Prove Me Wrong: Cryptocurrencies are NOT good investments

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

Post by bogledogle »

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.
The 3rd world invented decentralized trust based financial institutions. Been there, done that.

http://en.wikipedia.org/wiki/Hawala
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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 4:24 pm 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.
I don't really need a particular political view if the math shows how invested capital generates profit.
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TheBeanCounter
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

watchnerd wrote: Wed May 05, 2021 4:30 pm
TheBeanCounter wrote: Wed May 05, 2021 4:24 pm 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.
I don't really need a particular worldview if the math shows how invested capital generates profit.
So what math are you using?
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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 4:33 pm So what math are you using?
Market cap weighting, just like for stocks and bonds.

If crypto starts to offer returns on capital that competes with stocks and bonds, it will steal market share from them.

If it remains a niche store of value with dubious returns on capital, it will remain small in comparison to stocks and bonds, like gold.

None of this requires me to hold a political POV on crypto, or even a thesis about this coin vs that coin.
Last edited by watchnerd on Wed May 05, 2021 4:40 pm, edited 1 time in total.
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HomerJ
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

I like centralized control of many things. Centralized and accountable, like in a democracy.

Pure individual freedom is anarchy. The pure freedom of crypto includes the freedom to have your money stolen or lost and there's nothing you can do about it...
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ballons
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by ballons »

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 do I cut out all the crypto miners and crypto middlemen though? I don't want to pay them anything as I value their work as zero. I want artists to get 100% without any premium or others taking their cut.

FYI: You can pay anyone today with cash and zero middlemen. Try it out. Call up your favorite video game studio and offer them cash.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by ballons »

claypigeon wrote: Wed May 05, 2021 2:04 pmSome 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.
...
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.
You say you can cut out the crypto middleman, but then say you get the privilege to pay a crypto middleman. I don't believe crypto middlemen are worth even hundredths of a cent. How do I get rid of them 100%?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

watchnerd wrote: Wed May 05, 2021 4:38 pm
TheBeanCounter wrote: Wed May 05, 2021 4:33 pm So what math are you using?
Market cap weighting, just like for stocks and bonds.

If crypto starts to offer returns on capital that competes with stocks and bonds, it will steal market share from them.

If it remains a niche store of value with dubious returns on capital, it will remain small in comparison to stocks and bonds, like gold.

None of this requires me to hold a political POV on crypto, or even a thesis about this coin vs that coin.
Most people only invest when they have conviction the asset will grow in value. By allocating to crypto based on its market cap, you are just saying you have conviction in other people's ability to determine value. If that is what you are doing, more power to you.
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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 5:06 pm Most people only invest when they have conviction the asset will grow in value. By allocating to crypto based on its market cap, you are just saying you have conviction in other people's ability to determine value. If that is what you are doing, more power to you.
Correct.

It's nothing novel -- it's the same idea as buying a cap weighted stock index, where 'other people' are doing price discovery of all the individual stocks.
Last edited by watchnerd on Wed May 05, 2021 5:13 pm, edited 1 time in total.
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TheBeanCounter
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

HomerJ wrote: Wed May 05, 2021 4:39 pm I like centralized control of many things. Centralized and accountable, like in a democracy.

Pure individual freedom is anarchy. The pure freedom of crypto includes the freedom to have your money stolen or lost and there's nothing you can do about it...
There was not pure anarchy before the federal reserve... After all, it is not that old. You think your money isn't being stolen when the printing press is full steam ahead? Like I said, those that do not find centralization of power to be an issue, do not find a need for crypto. Nothing wrong with that. It is just a point of disagreement.
Last edited by TheBeanCounter on Wed May 05, 2021 5:15 pm, edited 1 time in total.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by TheBeanCounter »

watchnerd wrote: Wed May 05, 2021 5:11 pm
TheBeanCounter wrote: Wed May 05, 2021 5:06 pm Most people only invest when they have conviction the asset will grow in value. By allocating to crypto based on its market cap, you are just saying you have conviction in other people's ability to determine value. If that is what you are doing, more power to you.
Correct.

It's nothing novel -- it's the same idea as buying a stock index, where 'other people' are doing price discovery of all the individual stocks.
That is respectable.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by claypigeon »

ballons wrote: Wed May 05, 2021 5:03 pm
claypigeon wrote: Wed May 05, 2021 2:04 pmSome 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.
...
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.
You say you can cut out the crypto middleman, but then say you get the privilege to pay a crypto middleman. I don't believe crypto middlemen are worth even hundredths of a cent. How do I get rid of them 100%?
Apologies if my post was unclear. You get paid as the middleman to delegate your crypto so others transactions can be validated. You also pay about 25 cents last I checked ( as it’s a flat 0.16 coin fee based on the crypto’s worth) which can be lowered and will once scaled, to transact yourself.

