Prove Me Wrong: Cryptocurrencies are NOT good investments

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JBTX
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by JBTX »

qwerty123 wrote: Fri Apr 30, 2021 11:42 am
JBTX wrote: Tue Apr 27, 2021 11:05 pm
ohboy! wrote: Tue Apr 27, 2021 10:45 pm It's hard to understand anything outside of our experience. That's why if you experience crypto you have a better chance of understanding it.

Capital markets as we know them are changing. Markets were once primarily traded in force. There were no written contracts, or courts. Those are actually relatively new inventions that have perpetuated capitalism, and more broadly the evolution of humanity, to great heights. Where we are going is more efficient, requires less defense of force, and gives access to capitalization never seen before. There is endless capital that is not liquid in the world. All value yet to be unlocked. What crypto is creating is a world of tokenizing anything. Owning part of a business, part of land, part of any capital, and having it be tradeable at any time. The contract is an execution of code and requires no intermediaries. It might sound like a crazy fantasy world but we are already living in it for those willing to look beyond a headline. And as such, the early adopters are being rewarded.

Saying this, I am a longtime Bitcoin holder, but I hardly see any more value at this point in Bitcoin than I do Doge. So if you only look at Bitcoin you are missing the real story. It's a complex ecosystem and the barrier to entry to understand it is still a bit high though it's becoming easier and easier by the day. For those who have a comfy retirement there is little incentive to do so, for now, but I have seen that change gradually over the past couple of years as well. Even here.
This is one of the reasons I opened a coinbase account and threw in $500. Not that it will go anywhere, but by dabbling in it somewhat keeps me interested and in the loop. I highly doubt these particular currencies are good long term investments, because so many things are working against them. But I don't know. But whether btc or ETH go up or down, there is the possibility that DeFi evolves into something real.
I would personally recommend taking it a step further to get a real idea of the ecosystem. Buy some USDC and ETH, transfer it to a wallet, and deposit some funds into compound, curve, make trades on uniswap, transfer it to a layer 2 (polygon network is fun, and fees are incredibly low - this is a great example of what the future might look like).

Buy some Bitcoin and transfer it to a lightning wallet - buy a giftcard with it.

Just buying and holding on coinbase really feels like it's just scratching the surface and doesn't give a great idea of where things can / will be going.
My daughter is into art, and I told her she should look at NFTs. Upon investigating, to create an NFT, you have to buy etherium "gas" to create the blockchain, which is in the ballpark of $100 but can vary widely. I've tried to find price tables from GWEI to dollars, but I can't for the life of me figure out how to estimate the price of gas. This seems like a God awfully expensive way to conduct transactions, greatly diminishing the utility of the whole concept.
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HanSolo
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

Hustlinghustling wrote: Tue May 04, 2021 9:03 pm Why do Americans need expensive health insruance? I have a list of "developed countries" where citizens are fine without it.
That may be a different topic. Perhaps a new thread would be appropriate.
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Hustlinghustling
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Hustlinghustling »

HanSolo wrote: Tue May 04, 2021 9:07 pm
Hustlinghustling wrote: Tue May 04, 2021 9:03 pm Why do Americans need expensive health insruance? I have a list of "developed countries" where citizens are fine without it.
That may be a different topic. Perhaps a new thread would be appropriate.
Like how giving a list of "3rd world countries" with access to USD is a different topic to Argentina's specific situation. I hope you can see a bit of the American blinders even in this.
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HanSolo
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HanSolo »

Hustlinghustling wrote: Tue May 04, 2021 9:12 pm
HanSolo wrote: Tue May 04, 2021 9:07 pm
Hustlinghustling wrote: Tue May 04, 2021 9:03 pm Why do Americans need expensive health insruance? I have a list of "developed countries" where citizens are fine without it.
That may be a different topic. Perhaps a new thread would be appropriate.
Like how giving a list of "3rd world countries" with access to USD is a different topic to Argentina's specific situation. I hope you can see a bit of the American blinders even in this.
Strawman again. Nobody proposed giving a list of 3rd world countries.

Not to be repetitive, but telling people they have blinders is not a way to move a conversation forward. I'm repeating that because perhaps you missed my comment on that.
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SlowMovingInvestor
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

GR8FUL-D wrote: Tue May 04, 2021 8:47 pm [ About citizens of 3rd world countries]
Crypto is--or at the very least has the potential to be--massively valuable to them--literally life-changing. And a huge chunk of them own cell phones and have internet access (more and more every day). Now all of the sudden--through crypto--they have access to a stable currency (stable coins), a currency that isn't constantly being devalued (bitcoin), loans (dApps), a way to earn interest with their savings, etc.. So clearly crypto is valuable to them.
Use of crypto isn't going to increase goods and services available in the 3rd world country's economy. If people start transacting in crypto for local goods and services, it just means that prices for (say) food, shelter will adjust accordingly. Even more importantly, for the poor in 3rd world countries (heck, even here), the main problem is generating income (even for consumption, let alone investment in crypto) ! It should be added too that putting money into crypto banks (for interest) that essentially loan it out for people to speculate is fine for those who can afford to lose it, but not for those for whom they're life savings, especially in countries without safety nets.

[And they can't get loans without putting up crypto as collateral either. They'd be better off with gold, which can be used to get gold loans and can be used for jewelry too]

This article (from a crypto fan no less) says it well:

https://www.forbes.com/sites/yayafanusi ... 85202f456a

I should also add that Kiva and other organizations have tried microloans and other methods of financial inclusion for a while, sometimes for decades. Crypto isn't a silver bullet that magically solves these problems. Oh, and I've spent time in 3rd world countries myself.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Hustlinghustling »

SlowMovingInvestor wrote: Tue May 04, 2021 9:18 pm
GR8FUL-D wrote: Tue May 04, 2021 8:47 pm [ About citizens of 3rd world countries]
Crypto is--or at the very least has the potential to be--massively valuable to them--literally life-changing. And a huge chunk of them own cell phones and have internet access (more and more every day). Now all of the sudden--through crypto--they have access to a stable currency (stable coins), a currency that isn't constantly being devalued (bitcoin), loans (dApps), a way to earn interest with their savings, etc.. So clearly crypto is valuable to them.
Use of crypto isn't going to increase goods and services available in the 3rd world country's economy. If people start transacting in crypto for local goods and services, it just means that prices for (say) food, shelter will adjust accordingly. Even more importantly, for the poor in 3rd world countries (heck, even here), the main problem is generating income -- even it's to buy crypto ! It should be added too that putting money into crypto banks (for interest) that essentially loan it out for people to speculate is fine for those who can afford to lose it, but not for those for whom they're life savings.

This article (from a crypto fan no less) says it well:

https://www.forbes.com/sites/yayafanusi ... 85202f456a

[I should also add that Kiva and other organizations have tried microloans and other methods of financial inclusion for a while, sometimes for decades. Crypto isn't a silver bullet that magically solves these problems]
Fully agree that crypto is not a panacea here and that income and productivity are ultimately what has to be addressed.
There's also the issue of political pressure/persecution and how that overlaps with access to the financial system, which we all take for granted.

Nonetheless, I think we're also crossing into what can be confused as virtue signalling (desiring people to be better off) vs merely value identifying and seeing where there's usefulness for many others in very different circumstances to our own.
S4C5
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by S4C5 »

Obvious ponzi scheme is obvious.

Huge waste of resources and generator of pollution to leave millions of regular people holding the bag while a few elites get super rich.

This should be obvious but we live in a world where people are either forced or shamed to wear ineffective cloth face masks in the lobby of a restaurant but not at the bar to protect themselves from a virus that floats through the air with a 99.4% survival rate to which they already have immunity and for which there is an available vaccine to any adult that wants it. And everyone just goes along with it like everything’s fine and castigates you if you point out the obvious (this masking stuff is illogical and non consistent, Bitcoin doesn’t make sense, and a hundred other obvious things about various topics that most people know is true deep down but will get you banned and ensure you have no friends if you say them).

Making logical sense is so 20th Century.

So... I just sit back and watch.
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HomerJ
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

claypigeon wrote: Tue May 04, 2021 8:24 pmRight now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.
Now imagine if there was a crash, you lost your job, and discovered your "emergency fund" was gone because people who were borrowing your emergency fund to speculate in crypto alt-coins had also gone broke and defaulted on your loans.
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decapod10
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by decapod10 »

JBTX wrote: Tue May 04, 2021 9:06 pm
qwerty123 wrote: Fri Apr 30, 2021 11:42 am
JBTX wrote: Tue Apr 27, 2021 11:05 pm
ohboy! wrote: Tue Apr 27, 2021 10:45 pm It's hard to understand anything outside of our experience. That's why if you experience crypto you have a better chance of understanding it.

Capital markets as we know them are changing. Markets were once primarily traded in force. There were no written contracts, or courts. Those are actually relatively new inventions that have perpetuated capitalism, and more broadly the evolution of humanity, to great heights. Where we are going is more efficient, requires less defense of force, and gives access to capitalization never seen before. There is endless capital that is not liquid in the world. All value yet to be unlocked. What crypto is creating is a world of tokenizing anything. Owning part of a business, part of land, part of any capital, and having it be tradeable at any time. The contract is an execution of code and requires no intermediaries. It might sound like a crazy fantasy world but we are already living in it for those willing to look beyond a headline. And as such, the early adopters are being rewarded.

Saying this, I am a longtime Bitcoin holder, but I hardly see any more value at this point in Bitcoin than I do Doge. So if you only look at Bitcoin you are missing the real story. It's a complex ecosystem and the barrier to entry to understand it is still a bit high though it's becoming easier and easier by the day. For those who have a comfy retirement there is little incentive to do so, for now, but I have seen that change gradually over the past couple of years as well. Even here.
This is one of the reasons I opened a coinbase account and threw in $500. Not that it will go anywhere, but by dabbling in it somewhat keeps me interested and in the loop. I highly doubt these particular currencies are good long term investments, because so many things are working against them. But I don't know. But whether btc or ETH go up or down, there is the possibility that DeFi evolves into something real.
I would personally recommend taking it a step further to get a real idea of the ecosystem. Buy some USDC and ETH, transfer it to a wallet, and deposit some funds into compound, curve, make trades on uniswap, transfer it to a layer 2 (polygon network is fun, and fees are incredibly low - this is a great example of what the future might look like).

