it....
Ethanol might be a commodity just because people already bought ethanol.
So, maybe imbedded, built-out, infrastructure can give the first mover the commoditization???

I do wonder how robust that would be in a digital environment.
Maybe like, MS-DOS used to be a commodity?
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

starboi wrote: Thu May 13, 2021 12:49 pm Doge didn't crash BTC.
NOT YET!

Sorry. That was just too easy. :D
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

vanbogle59 wrote: Thu May 13, 2021 12:33 pm
decapod10 wrote: Thu May 13, 2021 11:18 am
vanbogle59 wrote: Thu May 13, 2021 11:03 am
watchnerd wrote: Thu May 13, 2021 9:35 am
vanbogle59 wrote: Thu May 13, 2021 8:44 am

"Those aren't commodities, just numeric models for commodities"
OK. Assume they are actual, real commodities. How do they look now?
And it dawns on you that they are infinitely replaceable, at 0 cost, trafficking is opaque...
You lost me at that point.

If Ethereum is used as "gas" to pay transaction costs on the Ethereum network (used by DeFi applications running on it), and they have to be mined, which takes capital investment and energy, how are they infinitely replaceable at 0 cost?
What did it cost to start Ethereum?
What would it cost to start EthereumX? Which would do exactly the same thing.

In fact, isn't the copycat even cheaper? Because these are all open source? So, just cut and paste? You don't have to be nearly as smart as the first guy.
The question is, if you just make a clone of Ethereum, why would anyone use it if they are already using Ethereum? Why would thousands of miners/stakers/users spend all their time moving over for an exact clone? Who is going to continue development on this new clone?

Certainly, it is possible that Ethereum could be replaced by a technologically superior blockchain. That is one reason why Cardano, for example, is so big. It is a direct competitor to Ethereum, proponents feels that it is a better option.
These ideas were meant as the thought experiment re: "assume they are actual, real commodities".
Wheat is not a commodity because some people already bought wheat. That's just an arguement for first movers or sunk cost. More of a fashion/custom than a commodity.
And copper is not replaced by a copperx.
I've thought about how to classify crypto for sure, and I suspect it doesn't really fit cleanly into any specific category, but I still think commodity seems to be reasonably close.

EthereumX and Ethereum would not be interchangeable in my mind. You cannot buy EtherX and use it for transactions on Ethereum. Commodities are interchangeable with other goods in the same type. Ether and EtherX are not interchangeable to me. If I have an NFT on Ethereum that I am trying to give to someone, generating 1000000000 EtherX is not going to help me with that goal. I need to have Ether to do this transaction, there are no other replacements for Ether in this scenario. I can't process any transactions on Uniswap by paying with EtherX, I can't do any lending via AAVE with EtherX. I can't use BTC to pay for transactions on Uniswap, nor ADA, nor DOGE.

Edit to add:

This is what investopedia defines as a commodity:

1) A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type.
Ether is all interchangeable yes. EtherX is not interchangeable with Ether.


2) Commodities are most often used as inputs in the production of other goods or services.
Yes. Ether is used to pay for use of the Ethereum network, which is a service that is provided to the user. The Ethereum Network can be used to produce other services as well since developers can build applications on top of the network to power their applications.


3) Investors and traders can buy and sell commodities directly in the spot (cash) market or via derivatives such as futures and options.
This is mostly correct I believe. Not sure what the options market is like for crypto.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

decapod10 wrote: Thu May 13, 2021 12:59 pm 1) A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type.
Ether is all interchangeable yes. EtherX is not interchangeable with Ether.
I think that just means Ether and EtherX are not the same type of commodity. Like wheat vs corn.
I actually think this is one of the places where the crypto IS analogous to a commodity.
Any ton of pork bellies can be exchanged for any other (btw, interesting history of what it takes to make that happen)
Any 100 BTC is interchangable with any other 100BTC
But the same could be said for the digit 9. And I don't think it's a commodity.
decapod10 wrote: Thu May 13, 2021 12:59 pm 2) Commodities are most often used as inputs in the production of other goods or services.
Yes. Ether is used to pay for use of the Ethereum network, which is a service that is provided to the user. The Ethereum Network can be used to produce other services as well since developers can build applications on top of the network to power their applications.
If there were some product or service that required the use of some particular crypto, then I think the commodity arguement is over.
Is there?
You can't make bread without wheat. You can't make steel without iron.
You can't make/do ????? without crypto.