Point being, if all you do is hold, you earn 5-6% apy. If you transact a lot you pay a small fee less than a CC charge. But there is no middleman only people with the currency using the currency to validate each others currency transactions without the money leaving your wallet even when allowing it to validate others transactions (ie the proof of stake model). This is way different than Bitcoin and ethereum’s proof of work model that relies on a middle man and mining.

I think of it similar to when people were donating spare processing power to space research. Except way more efficient and less electricity use. Your coins serve as the software to validate transactions. That also means other software to run transactions doesn’t need to roll out en masse ie those credit card readers only to be used for a few minutes every day
Last edited by claypigeon on Wed May 05, 2021 5:23 pm, edited 1 time in total.
EnjoyIt
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

What is the difference between Bitcoin and Dogecoin? Why is one of them hated on so much on this forum when to me they appear exactly the same?
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

EnjoyIt wrote: Wed May 05, 2021 5:23 pm What is the difference between Bitcoin and Dogecoin? Why is one of them hated on so much on this forum when to me they appear exactly the same?
Fun factor
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

EnjoyIt wrote: Wed May 05, 2021 5:23 pm What is the difference between Bitcoin and Dogecoin? Why is one of them hated on so much on this forum when to me they appear exactly the same?
Fundamental difference? Not much. Key differences:
- Bitcoin has active development, Dogecoin does not. If for example quantum computing advances, bitcoin could adopt quantum proof algorithms. But for now this doesn't make a huge difference.
- Bitcoin has a supply cap, Dogecoin does not. Makes dogecoin better for currency purposes but worse for store of value. Over time dogecoin will be less inflationary but it's still quite inflationary right now
- Bitcoin still has far more users and volume on the trading side, and a far bigger mining / node network. Makes bitcoin more valuable and also more secure, at least for now...

Basically it's like asking what's the real difference between silver and gold. Maybe not so big a difference, but the one that has more people who believe it to have more value--that's the that has value. So for now the answer is bitcoin, but maybe if Dogecoin gets more widely accepted it could displace a good chunk of bitcoin's market.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by EnjoyIt »

txhill wrote: Wed May 05, 2021 5:36 pm
EnjoyIt wrote: Wed May 05, 2021 5:23 pm What is the difference between Bitcoin and Dogecoin? Why is one of them hated on so much on this forum when to me they appear exactly the same?
Fundamental difference? Not much. Key differences:
- Bitcoin has active development, Dogecoin does not. If for example quantum computing advances, bitcoin could adopt quantum proof algorithms. But for now this doesn't make a huge difference.
- Bitcoin has a supply cap, Dogecoin does not. Makes dogecoin better for currency purposes but worse for store of value. Over time dogecoin will be less inflationary but it's still quite inflationary right now
- Bitcoin still has far more users and volume on the trading side, and a far bigger mining / node network. Makes bitcoin more valuable and also more secure, at least for now...

Basically it's like asking what's the real difference between silver and gold. Maybe not so big a difference, but the one that has more people who believe it to have more value--that's the that has value. So for now the answer is bitcoin, but maybe if Dogecoin gets more widely accepted it could displace a good chunk of bitcoin's market.
Bitcoin tried development and failed. Thats why we have some bitcoin forks out there. I do not believe there is any bitcoin development going on that is taking root.

I think the biggest reason bitcoin owners hate on dogecoin is because it shows how easy it is for another low utility coin to gain popularity and go up in price. Maybe even take away market share from bitcoin. This is bitcoin specific and not Ethereum or other coins. Maybe first on the scene isn't enough anymore. Can Elon Musk make the Tesla coin and it will go to the moon? I bet he could and people will go gaga for it.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

EnjoyIt wrote: Wed May 05, 2021 5:42 pm Bitcoin tried development and failed. Thats why we have some bitcoin forks out there. I do not believe there is any bitcoin development going on that is taking root.
That's not accurate... they're just slow with development because they're taking a very cautious approach, and bitcoin also requires a large % of miners (i think 90%) to approve an upgrade before it goes live. Example: the taproot upgrade is now being voted on by miners. https://www.coindesk.com/bitcoin-taproo ... hs-onboard
I think the biggest reason bitcoin owners hate on dogecoin is because it shows how easy it is for another low utility coin to gain popularity and go up in price. Maybe even take away market share from bitcoin. This is bitcoin specific and not Ethereum or other coins. Maybe first on the scene isn't enough anymore. Can Elon Musk make the Tesla coin and it will go to the moon? I bet he could and people will go gaga for it.
I don't hate on dogecoin, I think it's odd and it could be a direct competitor with bitcoin, so I'm keeping an eye on it. But really my money is in Ethereum more than anything else now.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by ballons »

claypigeon wrote: Wed May 05, 2021 5:20 pm...
Apologies if my post was unclear. You get paid as the middleman to delegate your crypto so others transactions can be validated. You also pay about 25 cents last I checked ( as it’s a flat 0.16 coin fee based on the crypto’s worth) which can be lowered and will once scaled, to transact yourself. ...
I don't want to pay 25 cents to a middleman. How do I get rid of crypto middlemen, including any premiums, to bring that to $0.00?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by decapod10 »