Buy some Bitcoin and transfer it to a lightning wallet - buy a giftcard with it.

Just buying and holding on coinbase really feels like it's just scratching the surface and doesn't give a great idea of where things can / will be going.
My daughter is into art, and I told her she should look at NFTs. Upon investigating, to create an NFT, you have to buy etherium "gas" to create the blockchain, which is in the ballpark of $100 but can vary widely. I've tried to find price tables from GWEI to dollars, but I can't for the life of me figure out how to estimate the price of gas. This seems like a God awfully expensive way to conduct transactions, greatly diminishing the utility of the whole concept.
OpenSea and Rarible allow for free minting with some restrictions I think, I've never done it but maybe worth a look.

On Ethereum, total transaction fee = gas price x gas used. The more complicated the transaction (the more computations that the miners computers have to do for you) , the higher "gas used" is. For transfers of ETH between wallets, it usually ends up being a few dollars. Minting a NFT is more intensive and will be higher.

There are gas trackers on the internet that tell you the current gas prices, it's better to try to mint when the gas prices are lower ,(when fewer people are using the network).

I think it is likely that a lot of low cost NFTs will move to layer 2 such as Polygon/Matic, which requires little to no gas for selling.
oldfort
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by oldfort »

Hustlinghustling wrote: Tue May 04, 2021 9:03 pm
HanSolo wrote: Tue May 04, 2021 8:58 pm
Hustlinghustling wrote: Tue May 04, 2021 8:52 pm
HanSolo wrote: Tue May 04, 2021 8:41 pm
Hustlinghustling wrote: Tue May 04, 2021 8:34 pm

speaking of strawmen ...
Asking a question is not a strawman.

If my question is too hard, I'll drop it. But I'll answer yours by saying that there are quite a variety of ways that USD has been transacted in 3rd world countries for many decades. To list all of them, I might have to google that for you.
To answer the specific Argentinian situation with a list of how other developing countries have access to USD seems like a very odd, irrelevant and again, American-biased way to broadbrush the rest of the world as same same.
I didn't say "other developing countries" (strawman again). I said "3rd world countries" which I assumed to include Argentina.
Why do Americans need expensive health insruance? I have a list of "developed countries" where citizens are fine without it.
If we're talking about health care, this thread is veering far from the original topic of crypto.
claypigeon
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by claypigeon »

HanSolo wrote: Tue May 04, 2021 8:39 pm
claypigeon wrote: Tue May 04, 2021 8:24 pm Right now I have $204 in my Gucci wallet slowly losing purchasing power that I can lose or that someone can easily steal. Right now I have about $1000 worth of ADA (cardano) in a digital wallet earning 5-6% APY.
Some bonds are paying that now.
... saved in a 2FA password protector which has a long password
I hope you don't lose that device...
If I wanted to go all in I’d get a yubikey or something
... or that device.
Bonds have transaction fees and delays. With crypto I can “delegate” my wallet and immediately spend anything and everything in it, not waiting for my bond to clear or an asset to sell.

If I lose my device, the password protector is cloud based (encrypted) so I can access it on any device assuming I remember that master password. Or I have it set up to go to my spouse if access is requested and I don’t respond in 72 hours (you can change the timing). I don’t know enough about yubikey to comment on recovery.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by claypigeon »

HomerJ wrote: Tue May 04, 2021 10:10 pm
claypigeon wrote: Tue May 04, 2021 8:24 pmRight now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.
Now imagine if there was a crash, you lost your job, and discovered your "emergency fund" was gone because people who were borrowing your emergency fund to speculate in crypto alt-coins had also gone broke and defaulted on your loans.
That isn’t how staking works, at least for ADA (cardano). One has access to their wallet at all times and all the money in it. The funds inside are used to validate blocks for others using their own currency for transactions. Nothing ever leaves your wallet or can leave your wallet. These systems (proof of stake) are why you don’t need the high electricity needs as wwith the old proof of work protocols with Bitcoin and the older generation. There is next to no electricity generation required making this more sustainable than even printing paper money. This is also why the third generation coin transaction fees are cheaper than running a CC and why ethereum is trying to move to a proof of stake protocol.

I agree Bitcoin and ethereum 1.0 are not sustainable long term. But crypto has produced solutions. This is where the money is
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HomerJ
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

claypigeon wrote: Tue May 04, 2021 11:13 pm
HomerJ wrote: Tue May 04, 2021 10:10 pm
claypigeon wrote: Tue May 04, 2021 8:24 pmRight now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.
Now imagine if there was a crash, you lost your job, and discovered your "emergency fund" was gone because people who were borrowing your emergency fund to speculate in crypto alt-coins had also gone broke and defaulted on your loans.
That isn’t how staking works, at least for ADA (cardano). One has access to their wallet at all times and all the money in it. The funds inside are used to validate blocks for others using their own currency for transactions. Nothing ever leaves your wallet or can leave your wallet. These systems (proof of stake) are why you don’t need the high electricity needs as wwith the old proof of work protocols with Bitcoin and the older generation. There is next to no electricity generation required making this more sustainable than even printing paper money. This is also why the third generation coin transaction fees are cheaper than running a CC and why ethereum is trying to move to a proof of stake protocol.

I agree Bitcoin and ethereum 1.0 are not sustainable long term. But crypto has produced solutions. This is where the money is
Doesn't staking lock up your money? How are you supposed to get your money out for an emergency if you stake it?

Actually, forget liquidity and loan defaults... Just the fact that whatever crypto-currency you have your emergency fund in can drop 80% in value during a bad crash makes it a silly place to keep an "emergency" fund.
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decapod10
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by decapod10 »

HomerJ wrote: Tue May 04, 2021 11:21 pm
claypigeon wrote: Tue May 04, 2021 11:13 pm
HomerJ wrote: Tue May 04, 2021 10:10 pm
claypigeon wrote: Tue May 04, 2021 8:24 pmRight now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.
Now imagine if there was a crash, you lost your job, and discovered your "emergency fund" was gone because people who were borrowing your emergency fund to speculate in crypto alt-coins had also gone broke and defaulted on your loans.
That isn’t how staking works, at least for ADA (cardano). One has access to their wallet at all times and all the money in it. The funds inside are used to validate blocks for others using their own currency for transactions. Nothing ever leaves your wallet or can leave your wallet. These systems (proof of stake) are why you don’t need the high electricity needs as wwith the old proof of work protocols with Bitcoin and the older generation. There is next to no electricity generation required making this more sustainable than even printing paper money. This is also why the third generation coin transaction fees are cheaper than running a CC and why ethereum is trying to move to a proof of stake protocol.

I agree Bitcoin and ethereum 1.0 are not sustainable long term. But crypto has produced solutions. This is where the money is
Doesn't staking lock up your money? How are you supposed to get your money out for an emergency if you stake it?

Actually, forget liquidity and loan defaults... Just the fact that whatever crypto-currency you have your emergency fund in can drop 80% in value during a bad crash makes it a silly place to keep an "emergency" fund.
Not necessarily. ETH staking locks your Ether, though this is because they are trying to transition to a different version. You are actually staking your ETH on the 2.0 chain essentially, which is not currently the main network until the merge happens. Most staking does not lock your coin, though not sure about ADA Specifically.
claypigeon
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by claypigeon »

HomerJ wrote: Tue May 04, 2021 11:21 pm
claypigeon wrote: Tue May 04, 2021 11:13 pm
HomerJ wrote: Tue May 04, 2021 10:10 pm
claypigeon wrote: Tue May 04, 2021 8:24 pmRight now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.
Now imagine if there was a crash, you lost your job, and discovered your "emergency fund" was gone because people who were borrowing your emergency fund to speculate in crypto alt-coins had also gone broke and defaulted on your loans.
That isn’t how staking works, at least for ADA (cardano). One has access to their wallet at all times and all the money in it. The funds inside are used to validate blocks for others using their own currency for transactions. Nothing ever leaves your wallet or can leave your wallet. These systems (proof of stake) are why you don’t need the high electricity needs as wwith the old proof of work protocols with Bitcoin and the older generation. There is next to no electricity generation required making this more sustainable than even printing paper money. This is also why the third generation coin transaction fees are cheaper than running a CC and why ethereum is trying to move to a proof of stake protocol.

I agree Bitcoin and ethereum 1.0 are not sustainable long term. But crypto has produced solutions. This is where the money is
Doesn't staking lock up your money? How are you supposed to get your money out for an emergency if you stake it?

Actually, forget liquidity and loan defaults... Just the fact that whatever crypto-currency you have your emergency fund in can drop 80% in value during a bad crash makes it a silly place to keep an "emergency" fund.
The staking is never locked at least with ADA (cardano). You can even make your own pool to stake with for minimal cost and already likely have the tech to do it. The rewards are kind of locked in that they’re distributed every “epoch” (5 days currently). Pull out before the epoch ends and I don’t think you get any rewards since the last paid epoch. So 5-6% apr minus up to 5 days

And agreed on the currency risk hence why I wouldn’t do that now. Once volatility stabilizes though, or if I had to wire money that day and wanted to save on the $35 fee or whatnot, I’d do this in a heart beat. The best way I can describe 3rd gen crypto, or ethereum if it does transition ever to proof of stake which would be a few years, is to think of it as a flawless feeless digital bank without FDIC insurance and can’t go belly up as it’s not a business trying to make money or be over leveraged. That comes with risk if you buy a non open source or centralized coin, but also means there’s trillions in market cap to replace and tons of bankless markets to grow.

I don’t personally “invest” in crypto as I’m happy with taking what the stock market gives me. I use it to hold currency. Instead of holding a few hundred dollars of cash around the house god forbid one needs to get out of town /natural disaster/ emergency/power outage and no ATMs, I just keep it stored in my digital wallet. I can access that abroad or as long as my phone has power and then convert it to whatever currency is needed later for a 0.1% fee on binance. Safer and way more convenient IMO than carrying around cash in those circumstances. Heck the staking pays the binance fee in a few days.