decapod10 wrote: Thu May 13, 2021 12:59 pm 3) Investors and traders can buy and sell commodities directly in the spot (cash) market or via derivatives such as futures and options.
This is mostly correct I believe. Not sure what the options market is like for crypto.
This is more just a description of commodity markets. Something can be a commodity without a market.
I don't see much value in this idea.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

vanbogle59 wrote: Thu May 13, 2021 1:24 pm
If there were some product or service that required the use of some particular crypto, then I think the commodity arguement is over.
Is there?
You can't make bread without wheat. You can't make steel without iron.
You can't make/do ????? without crypto.
How do you determine what product or service is sufficiently unique enough for you to be acceptable? You can't make steel with iron, but you can still build houses and ships without iron. You can build machines with other types of metal. They may not be as good, but you can still do it.

Yes I can make bread without wheat as well.

The Ethereum Network runs on Ether only. Anything that you want to do that requires the use of Ethereum MUST use Ether. The guy who bought the Beeple NFT for $69 million dollars cannot sell or transfer his NFT without Ether, full stop. If I want to play a game like Cryptokitties, I need to have Ether, full stop. If the India Covid relief fund wants to exchange it's $1 billion dollars worth Shiba Inu tokens for fiat, it needs to exchange Shiba Inu to something else that an exchange like Coinbase will trade for fiat. This exchange (Uniswap, Sushiswap, whatever) requires Ether for that transaction, full stop. There is no alternative. No amount of EtherX will help you. Maybe you don't think that these services are important, but I would imagine to the Beeple owner and the India Covid relief fund, Ether is very important to them right now.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

decapod10 wrote: Thu May 13, 2021 1:37 pm
vanbogle59 wrote: Thu May 13, 2021 1:24 pm
If there were some product or service that required the use of some particular crypto, then I think the commodity arguement is over.
Is there?
You can't make bread without wheat. You can't make steel without iron.
You can't make/do ????? without crypto.
How do you determine what product or service is sufficiently unique enough for you to be acceptable? You can't make steel with iron, but you can still build houses and ships without iron. You can build machines with other types of metal. They may not be as good, but you can still do it.

Yes I can make bread without wheat as well.

The Ethereum Network runs on Ether only. Anything that you want to do that requires the use of Ethereum MUST use Ether. The guy who bought the Beeple NFT for $69 million dollars cannot sell or transfer his NFT without Ether, full stop. If I want to play a game like Cryptokitties, I need to have Ether, full stop. If the India Covid relief fund wants to exchange it's $1 billion dollars worth Shiba Inu tokens for fiat, it needs to exchange Shiba Inu to something else that an exchange like Coinbase will trade for fiat. This exchange (Uniswap, Sushiswap, whatever) requires Ether for that transaction, full stop. There is no alternative. No amount of EtherX will help you. Maybe you don't think that these services are important, but I would imagine to the Beeple owner and the India Covid relief fund, Ether is very important to them right now.
You seem to think I am expressing judgement. I am actually trying not to.
I am agnostic about the little I know and probably ignorant about a lot more.

I understand that you cannot modify the New Jersey unemployment system without a COBOL compiler.
But you certainly could write a new one.
Is ETH just the next COBOL? If yes, it's not a commodity.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

vanbogle59 wrote: Thu May 13, 2021 2:19 pm
decapod10 wrote: Thu May 13, 2021 1:37 pm
vanbogle59 wrote: Thu May 13, 2021 1:24 pm
If there were some product or service that required the use of some particular crypto, then I think the commodity arguement is over.
Is there?
You can't make bread without wheat. You can't make steel without iron.
You can't make/do ????? without crypto.
How do you determine what product or service is sufficiently unique enough for you to be acceptable? You can't make steel with iron, but you can still build houses and ships without iron. You can build machines with other types of metal. They may not be as good, but you can still do it.

Yes I can make bread without wheat as well.