EnjoyIt wrote: Wed May 05, 2021 5:42 pm
txhill wrote: Wed May 05, 2021 5:36 pm
EnjoyIt wrote: Wed May 05, 2021 5:23 pm What is the difference between Bitcoin and Dogecoin? Why is one of them hated on so much on this forum when to me they appear exactly the same?
Fundamental difference? Not much. Key differences:
- Bitcoin has active development, Dogecoin does not. If for example quantum computing advances, bitcoin could adopt quantum proof algorithms. But for now this doesn't make a huge difference.
- Bitcoin has a supply cap, Dogecoin does not. Makes dogecoin better for currency purposes but worse for store of value. Over time dogecoin will be less inflationary but it's still quite inflationary right now
- Bitcoin still has far more users and volume on the trading side, and a far bigger mining / node network. Makes bitcoin more valuable and also more secure, at least for now...

Basically it's like asking what's the real difference between silver and gold. Maybe not so big a difference, but the one that has more people who believe it to have more value--that's the that has value. So for now the answer is bitcoin, but maybe if Dogecoin gets more widely accepted it could displace a good chunk of bitcoin's market.
Bitcoin tried development and failed. Thats why we have some bitcoin forks out there. I do not believe there is any bitcoin development going on that is taking root.

I think the biggest reason bitcoin owners hate on dogecoin is because it shows how easy it is for another low utility coin to gain popularity and go up in price. Maybe even take away market share from bitcoin. This is bitcoin specific and not Ethereum or other coins. Maybe first on the scene isn't enough anymore. Can Elon Musk make the Tesla coin and it will go to the moon? I bet he could and people will go gaga for it.
Yeah, certainly Dogecoin is no threat to Ethereum. But there is certainly a universe where Dogecoin supplants BTC. I am not recommending Dogecoin by any means, but at this point it doesn't seem as impossible as it once did.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

decapod10 wrote: Wed May 05, 2021 6:38 pm
EnjoyIt wrote: Wed May 05, 2021 5:42 pm
txhill wrote: Wed May 05, 2021 5:36 pm
EnjoyIt wrote: Wed May 05, 2021 5:23 pm What is the difference between Bitcoin and Dogecoin? Why is one of them hated on so much on this forum when to me they appear exactly the same?
Fundamental difference? Not much. Key differences:
- Bitcoin has active development, Dogecoin does not. If for example quantum computing advances, bitcoin could adopt quantum proof algorithms. But for now this doesn't make a huge difference.
- Bitcoin has a supply cap, Dogecoin does not. Makes dogecoin better for currency purposes but worse for store of value. Over time dogecoin will be less inflationary but it's still quite inflationary right now
- Bitcoin still has far more users and volume on the trading side, and a far bigger mining / node network. Makes bitcoin more valuable and also more secure, at least for now...

Basically it's like asking what's the real difference between silver and gold. Maybe not so big a difference, but the one that has more people who believe it to have more value--that's the that has value. So for now the answer is bitcoin, but maybe if Dogecoin gets more widely accepted it could displace a good chunk of bitcoin's market.
Bitcoin tried development and failed. Thats why we have some bitcoin forks out there. I do not believe there is any bitcoin development going on that is taking root.

I think the biggest reason bitcoin owners hate on dogecoin is because it shows how easy it is for another low utility coin to gain popularity and go up in price. Maybe even take away market share from bitcoin. This is bitcoin specific and not Ethereum or other coins. Maybe first on the scene isn't enough anymore. Can Elon Musk make the Tesla coin and it will go to the moon? I bet he could and people will go gaga for it.
Yeah, certainly Dogecoin is no threat to Ethereum. But there is certainly a universe where Dogecoin supplants BTC. I am not recommending Dogecoin by any means, but at this point it doesn't seem as impossible as it once did.
Well at least you guys are finally coming around to the fact that Bitcoin is inherently worthless and stupid... just like Dogecoin.

But you've got me wondering about Ethereum and if anyone can create some useful apps (not just trading other crypto) on top of it.