One could and probably should use a stable coin to do what I’m doing but I haven’t researched those enough to feel confident in them and happy to take the relatively small volatility with ADA (cardano) over researching 3rd gen stable coins. But with a market cap of tens of billions the volatility isn’t as much as one would think.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Hustlinghustling wrote: Tue May 04, 2021 8:23 pm
HanSolo wrote: Tue May 04, 2021 8:14 pm
Hustlinghustling wrote: Tue May 04, 2021 8:10 pm If there's anything capitalism is about, it's consumer choice and options, pros and cons for each. It's like complaining in front of a Starbucks menu ... "why do we need flat whites when we already have cappucinos? Why does it need to exist??"
The difference is that the flat white is something a lot of ordinary people actually want today.
Again, respectfully, your American blinders are up.
I still don't know the difference between a flat white and a latte.
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watchnerd
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

GR8FUL-D wrote: Tue May 04, 2021 8:47 pm Yea, discussing crypto solely from the perspective of a citizen of a 1st World country with a stable government, currency, and financial system is so unbelievably short-sighted. OK, maybe crypto is not particularly useful to you, you're happy with your bank, your investments, your credit cards, your access to loans, etc.. I get it.

But that is not reality for BILLIONS of other people around the world! What do you not understand about that?

Crypto is--or at the very least has the potential to be--massively valuable to them--literally life-changing. And a huge chunk of them own cell phones and have internet access (more and more every day). Now all of the sudden--through crypto--they have access to a stable currency (stable coins), a currency that isn't constantly being devalued (bitcoin), loans (dApps), a way to earn interest with their savings, etc.. So clearly crypto is valuable to them.

And thus it is valuable to you 1st World citizens because you can invest in it. Or not. But how can you keep repeating "It has no value!! It doesn't solve anything!!" Just because it's not valuable or useful to YOU doesn't mean it's not useful for someone else.
As someone who holds global market weights in stocks and bonds, I find this argument the most compelling.

And thus, philosophically, I'm comfortable also holding crypto currencies at market weight. Which isn't a lot, at present.

But that's such a chore right now...

I have to manually calculate the market cap of the big cryptos, add them up, calculate that vs stocks / bonds.

They really need to make better index options.

The new S&P Megacap Crypto index seems pretty 'meh' given its only BTC and ETH.
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Prahasaurus
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

watchnerd wrote: Tue May 04, 2021 1:28 pm
EnjoyIt wrote: Tue May 04, 2021 11:57 am

Considering the massive wealth you recently built in this space, have you considered cashing some out and investing into traditional index funds or are you keeping it all in there?
He said he had 32 ETH.

32 * $3300 = $105K in ETH

ETH = 43% of crypto

Total crypto allocation = ~ $244K

That's more crypto than I have, for sure, but that's not a 'you made it for life cash out all your gains' amount of dough.
LOL, no. I said I had a small % of my total ETH locked in a validator. The rest of my ETH are in a hardware wallet. My total ETH is much higher than 32.
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Prahasaurus
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

JBTX wrote: Tue May 04, 2021 9:06 pm
qwerty123 wrote: Fri Apr 30, 2021 11:42 am
JBTX wrote: Tue Apr 27, 2021 11:05 pm
ohboy! wrote: Tue Apr 27, 2021 10:45 pm It's hard to understand anything outside of our experience. That's why if you experience crypto you have a better chance of understanding it.

Capital markets as we know them are changing. Markets were once primarily traded in force. There were no written contracts, or courts. Those are actually relatively new inventions that have perpetuated capitalism, and more broadly the evolution of humanity, to great heights. Where we are going is more efficient, requires less defense of force, and gives access to capitalization never seen before. There is endless capital that is not liquid in the world. All value yet to be unlocked. What crypto is creating is a world of tokenizing anything. Owning part of a business, part of land, part of any capital, and having it be tradeable at any time. The contract is an execution of code and requires no intermediaries. It might sound like a crazy fantasy world but we are already living in it for those willing to look beyond a headline. And as such, the early adopters are being rewarded.

Saying this, I am a longtime Bitcoin holder, but I hardly see any more value at this point in Bitcoin than I do Doge. So if you only look at Bitcoin you are missing the real story. It's a complex ecosystem and the barrier to entry to understand it is still a bit high though it's becoming easier and easier by the day. For those who have a comfy retirement there is little incentive to do so, for now, but I have seen that change gradually over the past couple of years as well. Even here.
This is one of the reasons I opened a coinbase account and threw in $500. Not that it will go anywhere, but by dabbling in it somewhat keeps me interested and in the loop. I highly doubt these particular currencies are good long term investments, because so many things are working against them. But I don't know. But whether btc or ETH go up or down, there is the possibility that DeFi evolves into something real.
I would personally recommend taking it a step further to get a real idea of the ecosystem. Buy some USDC and ETH, transfer it to a wallet, and deposit some funds into compound, curve, make trades on uniswap, transfer it to a layer 2 (polygon network is fun, and fees are incredibly low - this is a great example of what the future might look like).

Buy some Bitcoin and transfer it to a lightning wallet - buy a giftcard with it.

Just buying and holding on coinbase really feels like it's just scratching the surface and doesn't give a great idea of where things can / will be going.
My daughter is into art, and I told her she should look at NFTs. Upon investigating, to create an NFT, you have to buy etherium "gas" to create the blockchain, which is in the ballpark of $100 but can vary widely. I've tried to find price tables from GWEI to dollars, but I can't for the life of me figure out how to estimate the price of gas. This seems like a God awfully expensive way to conduct transactions, greatly diminishing the utility of the whole concept.
Gas on Ethereum is expensive because the network is in high demand, scaleability is an issue. There are many solutions afoot, it's being solved. We are already seeing side chains like Polygon (Matic) getting traction. Ethereum 2.0 will also help considerably.

And it's a good problem to have. You don't have this on other chains because all the action is on Ethereum. Or other chains are not really decentralized and hence have faster workarounds to help the scaleability issue (Binance). But long term, the most decentralized network (Ethereum) will win, in my opinion. Companies and governments will not risk moving their data across a chain that is dependent on a small number of nodes, or a centralized entity, etc. If a government can shut down your blockchain, you aren't decentralized....

In any case, it's good to see the conversation has evolved from "Crypto is a joke, it does nothing, there is no utility" to "My daughter needs ETH for gas to mint NFTs but it seems expensive..." And kudos to you for pointing your daughter in this direction. I think artists that embrace this technology first and can build a following will definitely have an edge. Also note NFTs are priced in ETH, not dollars. As this segment grows (and I believe it will explode as more artists, celebrities, sports teams, etc. catch on to the potential), pricing in ETH will help further solidify ETH as a hard asset.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

HomerJ wrote: Tue May 04, 2021 11:21 pm
claypigeon wrote: Tue May 04, 2021 11:13 pm
HomerJ wrote: Tue May 04, 2021 10:10 pm
claypigeon wrote: Tue May 04, 2021 8:24 pmRight now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.
Now imagine if there was a crash, you lost your job, and discovered your "emergency fund" was gone because people who were borrowing your emergency fund to speculate in crypto alt-coins had also gone broke and defaulted on your loans.
That isn’t how staking works, at least for ADA (cardano). One has access to their wallet at all times and all the money in it. The funds inside are used to validate blocks for others using their own currency for transactions. Nothing ever leaves your wallet or can leave your wallet. These systems (proof of stake) are why you don’t need the high electricity needs as wwith the old proof of work protocols with Bitcoin and the older generation. There is next to no electricity generation required making this more sustainable than even printing paper money. This is also why the third generation coin transaction fees are cheaper than running a CC and why ethereum is trying to move to a proof of stake protocol.

I agree Bitcoin and ethereum 1.0 are not sustainable long term. But crypto has produced solutions. This is where the money is
Doesn't staking lock up your money? How are you supposed to get your money out for an emergency if you stake it?

Actually, forget liquidity and loan defaults... Just the fact that whatever crypto-currency you have your emergency fund in can drop 80% in value during a bad crash makes it a silly place to keep an "emergency" fund.
Not sure why locking up your money in exchange for a return is a foreign concept. It's the pillar of traditional finance.

If you are worried about liquidity, good news. There are already secondary markets forming that allow you to sell your staked tokens immediately. There are solutions that allow you to stake ETH today and remove immediately, e.g. LIDO: https://lido.fi

It's crypto, if there is a problem, someone has probably already solved it and is making $$$ off it before most people even realize there is a problem. The pace of innovation is truly unbelievable.

As to price volatility, don't invest your emergency fund in BTC. Don't invest your emergency fund in Tesla, or even VTSAX. Leave it in dollars or a stablecoin. It's an emergency fund, after all!
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

decapod10 wrote: Tue May 04, 2021 10:17 pm
JBTX wrote: Tue May 04, 2021 9:06 pm
qwerty123 wrote: Fri Apr 30, 2021 11:42 am
JBTX wrote: Tue Apr 27, 2021 11:05 pm
ohboy! wrote: Tue Apr 27, 2021 10:45 pm It's hard to understand anything outside of our experience. That's why if you experience crypto you have a better chance of understanding it.

Capital markets as we know them are changing. Markets were once primarily traded in force. There were no written contracts, or courts. Those are actually relatively new inventions that have perpetuated capitalism, and more broadly the evolution of humanity, to great heights. Where we are going is more efficient, requires less defense of force, and gives access to capitalization never seen before. There is endless capital that is not liquid in the world. All value yet to be unlocked. What crypto is creating is a world of tokenizing anything. Owning part of a business, part of land, part of any capital, and having it be tradeable at any time. The contract is an execution of code and requires no intermediaries. It might sound like a crazy fantasy world but we are already living in it for those willing to look beyond a headline. And as such, the early adopters are being rewarded.