The Ethereum Network runs on Ether only. Anything that you want to do that requires the use of Ethereum MUST use Ether. The guy who bought the Beeple NFT for $69 million dollars cannot sell or transfer his NFT without Ether, full stop. If I want to play a game like Cryptokitties, I need to have Ether, full stop. If the India Covid relief fund wants to exchange it's $1 billion dollars worth Shiba Inu tokens for fiat, it needs to exchange Shiba Inu to something else that an exchange like Coinbase will trade for fiat. This exchange (Uniswap, Sushiswap, whatever) requires Ether for that transaction, full stop. There is no alternative. No amount of EtherX will help you. Maybe you don't think that these services are important, but I would imagine to the Beeple owner and the India Covid relief fund, Ether is very important to them right now.
You seem to think I am expressing judgement. I am actually trying not to.
I am agnostic about the little I know and probably ignorant about a lot more.

I understand that you cannot modify the New Jersey unemployment system without a COBOL compiler.
But you certainly could write a new one.
Is ETH just the next COBOL? If yes, it's not a commodity.
My car runs on gas. But I could make a car that runs on solar power. It doesn't make oil any less of a commodity in my view.

Well, I think what I'm trying to express is, that if you feel the output of Ethereum Network provides some service right now, then to me Ether becomes pretty close to a commodity in the way it functions. Maybe not perfect, but pretty close. I think one sticking point is that crypto doesn't really get consumed like most commodities do, though that will change in July for Ether when it gets burned on every transaction. Then it really starts to look a lot like oil in a lot of ways.

To me, it doesn't really matter whether a similar function can be produced by a different product in my view, or if the function is replaceable in the future. If something is being is being used now, and it functions like a commodity, then it seems like it is a commodity. That doesn't make it a good investment, and maybe it will be a worthless commodity 2 years from now or 6 months from now.

Ultimately, it probably doesn't really matter. I don't think to me saying it is a commodity or not a commodity has any bearing on its value.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

I skipped the most important part of your post!
vanbogle59 wrote: Thu May 13, 2021 2:19 pm How do you determine what product or service is sufficiently unique enough for you to be acceptable?
That, detective, is the right question

Once upon a time, you couldn't make a sword without bronze. Bronze became a commodity.
Along came iron. And a new age started. And iron became the commodity. Bronze became (relatively speaking) irrelevant.

Once upon a different time, you couldn't write a business application without COBOL.
(OK, I know that's not really true. But play along. I'll bet there were wooden swords in the bronze age, too.)
So, was there a COBOL age? Followed by an C++ age. Then the JAVA age.

It's hard to use the word commodity for something so transient.
Especially in Bogle-land where investments are supposed to have 10+ yr time horizons....
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by vanbogle59 »

decapod10 wrote: Thu May 13, 2021 2:56 pm I don't think to me saying it is a commodity or not a commodity has any bearing on its value.
On this point, we certainly agree.
:sharebeer
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

vanbogle59 wrote: Thu May 13, 2021 2:56 pm I skipped the most important part of your post!
vanbogle59 wrote: Thu May 13, 2021 2:19 pm How do you determine what product or service is sufficiently unique enough for you to be acceptable?
That, detective, is the right question

Once upon a time, you couldn't make a sword without bronze. Bronze became a commodity.
Along came iron. And a new age started. And iron became the commodity. Bronze became (relatively speaking) irrelevant.

Once upon a different time, you couldn't write a business application without COBOL.
(OK, I know that's not really true. But play along. I'll bet there were wooden swords in the bronze age, too.)
So, was there a COBOL age? Followed by an C++ age. Then the JAVA age.

It's hard to use the word commodity for something so transient.
Especially in Bogle-land where investments are supposed to have 10+ yr time horizons....
Yeah, certainly I agree with that it could be very transient. I much more willing to bet that people will be eating wheat bread in 10 years than using Ethereum in 10 years, lol. But I think generally thinking about commodities is probably the best way to think about the value of Ether, in terms of how value is generated. It's really the best analogy I can think of. People who are betting on Ether are hoping that they are buying oil before its use became widespread. If Ethereum does become a permanent fixture, then it will reach a plateau at some point in terms of demand on the network, Ether prices will be more stable and the "true" value of it will be more well known. At that point, it will probably act more like a traditional commodity would be my guess, though the supply of crypto is probably much more stable and transparent than commodities. The big question is will Ether be worth then than it is now? Who knows.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

Elon pumping DOGE now, hold on to your hats
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

decapod10 wrote: Thu May 13, 2021 6:05 pm Elon pumping DOGE now, hold on to your hats
I still don't understand how DOGE, which is also PoW, is energy saving compared to Bitcoin.