Saying this, I am a longtime Bitcoin holder, but I hardly see any more value at this point in Bitcoin than I do Doge. So if you only look at Bitcoin you are missing the real story. It's a complex ecosystem and the barrier to entry to understand it is still a bit high though it's becoming easier and easier by the day. For those who have a comfy retirement there is little incentive to do so, for now, but I have seen that change gradually over the past couple of years as well. Even here.
This is one of the reasons I opened a coinbase account and threw in $500. Not that it will go anywhere, but by dabbling in it somewhat keeps me interested and in the loop. I highly doubt these particular currencies are good long term investments, because so many things are working against them. But I don't know. But whether btc or ETH go up or down, there is the possibility that DeFi evolves into something real.
I would personally recommend taking it a step further to get a real idea of the ecosystem. Buy some USDC and ETH, transfer it to a wallet, and deposit some funds into compound, curve, make trades on uniswap, transfer it to a layer 2 (polygon network is fun, and fees are incredibly low - this is a great example of what the future might look like).

Buy some Bitcoin and transfer it to a lightning wallet - buy a giftcard with it.

Just buying and holding on coinbase really feels like it's just scratching the surface and doesn't give a great idea of where things can / will be going.
My daughter is into art, and I told her she should look at NFTs. Upon investigating, to create an NFT, you have to buy etherium "gas" to create the blockchain, which is in the ballpark of $100 but can vary widely. I've tried to find price tables from GWEI to dollars, but I can't for the life of me figure out how to estimate the price of gas. This seems like a God awfully expensive way to conduct transactions, greatly diminishing the utility of the whole concept.
OpenSea and Rarible allow for free minting with some restrictions I think, I've never done it but maybe worth a look.

On Ethereum, total transaction fee = gas price x gas used. The more complicated the transaction (the more computations that the miners computers have to do for you) , the higher "gas used" is. For transfers of ETH between wallets, it usually ends up being a few dollars. Minting a NFT is more intensive and will be higher.

There are gas trackers on the internet that tell you the current gas prices, it's better to try to mint when the gas prices are lower ,(when fewer people are using the network).

I think it is likely that a lot of low cost NFTs will move to layer 2 such as Polygon/Matic, which requires little to no gas for selling.
Exactly right. Aavegotchi is a good example of this: https://aavegotchi.com

The main Ethereum blockchain in the future will be primarily used as a final settlement layer, the vast majority of transactions will happen on a L2 Ethereum side chain. Polygon is one option, there are many others coming. I tell friends who want to use Aave to go to Polygon and deposit into Aave there. Transaction fees are pennies. If you have more than 20k USD or so, then by all means use Aave on Mainnet. Otherwise, use Polygon.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

txhill wrote: Tue May 04, 2021 12:16 pm I have to say that the rise of Dogecoin is pretty concerning. It might mean we are entering the mania phase, so perhaps the bottom falls out of the entire crypto market sooner than I thought and hoped, or it might mean bitcoin has less dominance on the store of value narrative than I'd thought. Or it's just doing its own thing completely untethered to anything else, like GameStop.
Typically Dogecoin rises before a massive increase in crypto valuations across most other "alt" coins (a term I despise, btw). My guess is we'll see some this money move into proper projects soon enough.

Having said that, the rise of DOGE is an interesting challenge to BTC, another meme coin (a serious meme coin, with the meme being "digital gold") There are more similarities between Bitcoin and Doge than BTC supporters want to admit. It has definitely caused me to reevaluate my long term thinking on Bitcoin.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Prahasaurus »

GR8FUL-D wrote: Tue May 04, 2021 8:47 pm
claypigeon wrote: Tue May 04, 2021 8:24 pm
HomerJ wrote: Tue May 04, 2021 5:37 pm I just don't understand why it's so hard for crytpo-enthusiasts to give me one big example of something awesome that crypto and only crypto can make possible.

Crypto people can't seem to come up with one big idea that makes me go "Ooh.. that WOULD be cool if that happened".

Instead, you tell me I can transfer money, or trade options or speculate in more crypto super easy.
Right now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.

Right now I can pay my bank tons of money for various fees (wiring, ATM, foreign currency exchange, etc.). What if I could transfer all my liquids holdings across borders and “wire” money, avoid currency fees, and never had need for an ATM? I can do that now with digital currency.

Now imagine how you’d do the physical transactions if you didn’t have a bank?

Crypto, like Marxism, will predominate in poor countries first. Unlike Marxism, this will save lives and increase productivity
Yea, discussing crypto solely from the perspective of a citizen of a 1st World country with a stable government, currency, and financial system is so unbelievably short-sighted. OK, maybe crypto is not particularly useful to you, you're happy with your bank, your investments, your credit cards, your access to loans, etc.. I get it.

But that is not reality for BILLIONS of other people around the world! What do you not understand about that?

Crypto is--or at the very least has the potential to be--massively valuable to them--literally life-changing. And a huge chunk of them own cell phones and have internet access (more and more every day). Now all of the sudden--through crypto--they have access to a stable currency (stable coins), a currency that isn't constantly being devalued (bitcoin), loans (dApps), a way to earn interest with their savings, etc.. So clearly crypto is valuable to them.

And thus it is valuable to you 1st World citizens because you can invest in it. Or not. But how can you keep repeating "It has no value!! It doesn't solve anything!!" Just because it's not valuable or useful to YOU doesn't mean it's not useful for someone else.
As a citizen of the first world, you only have to use crypto for a bit to realize how incredibly easy everything is. Once you use crypto, your regular bank seems like something from the 1970's. By the way, I mean properly use crypto, not just transfer money between wallets. Lend, borrow, invest, stake.... You start to ask yourself, why is my bank giving me .01% on my savings when Aave - based purely on supply and demand - pays me 8%? Ok, my regular bank is fully insured, but does that account for the 7.99% difference? Hmmmm......

But the real benefit of crypto is for the young, the bankless, people in developing countries, poor people who want to invest in the US stock market but cannot, people who live in countries with high inflation and would love to save in DAI or USDC. Perhaps eventually be paid in DAI, why not? They could then live cheaply in Argentina or Brazil or Belarus but earn a salary in DAI, firmly pegged to the USD. Payments would bypass their rapacious banking system and the eyes of corrupt bureaucrats.

Another benefit to 1st world companies will be costs. Coinbase has 1000+ employees. Uniswap has less than 20 people who work on the protocol (not apples to apples, as Uniswap is not a company). And yet Uniswap has never experienced downtime (unlike Coinbase), and Uniswap has similar trading volumes! But here is the kicker: Uniswap is a protocol. Coinbase can use Uniswap itself. It can simply wrap its trading platform around the Uniswap protocol and get rid of 400 developers. Leave a small team to manage integrations to Uniswap, keep their compliance teams, regulatory teams, marketing, etc. But the "guts" of their trading operation can be done through Uniswap, just passing on the fees to their customers.

Banks can start to use Aave or Compound. Why not, there is no formal "partnership" with Aave required, you only need to write the code and integrate. If Citibank doesn't do this, how long before some other new bank does? How much money does Citibank spend on IT each year? What if it moves to a fully decentralized back end platform powered by Ethereum? They could get rid of thousands and thousands of employees... You see where this is going, right?

I'm sure it made sense in the 1800's (and still in some developed countries today) for each company to generate its own electricity. But eventually, we all cottoned on to the concept of separate power stations providing a "pay as you go" model for electricity. Let the company focus on building cars or processing wood products or whatever.... Just pay for the electricity based on consumption.

So why not use decentralized platforms in a similar way? Instead of hiring 10,000 people globally for your massive IT systems, use Ethereum apps that provide the same functionality with zero downtime. Because if you don't, some upstart will. And they will kill you on price. Everything will be pay as you go, paying for transactions, just a small amount of ETH which the company passes on the its users. And that ETH is paid to validators to run nodes on the decentralized platform to enable all those transactions. A fully global, borderless, decentralized platform.... A year ago you could run a node within that system (32 ETH) for 6k USD. Now it's over 100k USD. In 3-5 years?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Paradise »

I’ll drop the inconvenient truth here.

Since crypto is a pyramid scheme with no actual value, investors have to convince other people to join in for the price to continue to rise.

This has managed to infiltrate this forum, somehow.

IMO, it shouldn’t.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by dziuniek »

sureshoe wrote: Tue Apr 27, 2021 11:06 am
KlangFool wrote: Tue Apr 27, 2021 10:53 am
sureshoe wrote: Tue Apr 27, 2021 10:42 am
So I understand your point, but in investing, the outcome is what validates the decision. The quality of investors is the sum of their outcomes over time. It's the only way to effectively quantify the value of their decisions.
sureshoe,

My uncle won the lottery 3 times. And, he is one of those folks that are lucky enough to win consistently in the casino. He is born lucky. He does not go around and advice folks to buy lottery tickets and gamble in a casino.

I know that I am not my uncle.

<<So I understand your point, but in investing, the outcome is what validates the decision.>>

Are you claiming that buying lottery ticket is investing? Or, buying lottery is investing for my uncle since he is lucky enough to win? If not, how could you say that outcome is what validates the decision?

Some people are born lucky. Some people are lucky some times. They become rich just because they are in the right place and in the right time. Luck was on their side.
If you look upthread, I specifically said I don't like comparing POKER to INVESTING.

There is no such thing as luck or lucky people.

Buying a lottery ticket is not investing. Playing the lottery is a BAD DECISION. I can MATHMEMATICALLY prove it is the INCORRECT decision because there is a discrete probability that can be applied. You pay $5 with a 0.0000045 chance of winning $1,000,000. Your expected loss is $0.5 per play. There is no "luck". Fate does not favor your uncle. He has no system.

Investing cannot be proven in a discrete manner. You cannot definitively prove to me Bitcoin, GameStop, VT, etc. are "Correct" or "Incorrect". Our argument is "I researched Investment X more than you, and I believe it has a higher probability of being successful." The outcome is the only proof I have. Because the market is random, we take samples over time to determine the quality of my decisions (because even a monkey will beat you now and then).
Oh, there's definitely lucky people. Saw a post on twitter from a random guy yesterday:

"As someone who made money off Gamestop, Dogecoin and a lottery ticket this year, the best financial advice I can give you is to just be a fsckng* idiot".

Haha.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by sureshoe »

dziuniek wrote: Wed May 05, 2021 6:38 am Oh, there's definitely lucky people. Saw a post on twitter from a random guy yesterday:

"As someone who made money off Gamestop, Dogecoin and a lottery ticket this year, the best financial advice I can give you is to just be a fsckng* idiot".

Haha.
Lol, you can't win if you don't play!
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Well, if the stupid money is going into Dogecoin, I guess that will keep stock valuations from getting too much crazier, too soon.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by bogledogle »

GR8FUL-D wrote: Tue May 04, 2021 8:18 pm
I completely agree that it's reasonable to try and understand why. But one theme that I hear repeated over and over again is "bitcoin (or other crypto) is not useful, and therefore there is no value in it". For the sake of discussion, let's say that's true for you as an wealthy American, living in a 1t World democracy, with access to a stable banking system, stable currency, etc., etc..

But if we find out that for billions of other people on the planet, who live in 2nd & 3rd World countries, who don't have access to banks, credit cards, loans, etc., who's native currency is consistently being devalued, who can't put their savings in dollars or euros or whatever, if we learn that crypto is helpful and useful for them, then doesn't it follow that it is valuable? And if that's the case, then perhaps all of this isn't some huge ponzi / pyramid / tulip craze, but actually a new, useful, and valuable technology.

IMO it's shortsighted to view and form opinions on crypto solely from a 1st World perspective.
claypigeon wrote: Tue May 04, 2021 8:24 pm Right now I have $204 in my Gucci wallet slowly losing purchasing power that I can lose or that someone can easily steal. Right now I have about $1000 worth of ADA (cardano) in a digital wallet earning 5-6% APY. This wallet cannot be easily lost nor stolen and to hack would require a multi word passcode I can’t physically remember so have saved in a 2FA password protector which has a long password that can’t feasibly be hacked but that my brain can remember. If I wanted to go all in I’d get a yubikey or something for even more security. Imagine if your physical wallet paid you to carry around cash?

Right now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.

Right now I can pay my bank tons of money for various fees (wiring, ATM, foreign currency exchange, etc.). What if I could transfer all my liquids holdings across borders and “wire” money, avoid currency fees, and never had need for an ATM? I can do that now with digital currency.

Now imagine how you’d do the physical transactions if you didn’t have a bank?

Crypto, like Marxism, will predominate in poor countries first. Unlike Marxism, this will save lives and increase productivity

Ok. I have been reading through this thread and enjoying the "r/publicfreakout esque nature of this thread. But, as a person from these 2nd and 3rd world countries you refer to where we can't put our savings in USD or Euros or whatever or being unbanked, your argument kinda sounds like new age slavery or at best trickle down economics to me.

So, as a person from this 2/3rd world country my great savior "currency or store of value" invented in the modern era to transcend global currency fragmentation and inflation and the evil fiat currency attributes is a protocol that is created by random people (sometime even anonymous), that requires me to know how to use computers and supercomputers, have access to them early on in their lifecycle, burn through enormous amounts of energy to "create" this currency or buy it from a really expensive source at sky-high "investment" prices after being speculated upon by all of the 1st world or after all the coins have been collected?

Also, I need to know how to store my coins in local wallet and upgrade to the latest tech so I don't get ripped off. Oh, did I mention the transaction costs that need to go up to maintain my network? or exchanges that seem to vanish into thin air? - of course that is not anything like banking fees that these banks rip off of you now, don't be silly! You don't need insurance because the ledger is transparent and trust is built into the system. And while I do this all I should probably break some of my country laws or get around them that require me to own/transact in our national currency.

The point I am trying to make here is that Crypto cannot be the savior of 3rd world countries. Wouldn't it be unfair that such currency would begin it's life with such an extreme bias towards the 1st world and "people who got computers" and speculators who have money to throw around acquiring such a volatile asset?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by JBTX »

Prahasaurus wrote: Wed May 05, 2021 12:46 am
JBTX wrote: Tue May 04, 2021 9:06 pm
qwerty123 wrote: Fri Apr 30, 2021 11:42 am
JBTX wrote: Tue Apr 27, 2021 11:05 pm
ohboy! wrote: Tue Apr 27, 2021 10:45 pm It's hard to understand anything outside of our experience. That's why if you experience crypto you have a better chance of understanding it.

Capital markets as we know them are changing. Markets were once primarily traded in force. There were no written contracts, or courts. Those are actually relatively new inventions that have perpetuated capitalism, and more broadly the evolution of humanity, to great heights. Where we are going is more efficient, requires less defense of force, and gives access to capitalization never seen before. There is endless capital that is not liquid in the world. All value yet to be unlocked. What crypto is creating is a world of tokenizing anything. Owning part of a business, part of land, part of any capital, and having it be tradeable at any time. The contract is an execution of code and requires no intermediaries. It might sound like a crazy fantasy world but we are already living in it for those willing to look beyond a headline. And as such, the early adopters are being rewarded.

Saying this, I am a longtime Bitcoin holder, but I hardly see any more value at this point in Bitcoin than I do Doge. So if you only look at Bitcoin you are missing the real story. It's a complex ecosystem and the barrier to entry to understand it is still a bit high though it's becoming easier and easier by the day. For those who have a comfy retirement there is little incentive to do so, for now, but I have seen that change gradually over the past couple of years as well. Even here.
This is one of the reasons I opened a coinbase account and threw in $500. Not that it will go anywhere, but by dabbling in it somewhat keeps me interested and in the loop. I highly doubt these particular currencies are good long term investments, because so many things are working against them. But I don't know. But whether btc or ETH go up or down, there is the possibility that DeFi evolves into something real.
I would personally recommend taking it a step further to get a real idea of the ecosystem. Buy some USDC and ETH, transfer it to a wallet, and deposit some funds into compound, curve, make trades on uniswap, transfer it to a layer 2 (polygon network is fun, and fees are incredibly low - this is a great example of what the future might look like).

Buy some Bitcoin and transfer it to a lightning wallet - buy a giftcard with it.

Just buying and holding on coinbase really feels like it's just scratching the surface and doesn't give a great idea of where things can / will be going.
My daughter is into art, and I told her she should look at NFTs. Upon investigating, to create an NFT, you have to buy etherium "gas" to create the blockchain, which is in the ballpark of $100 but can vary widely. I've tried to find price tables from GWEI to dollars, but I can't for the life of me figure out how to estimate the price of gas. This seems like a God awfully expensive way to conduct transactions, greatly diminishing the utility of the whole concept.
Gas on Ethereum is expensive because the network is in high demand, scaleability is an issue. There are many solutions afoot, it's being solved. We are already seeing side chains like Polygon (Matic) getting traction. Ethereum 2.0 will also help considerably.

And it's a good problem to have. You don't have this on other chains because all the action is on Ethereum. Or other chains are not really decentralized and hence have faster workarounds to help the scaleability issue (Binance). But long term, the most decentralized network (Ethereum) will win, in my opinion. Companies and governments will not risk moving their data across a chain that is dependent on a small number of nodes, or a centralized entity, etc. If a government can shut down your blockchain, you aren't decentralized....

In any case, it's good to see the conversation has evolved from "Crypto is a joke, it does nothing, there is no utility" to "My daughter needs ETH for gas to mint NFTs but it seems expensive..." And kudos to you for pointing your daughter in this direction. I think artists that embrace this technology first and can build a following will definitely have an edge. Also note NFTs are priced in ETH, not dollars. As this segment grows (and I believe it will explode as more artists, celebrities, sports teams, etc. catch on to the potential), pricing in ETH will help further solidify ETH as a hard asset.

I am skeptical about certain aspects, but I don't want to be on the wrong side of history. My gut is throwing money at cryptocurrencies as an "Investment" probably won't end well. It's not clear to the degree DeFi evolves any of these coins will be the ultimate answer. The fact that Doge is appreciating the fastest tells me right now it is almost all bubblish FOMO speculation.

As to the future of DeFi- I am not well versed enough to have a good opinion. I'd say I'm neutral. I can certain see some potential applications, but at the same time if it ever goes anywhere there is going to be push to reign it in due to safety and regulatory reasons. How that plays out is anybodys guess.

As to NFTS my first reactions was WT#? but as I thought through it they appear to me to be a clever way to bring scarcity to digital art, property and similar mediums. I think many underestimate the desire to have something unique. To those who care about having the official sanctioned pdf with blockchain verification will mean something. whether Beeples collage will command $ 70M 10 years from now I have no clue.

I was disappointed that the gas fees are prohibitively high right now for my daughter to use it

One reason I've been less dismissive of the concept is because we are likely approaching an age where we enter virtual reality, and digital assets will have value. We already have seen signs of it. Online digital alternate communities have existed for at least 15 years. I know of people who become completely engrossed in it, and will spend real money on avatars and other digital paraphernalia. It is much more common in places like S Korea and Japan. I can imagine when virtual reality takes off it will go to another level.

Having said all that, none of the above gives me any reason to think paying $55,000 for one Bitcoin is a wise use of one's money.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Keenobserver »

Coworker is up $800k so far this year in crypto... sound like ok investment?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Keenobserver wrote: Wed May 05, 2021 1:07 pm Coworker is up $800k so far this year in crypto... sound like ok investment?
How much longer do you think those returns will happen in the future?
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claypigeon
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by claypigeon »

bogledogle wrote: Wed May 05, 2021 10:32 am
GR8FUL-D wrote: Tue May 04, 2021 8:18 pm
I completely agree that it's reasonable to try and understand why. But one theme that I hear repeated over and over again is "bitcoin (or other crypto) is not useful, and therefore there is no value in it". For the sake of discussion, let's say that's true for you as an wealthy American, living in a 1t World democracy, with access to a stable banking system, stable currency, etc., etc..

But if we find out that for billions of other people on the planet, who live in 2nd & 3rd World countries, who don't have access to banks, credit cards, loans, etc., who's native currency is consistently being devalued, who can't put their savings in dollars or euros or whatever, if we learn that crypto is helpful and useful for them, then doesn't it follow that it is valuable? And if that's the case, then perhaps all of this isn't some huge ponzi / pyramid / tulip craze, but actually a new, useful, and valuable technology.