Is it just because it's earlier in the nonce discovery cycle?
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

watchnerd wrote: Thu May 13, 2021 6:14 pm
decapod10 wrote: Thu May 13, 2021 6:05 pm Elon pumping DOGE now, hold on to your hats
I still don't understand how DOGE, which is also PoW, is energy saving compared to Bitcoin.

Is it just because it's earlier in the nonce discovery cycle?
That question is a little out of my pay grade, I will give the Google answer:

https://cointelegraph.com/news/which-gr ... r-payments

"Elon Musk’s long-standing favorite Dogecoin could be the dark horse (dark dog?) in this race. The meme coin actually piggybacks much of its mining on the Litecoin network, which uses Proof-of-Work. But while Bitcoin mining employs the ultra-complex SHA-256 algorithm, Dogecoin and Litecoin are mined using Scrypt, which is energy efficient and quicker (though considerably less secure). Interestingly enough, while TRG Data centers puts LTC’s power usage at 18.522 KWh per transaction, Dogecoin is estimated to use just 0.12 KWh per transaction."
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

decapod10 wrote: Thu May 13, 2021 6:45 pm

That question is a little out of my pay grade, I will give the Google answer:

https://cointelegraph.com/news/which-gr ... r-payments

"Elon Musk’s long-standing favorite Dogecoin could be the dark horse (dark dog?) in this race. The meme coin actually piggybacks much of its mining on the Litecoin network, which uses Proof-of-Work. But while Bitcoin mining employs the ultra-complex SHA-256 algorithm, Dogecoin and Litecoin are mined using Scrypt, which is energy efficient and quicker (though considerably less secure). Interestingly enough, while TRG Data centers puts LTC’s power usage at 18.522 KWh per transaction, Dogecoin is estimated to use just 0.12 KWh per transaction."
Oh, yeah, that completely explains it.

It's less secure.

That could have some interesting unintended consequences if it gets big and popular.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by txhill »

watchnerd wrote: Thu May 13, 2021 7:20 pm
decapod10 wrote: Thu May 13, 2021 6:45 pm

That question is a little out of my pay grade, I will give the Google answer:

https://cointelegraph.com/news/which-gr ... r-payments

"Elon Musk’s long-standing favorite Dogecoin could be the dark horse (dark dog?) in this race. The meme coin actually piggybacks much of its mining on the Litecoin network, which uses Proof-of-Work. But while Bitcoin mining employs the ultra-complex SHA-256 algorithm, Dogecoin and Litecoin are mined using Scrypt, which is energy efficient and quicker (though considerably less secure). Interestingly enough, while TRG Data centers puts LTC’s power usage at 18.522 KWh per transaction, Dogecoin is estimated to use just 0.12 KWh per transaction."
Oh, yeah, that completely explains it.

It's less secure.

That could have some interesting unintended consequences if it gets big and popular.
There also are significant game theory issues with Doge piggybacking off of LTC--if one chain becomes cheap to attack, the other will go too.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by YRT70 »

I have some Bitcoin but I'm slowly growing less enthusiast about it. I'm starting to feel that the energy consumption is going to be a bigger and bigger issue for more people. I'm considering selling and switching to ETH. Any opinions? Can anyone reinstall my faith in BTC?

PS. performance chasing? guilty as charged. Or maybe I'm chasing momentum.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by decapod10 »

YRT70 wrote: Sat May 15, 2021 8:47 am I have some Bitcoin but I'm slowly growing less enthusiast about it. I'm starting to feel that the energy consumption is going to be a bigger and bigger issue for more people. I'm considering selling and switching to ETH. Any opinions? Can anyone reinstall my faith in BTC?