IMO it's shortsighted to view and form opinions on crypto solely from a 1st World perspective.
claypigeon wrote: Tue May 04, 2021 8:24 pm Right now I have $204 in my Gucci wallet slowly losing purchasing power that I can lose or that someone can easily steal. Right now I have about $1000 worth of ADA (cardano) in a digital wallet earning 5-6% APY. This wallet cannot be easily lost nor stolen and to hack would require a multi word passcode I can’t physically remember so have saved in a 2FA password protector which has a long password that can’t feasibly be hacked but that my brain can remember. If I wanted to go all in I’d get a yubikey or something for even more security. Imagine if your physical wallet paid you to carry around cash?

Right now my 6 month emergency fund is gaining 0.1% interest or whatever it is. Imagine if your emergency fund paid you actual money to keep it there.

Right now I can pay my bank tons of money for various fees (wiring, ATM, foreign currency exchange, etc.). What if I could transfer all my liquids holdings across borders and “wire” money, avoid currency fees, and never had need for an ATM? I can do that now with digital currency.

Now imagine how you’d do the physical transactions if you didn’t have a bank?

Crypto, like Marxism, will predominate in poor countries first. Unlike Marxism, this will save lives and increase productivity

Ok. I have been reading through this thread and enjoying the "r/publicfreakout esque nature of this thread. But, as a person from these 2nd and 3rd world countries you refer to where we can't put our savings in USD or Euros or whatever or being unbanked, your argument kinda sounds like new age slavery or at best trickle down economics to me.

So, as a person from this 2/3rd world country my great savior "currency or store of value" invented in the modern era to transcend global currency fragmentation and inflation and the evil fiat currency attributes is a protocol that is created by random people (sometime even anonymous), that requires me to know how to use computers and supercomputers, have access to them early on in their lifecycle, burn through enormous amounts of energy to "create" this currency or buy it from a really expensive source at sky-high "investment" prices after being speculated upon by all of the 1st world or after all the coins have been collected?

Also, I need to know how to store my coins in local wallet and upgrade to the latest tech so I don't get ripped off. Oh, did I mention the transaction costs that need to go up to maintain my network? or exchanges that seem to vanish into thin air? - of course that is not anything like banking fees that these banks rip off of you now, don't be silly! You don't need insurance because the ledger is transparent and trust is built into the system. And while I do this all I should probably break some of my country laws or get around them that require me to own/transact in our national currency.

The point I am trying to make here is that Crypto cannot be the savior of 3rd world countries. Wouldn't it be unfair that such currency would begin it's life with such an extreme bias towards the 1st world and "people who got computers" and speculators who have money to throw around acquiring such a volatile asset?
If you don’t want to learn and only spout incorrect talking points, feel free to continue doing so.

Some coins require tons of energy. Some are more efficient than paper money or visa transactions.

Some coins are made by randos. Some are made by academics who open source their code and have their tech published in journals to undergo peer review.

Some coins serve as store of values. Some don’t and are inherently inflationary and deflationary.

Some coins have high transaction costs and maintenance fees. Some cut out the middle man and pay you for the privilege of using your coins to validate others transactions and have transaction costs approaching hundredths of a cent.

Some exchanges may go bust. But that’s why you shouldn’t store money on an exchange and instead always transfer it to your digital wallet which can’t go belly up as it’s protected by a passcode unhackable to even quantum computing.

Some coins may benefit from having insurance. Others the money never leaves your wallet even when being used to validate others transactions and getting paid for the privilege to do so.

I won’t comment on the legality of transacting in a foreign currency if laws forbid it but will say this is commonly done with USD in these countries.

You don’t need the latest tech or high buy in. A basic smart phone from 10+ years ago can run these wallets and exchanges or any common device with internet access can do so.

It’s super easy to learn how to do this and I bet any 5 year old can do this and take the 30 seconds to figure out a basic wallet. It may be more complicated to convert fiat currency on an exchange to digital currency but then why not pay this 5 year old in digital currency in the first place?

Some coins are volatile and expensive. Others are pegged to the USD.

Please refrain from painting all crypto as the same. It’s not. Just as different physical currencies are different from each other.

I see a third world free from centralized banks and using crypto as a feeless, flawless, decentralized financial institution that cuts off the middleman and pays you for use of your coins without restricting access to your coins as a savior. You may not. And that’s okay.
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HomerJ
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

claypigeon wrote: Wed May 05, 2021 2:04 pm I see a third world free from centralized banks and using crypto as a feeless, flawless, decentralized financial institution that cuts off the middleman and pays you for use of your coins without restricting access to your coins as a savior. You may not. And that’s okay.
Nothing created by humans is flawless. And it won't be feeless (free) either.

It definitely won't be a savior of humanity. But you can think otherwise. And that's okay.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
bogledogle
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by bogledogle »

JBTX wrote: Wed May 05, 2021 11:23 am I am skeptical about certain aspects, but I don't want to be on the wrong side of history. My gut is throwing money at cryptocurrencies as an "Investment" probably won't end well. It's not clear to the degree DeFi evolves any of these coins will be the ultimate answer. The fact that Doge is appreciating the fastest tells me right now it is almost all bubblish FOMO speculation.

As to the future of DeFi- I am not well versed enough to have a good opinion. I'd say I'm neutral. I can certain see some potential applications, but at the same time if it ever goes anywhere there is going to be push to reign it in due to safety and regulatory reasons. How that plays out is anybodys guess.

As to NFTS my first reactions was WT#? but as I thought through it they appear to me to be a clever way to bring scarcity to digital art, property and similar mediums. I think many underestimate the desire to have something unique. To those who care about having the official sanctioned pdf with blockchain verification will mean something. whether Beeples collage will command $ 70M 10 years from now I have no clue.

I was disappointed that the gas fees are prohibitively high right now for my daughter to use it

One reason I've been less dismissive of the concept is because we are likely approaching an age where we enter virtual reality, and digital assets will have value. We already have seen signs of it. Online digital alternate communities have existed for at least 15 years. I know of people who become completely engrossed in it, and will spend real money on avatars and other digital paraphernalia. It is much more common in places like S Korea and Japan. I can imagine when virtual reality takes off it will go to another level.

Having said all that, none of the above gives me any reason to think paying $55,000 for one Bitcoin is a wise use of one's money.
Well said.

The bubblish FOMO speculation is driving most of the money right now. Most of the people trading Crypto based stuff are in in for the short term to make a quick buck. Long term true believers are too religious and have very specific political or moral views. Decentralized control, secured public ledgers ..etc is awesome technology and I am sure it will find a way to exist and thrive, but will it back currencies like Bitcoin, DogeCoin, Etherium or will it be used to mint new digital currency by governments who will exercise control over them? Maybe it will be used by banks to provide transparency and more government control and all currencies will be banned?

I can actually see use for NFTs in the video game world. As someone who pays money for virtual stuff in video games, I can see myself buying a limited edition skin or character in a video game, or even a video game license itself by cutting out the middle man. If video game companies can make 10% when users sell their characters or skins or whatever, I have no doubt they will jump in on this goldmine. Although, will the developer create their own protocol/network to ensure they profit from it or will they base it on a currency that is volatile? https://www.playerauctions.com/ already exists, Xbox used to sell their own "gold" but now moved to USD based transactions - I wonder why? Will I be able to sell or share my digital asset at a lower price once I am done with it - is that really better for companies/artists who would rather have a new user pay in full for a game? Will all video games now create a "scarcity" model like brands like supreme?

I don't own any serious art that appreciates, I don't consider myself to be rich enough to speculate on art, but many rich people do and I will leave it up to them to speculate on Beeple's digital art. But, if an artist wants to sell their art and has to pay "fees" or "gas" for a transaction, how is that different from commissions paid to dealers? Aren't you just moving to a different trading model and paying commissions to someone else?

Perhaps there is a longterm investment in this space, but it is most likely that it does not exist yet. Perhaps investing in banks/exchanges or tech companies that enable transactions assuming they will be ahead in line when regulators catch up?

It seems like newer crypto protocols claim that they are better than existing ones because they have more "abilities" I would like folks who are buying bitcoin at current prices to help me understand why some other currency can't just copy what Bitcoin does and do it better?

There are also these shady entities pushing and inflating these like the classic ponzi schemes.

Here's an instance from this popular youtuber on TRX: https://youtu.be/qVMdq9pDiuQ?t=321

Here's John Oliver's take on Bitconnect:

https://youtu.be/g6iDZspbRMg?t=958


https://youtu.be/g6iDZspbRMg?t=958
SlowMovingInvestor
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

HomerJ wrote: Wed May 05, 2021 2:10 pm
claypigeon wrote: Wed May 05, 2021 2:04 pm I see a third world free from centralized banks and using crypto as a feeless, flawless, decentralized financial institution that cuts off the middleman and pays you for use of your coins without restricting access to your coins as a savior. You may not. And that’s okay.
Nothing created by humans is flawless. And it won't be feeless (free) either.

It definitely won't be a savior of humanity. But you can think otherwise. And that's okay.
Agree completely. Anyone with any experience working in 3rd world countries (especially in poorer rural areas) will point out that the problem is lack of income. And if anything, central banks in such countries urge banks to open branches in rural areas. The problem really isn't rent seeking middlemen for financial transactions for the most part, it's lack of money. Various forms of mobile money which don't even require smart phones or Internet access, but just SMS have been around since 2007 (M-PESA). Peer to peer lending such as Kiva (and even older organizations such as Grameen) have been around for decades. They help, but don't magically fix things. Indeed, for pure money transfer, I don't see that crypto has any advantage over mobile money.

The idea that people with very little disposable income should put it in a volatile, risky asset (even stablecoins that aren't backed by actual reserves are risky), and moreover stake or lend out their life savings for risky trading -- well, it reminds one of Marie Antionette ("let them eat crypto", literally). And stablecoins backed by actual reserves -- well, they are dependent on those hated central banks again.

I'd also be interested in knowing any crypto coin with a non-trivial network that is more energy efficient than a visa debit transaction (credit transactions are not really comparable because they're multi-step, but they're still very fast, high throughput for approval). Distributed consensus in a non-trivial network is inherently going to use up more energy than a Visa transaction. And we know that the 2 largest coin networks are slow, low throughput, and for Ethererum, very high cost. If these issues were so easy to solve, why haven't any of the altcoins built large networks without these problems ?

FWIW, I like Algorand, it's very nicely designed, has a functional programming language. But I certainly would never suggest it's going to be the savior of the 3rd world (or of the un/under banked in the US for that matter).
Last edited by SlowMovingInvestor on Wed May 05, 2021 2:58 pm, edited 1 time in total.
txhill
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

bogledogle wrote: Wed May 05, 2021 2:42 pm
JBTX wrote: Wed May 05, 2021 11:23 am I am skeptical about certain aspects, but I don't want to be on the wrong side of history. My gut is throwing money at cryptocurrencies as an "Investment" probably won't end well. It's not clear to the degree DeFi evolves any of these coins will be the ultimate answer. The fact that Doge is appreciating the fastest tells me right now it is almost all bubblish FOMO speculation.

As to the future of DeFi- I am not well versed enough to have a good opinion. I'd say I'm neutral. I can certain see some potential applications, but at the same time if it ever goes anywhere there is going to be push to reign it in due to safety and regulatory reasons. How that plays out is anybodys guess.

As to NFTS my first reactions was WT#? but as I thought through it they appear to me to be a clever way to bring scarcity to digital art, property and similar mediums. I think many underestimate the desire to have something unique. To those who care about having the official sanctioned pdf with blockchain verification will mean something. whether Beeples collage will command $ 70M 10 years from now I have no clue.

I was disappointed that the gas fees are prohibitively high right now for my daughter to use it

One reason I've been less dismissive of the concept is because we are likely approaching an age where we enter virtual reality, and digital assets will have value. We already have seen signs of it. Online digital alternate communities have existed for at least 15 years. I know of people who become completely engrossed in it, and will spend real money on avatars and other digital paraphernalia. It is much more common in places like S Korea and Japan. I can imagine when virtual reality takes off it will go to another level.

Having said all that, none of the above gives me any reason to think paying $55,000 for one Bitcoin is a wise use of one's money.
Well said.

The bubblish FOMO speculation is driving most of the money right now. Most of the people trading Crypto based stuff are in in for the short term to make a quick buck. Long term true believers are too religious and have very specific political or moral views. Decentralized control, secured public ledgers ..etc is awesome technology and I am sure it will find a way to exist and thrive, but will it back currencies like Bitcoin, DogeCoin, Etherium or will it be used to mint new digital currency by governments who will exercise control over them? Maybe it will be used by banks to provide transparency and more government control and all currencies will be banned?

I can actually see use for NFTs in the video game world. As someone who pays money for virtual stuff in video games, I can see myself buying a limited edition skin or character in a video game, or even a video game license itself by cutting out the middle man. If video game companies can make 10% when users sell their characters or skins or whatever, I have no doubt they will jump in on this goldmine. Although, will the developer create their own protocol/network to ensure they profit from it or will they base it on a currency that is volatile? https://www.playerauctions.com/ already exists, Xbox used to sell their own "gold" but now moved to USD based transactions - I wonder why? Will I be able to sell or share my digital asset at a lower price once I am done with it - is that really better for companies/artists who would rather have a new user pay in full for a game? Will all video games now create a "scarcity" model like brands like supreme?

I don't own any serious art that appreciates, I don't consider myself to be rich enough to speculate on art, but many rich people do and I will leave it up to them to speculate on Beeple's digital art. But, if an artist wants to sell their art and has to pay "fees" or "gas" for a transaction, how is that different from commissions paid to dealers? Aren't you just moving to a different trading model and paying commissions to someone else?

Perhaps there is a longterm investment in this space, but it is most likely that it does not exist yet. Perhaps investing in banks/exchanges or tech companies that enable transactions assuming they will be ahead in line when regulators catch up?

It seems like newer crypto protocols claim that they are better than existing ones because they have more "abilities" I would like folks who are buying bitcoin at current prices to help me understand why some other currency can't just copy what Bitcoin does and do it better?

There are also these shady entities pushing and inflating these like the classic ponzi schemes.

Here's an instance from this popular youtuber on TRX: https://youtu.be/qVMdq9pDiuQ?t=321

Here's John Oliver's take on Bitconnect:

https://youtu.be/g6iDZspbRMg?t=958


https://youtu.be/g6iDZspbRMg?t=958
I definitely agree, and also want to add: sometimes people WANT to tip their favorite artist / video game designer / whatever. Right now the way you do it is you buy a $20 hoodie at the concert, and some middlemen take 80% of it. With NFTs you'll actually be able to buy something unique from the artist and even if you buy it on the secondary market, you know that the artist benefits from your purchase directly (or at least gets a significant cut on the secondary market). The future is very bright for content creators! They can even benefit from their earlier works before they became big. Copyright law has had a difficult time adjusting to the digital era, so NFTs help a lot with that.
SlowMovingInvestor
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

txhill wrote: Wed May 05, 2021 2:53 pm

I definitely agree, and also want to add: sometimes people WANT to tip their favorite artist / video game designer / whatever. Right now the way you do it is you buy a $20 hoodie at the concert, and some middlemen take 80% of it. With NFTs you'll actually be able to buy something unique from the artist and even if you buy it on the secondary market, you know that the artist benefits from your purchase directly (or at least gets a significant cut on the secondary market). The future is very bright for content creators! They can even benefit from their earlier works before they became big. Copyright law has had a difficult time adjusting to the digital era, so NFTs help a lot with that.
How exactly ?

An infringer can copy a virtual painting or an NYT column or a music video irrespective of whether an NFT 'points' to it or not. Even more so for physical objects such as the hoodies you mention.

I do see the use of NFTs for speculation, since ultimately collectibles are speculative.
txhill
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

SlowMovingInvestor wrote: Wed May 05, 2021 3:12 pm
txhill wrote: Wed May 05, 2021 2:53 pm

I definitely agree, and also want to add: sometimes people WANT to tip their favorite artist / video game designer / whatever. Right now the way you do it is you buy a $20 hoodie at the concert, and some middlemen take 80% of it. With NFTs you'll actually be able to buy something unique from the artist and even if you buy it on the secondary market, you know that the artist benefits from your purchase directly (or at least gets a significant cut on the secondary market). The future is very bright for content creators! They can even benefit from their earlier works before they became big. Copyright law has had a difficult time adjusting to the digital era, so NFTs help a lot with that.
How exactly ?

An infringer can copy a virtual painting or an NYT column or a music video irrespective of whether an NFT 'points' to it or not. Even more so for physical objects such as the hoodies you mention.

I do see the use of NFTs for speculation, since ultimately collectibles are speculative.
Two observations:

1. That's already true today. NFTs just help address this issue for content creators even if it won't completely eliminate the problem. NFTs certainly don't make the problem worse, so what's the complaint?

2. That's not really the right way to think about the value of scarce things. When something is copied frequently, that increases the value of the original version of that thing, even if it is essentially identical. The more people that hang pictures of the Mona Lisa on the wall, the more valuable the original Mona Lisa becomes. The more people that read paperback versions of Harry Potter, the more valuable the original signed first edition becomes. The experience is the same: it's the scarcity that counts. Not everyone thinks this way, but enough do that there is a market for such things.

Maybe the way things work out is that content creators will be better supported by a few patrons willing to pay a premium for NFTs, and most other supporters will enjoy the content for free. I don't know, but it probably will be an improvement over the current system.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Keenobserver »

watchnerd wrote: Wed May 05, 2021 1:31 pm
Keenobserver wrote: Wed May 05, 2021 1:07 pm Coworker is up $800k so far this year in crypto... sound like ok investment?
How much longer do you think those returns will happen in the future?
Can you give me such a timeline for any investment with certainty?
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watchnerd
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Keenobserver wrote: Wed May 05, 2021 3:18 pm
Can you give me such a timeline for any investment with certainty?
For bonds, yes, if held to maturity, I know exactly what my nominal return will be.

For stocks, it's fuzzier, but we have earnings, earnings growth, and dividends to look at. So you can SWAG it.

Modeling expected future returns on given assets is pretty standard.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
SlowMovingInvestor
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

txhill wrote: Wed May 05, 2021 3:16 pm
SlowMovingInvestor wrote: Wed May 05, 2021 3:12 pm
txhill wrote: Wed May 05, 2021 2:53 pm

I definitely agree, and also want to add: sometimes people WANT to tip their favorite artist / video game designer / whatever. Right now the way you do it is you buy a $20 hoodie at the concert, and some middlemen take 80% of it. With NFTs you'll actually be able to buy something unique from the artist and even if you buy it on the secondary market, you know that the artist benefits from your purchase directly (or at least gets a significant cut on the secondary market). The future is very bright for content creators! They can even benefit from their earlier works before they became big. Copyright law has had a difficult time adjusting to the digital era, so NFTs help a lot with that.
How exactly ?

An infringer can copy a virtual painting or an NYT column or a music video irrespective of whether an NFT 'points' to it or not. Even more so for physical objects such as the hoodies you mention.

I do see the use of NFTs for speculation, since ultimately collectibles are speculative.
Two observations:

1. That's already true today. NFTs just help address this issue for content creators even if it won't completely eliminate the problem. NFTs certainly don't make the problem worse, so what's the complaint?

2. That's not really the right way to think about the value of scarce things. When something is copied frequently, that increases the value of the original version of that thing, even if it is essentially identical. The more people that hang pictures of the Mona Lisa on the wall, the more valuable the original Mona Lisa becomes. The more people that read paperback versions of the Harry Potter, the more valuable the original signed first edition becomes. The experience is the same: it's the scarcity that counts. Not everyone thinks this way, but enough do that there is a market for such things.

Maybe the way things work out is that content creators will be better supported by a few patrons willing to pay a premium for NFTs, and most other supporters will enjoy the content for free. I don't know, but it probably will be an improvement over the current system.
I never said NFTs make the situation with copyright worse. But you claimed they 'help a lot' with copyright ? An NFT doesn't stop an infringer (especially if it's not accompanied by copyright registration).

As for your point 2, I never said that NFTs could not be valuable. Ultimately they're collectibles, and are worth whatever someone will pay for them. But someone pirating a music video or an NYT column or the latest Disney MU movie isn't going to be deterred at all by an NFT.