PS. performance chasing? guilty as charged. Or maybe I'm chasing momentum.
ETH right now is also not particularly energy efficient, though ETH 2.0 will be 99% more efficient than it is currently, 2.0 is not a finished product.

I'm probably not the one to convince you to keep BTC since I have never owned any, but I feel that to understand an argument fully it's good to be able to argue the other side. So, here are some arguments for BTC:

1. Bitcoin rarely changes - to BTC proponents this is a feature. It gives them confidence that the tokenomics of BTC will not change, unlike ETH which changes directions more frequently.

2. BTC is secure - it has been around a long time and has proven to work

3. BTC has the biggest name brand and network effect

4. It is possible to build on extra functionality using layer 2, such as the Lightning Network

5. BTC has better distribution (less concentrated) than most other coins.

6. BTC supply has a hard cap and a decreasing rate of production
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by am »

YRT70 wrote: Sat May 15, 2021 8:47 am I have some Bitcoin but I'm slowly growing less enthusiast about it. I'm starting to feel that the energy consumption is going to be a bigger and bigger issue for more people. I'm considering selling and switching to ETH. Any opinions? Can anyone reinstall my faith in BTC?

PS. performance chasing? guilty as charged. Or maybe I'm chasing momentum.
Musk tweeting and manipulating the currencies doesn’t make it an issue for most people. Etherium seems more useful given all the applications but who knows what the future will bring?
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

I hold both BTC and ETH at relative market weights to each other.

I think they have very different value propositions.

I thought this was an interesting conversation from two somewhat opposing analysts on the risk/reward of the two:

https://www.youtube.com/watch?v=Dul7G-d ... nedPodcast
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by blueberrypi »

I would trade some of your bitcoin for a mix of Ether, Cardano, and maybe some defi projects like AAVE. Long term I see stakable coins taking the lead over proof of work coins, and Ether likely topping BTC market cap. Cardano has been surging recently and Ethereum buyers are probably looking ahead to ETH 2.0 or they wouldn't be so bullish. My .02.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Aaand...it'sgone »

I'm sure this has been asked elsewhere, but there are just so many crypto threads to sift through:

What is the easiest way to make your own little crypto ETF? Is there an app somewhere that can help you design your own cap weighted fund? Say with the top 20 coins? Or do something ridiculous like design an equal weighted fund and try to get lucky on alt coin growth?

I'm probably otherthinking, considering my modest little crypto portfolio... But it's a fun distraction.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by YRT70 »

blueberrypi wrote: Sat May 15, 2021 10:50 am I would trade some of your bitcoin for a mix of Ether, Cardano, and maybe some defi projects like AAVE.
Thanks. Those 3 was exactly what I was thinking. Too bad I didn't have available budget last week.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by YRT70 »

decapod10 wrote: Sat May 15, 2021 10:08 am So, here are some arguments for BTC:

1. Bitcoin rarely changes - to BTC proponents this is a feature. It gives them confidence that the tokenomics of BTC will not change, unlike ETH which changes directions more frequently.

2. BTC is secure - it has been around a long time and has proven to work

3. BTC has the biggest name brand and network effect

4. It is possible to build on extra functionality using layer 2, such as the Lightning Network

5. BTC has better distribution (less concentrated) than most other coins.

6. BTC supply has a hard cap and a decreasing rate of production
Those are good points. I might give it some more time.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

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Aaand...it'sgone wrote: Sat May 15, 2021 11:05 am I'm sure this has been asked elsewhere, but there are just so many crypto threads to sift through:

What is the easiest way to make your own little crypto ETF? Is there an app somewhere that can help you design your own cap weighted fund? Say with the top 20 coins? Or do something ridiculous like design an equal weighted fund and try to get lucky on alt coin growth?

I'm probably otherthinking, considering my modest little crypto portfolio... But it's a fun distraction.
You can look at https://coinmarketcap.com/

Here's what I do:

1. Allocate to BTC and ETH completely by market weight in my Roth using GBTC and ETHE. There is also a "Grayscale discount", which may be permanent or may turn into a big bonus if the Trusts ever transition to being true ETFs.

2. Allocate the remaining funds to the alt coins I can get on my exchange, excluding stable coins, which happens to be Coinbase.

3. You can't easily make a Total Crypto Market fund so you have to decide how you're going to deal with the long tail of the alt space. You can set a minimum market cap or limit the number of alt coins you hold. I found that once I got to 16+ alt coins, the slices get really small if you're cap weighting, like 0.25% of the portfolio. So there are diminishing returns to moving down the long tail when it comes to how much each extra addition will improve tracking of the total market.

4. Figure out how you're going to deal with the fact that the mark-to-market weighting of the alt coins can change rapidly in a short amount of time. DOGE wasn't even in the running months ago and now it's in the Top 5. If you didn't previously hold it, it's a new big entrant that probably wasn't in your DIY index. But if you end up frequently selling to rebalance the index, the STCG taxes will crush your profits. So you need to figure out your point of view on tracking error and how to deal with it.
Last edited by watchnerd on Sat May 15, 2021 12:15 pm, edited 1 time in total.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by JonnyDVM »

Cardano shooting up. The key for crypto investing is to see which one is popping up in crypto chatter as overhyped and actually a bad investment and then buy that one :happy
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by watchnerd »

JonnyDVM wrote: Sat May 15, 2021 11:46 am Cardano shooting up. The key for crypto investing is to see which one is popping up in crypto chatter as overhyped and actually a bad investment and then buy that one :happy
"The trend is your friend"

As some say.

My Cardano entry points were $1.67 - $1.74, 5 days ago.

So that's about 34% ROI in 5 days.
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Re: Cryptocurrency - Bitcoin Continues to Soar!

Post by Aaand...it'sgone »

watchnerd wrote: Sat May 15, 2021 11:32 am
Aaand...it'sgone wrote: Sat May 15, 2021 11:05 am I'm sure this has been asked elsewhere, but there are just so many crypto threads to sift through:

What is the easiest way to make your own little crypto ETF? Is there an app somewhere that can help you design your own cap weighted fund? Say with the top 20 coins? Or do something ridiculous like design an equal weighted fund and try to get lucky on alt coin growth?

I'm probably otherthinking, considering my modest little crypto portfolio... But it's a fun distraction.
You can look at https://coinmarketcap.com/

Here's what I do:

1. Allocate to BTC and ETH completely by market weight in my Roth using GBTC and ETHE. There is also a "Grayscale discount", which may be permanent or may turn into a big bonus if the Trusts ever transition to being true ETFs.

2. Allocate the remaining funds to the alt coins I can get on my exchange, excluding stable coins, which happens to be Coinbase.

3. You can't easily make a Total Crypto Market fund so you have to decide how you're going to deal with the long tail of the alt space. You can set a minimum market cap or limit the number of alt coins you hold. I found that once I got to 16+ alt coins, the slices get really small if you're cap weighting, like 0.25% of the portfolio. So there are diminishing returns to moving down the long tail when it comes to how much each extra addition will improve tracking of the total market.

4. Figure out how you're going to deal with the fact that the mark-to-market weighting of the alt coins can change rapidly in a short amount of time. DOGE wasn't even in the running months ago and now it's in the Top 5. If you didn't previously hold it, it's a new big entrant that probably wasn't in your DIY index. But if you end up frequently selling to rebalance the index, the STCG taxes will crush your profits. So you need to figure out your point of view on tracking error and how to deal with it.
Thanks - this is helpful. I hadn't considered grayscale as a way to hold crypto in my Roth. I'm also using Coinbase, so that does limit which alts I have access to.

I might just do something like:

1. Limit to top 10 alt coins.
2. I made a little spreadsheet to calculate % of the total market cap for those alts. (just manually updating the market caps for now).
3. Use those percentages to determine how much of each coin to buy (I buy a little bit every month, as part of my 'fun money' allocation).
4. Probably just hold instead of rebalancing. Or, maybe set a rule for rebalancing (like, if something goes xxx%, consider taking profits).

Ultimately, my alt coin allocation is small compared to the rest of my portfolio - so it's probably not worth going nuts trying to rebalance it after every tweet. I know that it's pretty risky to keep buying and holding during what could well be the top of alt season. But, maybe this will help me be more prepared in case we get another alt season in 4 years.
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