Perhaps during the current speculative boom, we may see prices for the occasional NFT that are so high that an NYT column NFT sells for $560K and would give it's creator (let's assume for the moment that the author gets the $$) enough $$ that he doesn't mind if people steal copies of it. But clearly that's not going to work for the thousands of newspaper columns put out every day, if they were all NFTized, once the boom and novelty dies down. And as for your Harry Potter analogy, people pay for the copies, and it's illegal to pirate them. If JK Rowling had sold digital signatures of her books (NFTs didn't exist at that time, but digital sigs did), it wouldn't have deterred would-be pirates.
Last edited by SlowMovingInvestor on Wed May 05, 2021 3:42 pm, edited 3 times in total.
av111
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by av111 »

Keenobserver wrote: Wed May 05, 2021 3:18 pm
watchnerd wrote: Wed May 05, 2021 1:31 pm
Keenobserver wrote: Wed May 05, 2021 1:07 pm Coworker is up $800k so far this year in crypto... sound like ok investment?
How much longer do you think those returns will happen in the future?
Can you give me such a timeline for any investment with certainty?
It is not possible to give a timeline for speculative items. Look at DOGE. No revenue, no profit, no use. Perfect beanie baby and still goes up or down for no reason.

It is more possible to predict how a real investment will behave when it engages with the environment to hire people, make something, sell it and generate profits
AV111
txhill
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

SlowMovingInvestor wrote: Wed May 05, 2021 3:29 pm I never said NFTs make the situation with copyright worse. But you claimed they 'help a lot' with copyright ? An NFT doesn't stop an infringer (especially if it's not accompanied by copyright registration).
Maybe we can use an example: beeple. A popular artist who has worked with digital media for years. He just sold 5000 of his daily works--which really are just .jpg files--for a substantial sum. He never could have sold a .jpg file for that kind of sum before NFTs existed. The Copyright Act of 1976 just isn't up to the task of protecting the rights of digital artists such that they can monetize their digital media. Now they have a new option. Yes, anyone can still copy the beeple jpegs. But he can also be rewarded and incentivized for making digital art.
As for your point 2, I never said that NFTs could not be valuable. Ultimately they're collectibles, and are worth whatever someone will pay for them. But someone pirating a music video or an NYT column or the latest Disney MU movie isn't going to be deterred at all by an NFT.

Perhaps during the current speculative boom, we may see prices for the occasional NFT that are so high that an NYT column NFT sells for $560K and would give it's creator (let's assume for the moment that the author gets the $$) and doesn't mind if people steal copies of it. But clearly that's not going to work for the thousands of newspaper columns put out every day, if they were all NFTized, once the boom and novelty dies down. And as for your Harry Potter analogy, people pay for the copies, and it's illegal to pirate them.
What is being sold as NFTs right now--yes most of it is probably overpriced or trash. A lot of the highest profile sales are really more like an advertisement to the whole world that NFTs exist. But what you're going to see in the future is more people minting NFTs of all sorts of content, which will change out artists are incentivized and supported by patrons.

Basically I think you need to focus more on the economics of it rather than the technology or the specific things being sold as NFTs today. CTRL+C/CTRL+V still will exist; that's not what NFTs help solve.
SlowMovingInvestor
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

txhill wrote: Wed May 05, 2021 3:41 pm
SlowMovingInvestor wrote: Wed May 05, 2021 3:29 pm
Perhaps during the current speculative boom, we may see prices for the occasional NFT that are so high that an NYT column NFT sells for $560K and would give it's creator (let's assume for the moment that the author gets the $$) and doesn't mind if people steal copies of it. But clearly that's not going to work for the thousands of newspaper columns put out every day, if they were all NFTized, once the boom and novelty dies down.
What is being sold as NFTs right now--yes most of it is probably overpriced or trash. A lot of the highest profile sales are really more like an advertisement to the whole world that NFTs exist. But what you're going to see in the future is more people minting NFTs of all sorts of content, which will change out artists are incentivized and supported by patrons.

Basically I think you need to focus more on the economics of it rather than the technology or the specific things being sold as NFTs today. CTRL+C/CTRL+V still will exist; that's not what NFTs help solve.
It seems to me the economics of single sponsor patronage only work in the middle of a huge boom in collectibles and lots of speculative assets, especially among crypto assets, with a lot of newly rich crypto people looking for the next big thing or to pump up NFTs (the purchaser of the Beeple $69M painting said as much). Or people who are looking to bolster their crypto creds by buying NFTs (one of the cryptopunk purchasers said that). We already have lots of Patreon and like sites -- they've served a useful purpose, but are hardly revolutionary. Once the boom and the novelty of being a 'first of it's kind' NFT dies down, you'd expect to see more rational prices.

The technology is significant since this is referred to as an application for blockchain. I don't really see that putting a token on blockchain gives you anything more than the ability to speculate on the token -- which is fine, collectibles are inherently speculative. I don' t understand why people pay for Jeff Koons sculptures or collectible sneakers either.

And if artists or writers can make money on NFTs, more power to them.
txhill
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

SlowMovingInvestor wrote: Wed May 05, 2021 3:57 pm It seems to me the economics of single sponsor patronage only work in the middle of a huge boom in collectibles and lots of speculative assets, especially among crypto assets, with a lot of newly rich crypto people looking for the next big thing or to pump up NFTs (the purchaser of the Beeple $69M painting said as much). Or people who are looking to bolster their crypto creds by buying NFTs (one of the cryptopunk purchasers said that). We already have lots of Patreon and like sites -- they've served a useful purpose, but are hardly revolutionary.

The technology is significant since this is referred to as an application for blockchain. I don't really see that putting a token on blockchain gives you anything more than the ability to speculate on the token -- which is fine, collectibles are inherently speculative.
I suppose we'll see. You might be right that NFTs mainly serve the collectibles market. But I think there is a more substantial possibility of it being used more widely for all sorts of more common assets--especially if virtual worlds develop more fully so people can show them off more. Could take decades for that kind of use case to come around though.
TheBeanCounter
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

It really boils down to ideological differences. If you think that central banking, corporate censorship and centralization of power are issues that will continue to degrade society, you see the value in crypto. If you do not find these to be issues, then you most likely do not see the use case for crypto. The pro-crypto contingent is long individual freedom and short institutional dominance. You really can not have a crypto discussion without political and ideological arguments. I suggest listening to this podcast, should you be interested:

https://tim.blog/2021/03/24/balaji-srinivasan/
protagonist
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by protagonist »

Nobody knows what crypto will be doing in another ten years. Buying crypto today might make you fantastically rich,

But if this was a Bogleheads post in 1636, I am certain there would be at least one thread per month entitled: "Prove Me Wrong: Tulips are NOT good investments."
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watchnerd
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

TheBeanCounter wrote: Wed May 05, 2021 4:09 pm It really boils down to ideological differences. If you think that central banking, corporate censorship and centralization of power are issues that will continue to degrade society, you see the value in crypto. If you do not find these to be issues, then you most likely do not see the use case for crypto. The pro-crypto contingent is long individual freedom and short institutional dominance. You really can not have a crypto discussion without political and ideological arguments. I suggest listening to this podcast, should you be interested:

https://tim.blog/2021/03/24/balaji-srinivasan/
I just want to make money, not make a political statement.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
bogledogle
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by bogledogle »

txhill wrote: Wed May 05, 2021 3:41 pm Maybe we can use an example: beeple. A popular artist who has worked with digital media for years. He just sold 5000 of his daily works--which really are just .jpg files--for a substantial sum. He never could have sold a .jpg file for that kind of sum before NFTs existed. The Copyright Act of 1976 just isn't up to the task of protecting the rights of digital artists such that they can monetize their digital media. Now they have a new option. Yes, anyone can still copy the beeple jpegs. But he can also be rewarded and incentivized for making digital art.

What is being sold as NFTs right now--yes most of it is probably overpriced or trash. A lot of the highest profile sales are really more like an advertisement to the whole world that NFTs exist. But what you're going to see in the future is more people minting NFTs of all sorts of content, which will change out artists are incentivized and supported by patrons.

Basically I think you need to focus more on the economics of it rather than the technology or the specific things being sold as NFTs today. CTRL+C/CTRL+V still will exist; that's not what NFTs help solve.
Beeple has started selling his digital art with a physical signed print now because apparently people like owning a physical copy :happy

I think NFTs would work for high art, like stuff that sells for a lot of money, because studios and agents are now tasked with authenticating and processing transactions and they capture a fee for that service - this can be replaced with NFTs. But these studios also serve as the hype man to drive up prices and generate demand - this perhaps cannot be replaced but it might bring new influencers to replace the traditional one, but they need to be paid anyway.

One interesting use I hear is the smart contracts and kickback to the original artist since traditionally most artists or their heirs don't make millions from the art. If you could force an NFT to be the authenticator for art, you may be able to setup a trust fund that probably gets that money to your heirs. Although the transaction costs are in the 15 to 20% range on all the networks + artist commission + tax on collectibles. Also, it seems you can take a NFT from one exchange and sell it on another to avoid all of this.
TheBeanCounter
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

watchnerd wrote: Wed May 05, 2021 4:15 pm
TheBeanCounter wrote: Wed May 05, 2021 4:09 pm It really boils down to ideological differences. If you think that central banking, corporate censorship and centralization of power are issues that will continue to degrade society, you see the value in crypto. If you do not find these to be issues, then you most likely do not see the use case for crypto. The pro-crypto contingent is long individual freedom and short institutional dominance. You really can not have a crypto discussion without political and ideological arguments. I suggest listening to this podcast, should you be interested:

https://tim.blog/2021/03/24/balaji-srinivasan/
I just want to make money, not make a political statement.
Determining the value of something is largely based on the utility of it. As seen in this thread, many think that cryptocurrency provides no function that is necessary to their lives. That may be the case, but the crypto crowd is purporting the current system is not optimal. Obviously, one who thinks central banking is oppressive and one who thinks that central banking is optimal have divergent views of the world. An individual's view of the future has a lot to do with their assessment of crypto's value. Different worldview = different assessed value.
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