So we're sorta moving towards each other.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Mr. Stubacca »

I really don't understand crypto. I may be !missing out on the next big wave but can live with that
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

HomerJ wrote: Wed May 05, 2021 6:57 pm Well at least you guys are finally coming around to the fact that Bitcoin is inherently worthless and stupid... just like Dogecoin.
I'd just add to that: ... just like Dogecoin, gold, and the dollar :)
But you've got me wondering about Ethereum and if anyone can create some useful apps (not just trading other crypto) on top of it.

So we're sorta moving towards each other.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Mr. Stubacca wrote: Wed May 05, 2021 7:17 pm I really don't understand crypto. I may be !missing out on the next big wave but can live with that
I'm not sure all of the Dogecoin buyers understand it, either.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

txhill wrote: Wed May 05, 2021 7:20 pm
HomerJ wrote: Wed May 05, 2021 6:57 pm Well at least you guys are finally coming around to the fact that Bitcoin is inherently worthless and stupid... just like Dogecoin.
I'd just add to that: ... just like Dogecoin, gold, and the dollar :)
You sound foolish if you think the dollar is the same as Dogecoin...

I might give you gold. I don't "invest" in that either. But gold basically just tracks inflation. It basically has been worth the same (on average - it does bounce around).

But 1 ounce of gold bought a very nice suit in 1776, and still does the same today.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

HomerJ wrote: Wed May 05, 2021 7:25 pm
txhill wrote: Wed May 05, 2021 7:20 pm
HomerJ wrote: Wed May 05, 2021 6:57 pm Well at least you guys are finally coming around to the fact that Bitcoin is inherently worthless and stupid... just like Dogecoin.
I'd just add to that: ... just like Dogecoin, gold, and the dollar :)
You sound foolish if you think the dollar is the same as Dogecoin...

I might give you gold. I don't "invest" in that either. But gold basically just tracks inflation. It basically has been worth the same (on average - it does bounce around).

But 1 ounce of gold bought a very nice suit in 1776, and still does the same today.
I just mean that the value of Bitcoin, Dogecoin, gold, and the dollar is derived in each case almost entirely from faith in their value. The difference between them is largely a matter of scale: the amount of faith people have placed in the dollar far exceeds their faith in Dogecoin. Maybe it will stay that way for a long time, maybe not. There is no such thing as immutable faith--look at the currencies that have come and gone, the governments that have come and gone, the religions that have come and gone...
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

txhill wrote: Wed May 05, 2021 7:54 pm

I just mean that the value of Bitcoin, Dogecoin, gold, and the dollar is derived in each case almost entirely from faith in their value. The difference between them is largely a matter of scale: the amount of faith people have placed in the dollar far exceeds their faith in Dogecoin. Maybe it will stay that way for a long time, maybe not. There is no such thing as immutable faith--look at the currencies that have come and gone, the governments that have come and gone, the religions that have come and gone...
Fiat currencies also derive their value from the power of enforcement of the state to determine what is legal tender, how taxes have to be paid, how benefits are paid out, and the ability to define financial crimes and fraud.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

watchnerd wrote: Wed May 05, 2021 8:18 pm
txhill wrote: Wed May 05, 2021 7:54 pm

I just mean that the value of Bitcoin, Dogecoin, gold, and the dollar is derived in each case almost entirely from faith in their value. The difference between them is largely a matter of scale: the amount of faith people have placed in the dollar far exceeds their faith in Dogecoin. Maybe it will stay that way for a long time, maybe not. There is no such thing as immutable faith--look at the currencies that have come and gone, the governments that have come and gone, the religions that have come and gone...
Fiat currencies also derive their value from the power of enforcement of the state to determine what is legal tender, how taxes have to be paid, how benefits are paid out, and the ability to define financial crimes and fraud.
I was merely simplifying because faith is the common denominator for all those things... but if you really want to break it down: Fiat currencies derive value from people's faith that other people will continue to believe them to have value and in the issuing government's ability to do the things you mention reliably without affecting supply too crazily (i.e., not printing too much money). Gold derives value from people's faith that other people will continue to believe it to be valuable and that its supply will increase at a stable rate (i.e., no one invents a philosopher's stone or gets a buncha gold from an asteroid etc.). Bitcoin/dogecoin derive value from people's faith that other people will believe it to be valuable and that the algorithms underlying them work and will continue to work as they seem to.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Janus887 »

Anyone passionately arguing a technical, economic and/or sociopolitical case in favor of crypto who has NOT been invested in it since pre-2017 is very likely just deluding themselves, and a creating a rationale for their naked speculation. People should be honest with themselves. How many people would be passionately arguing the merits of crypto if it was only appreciating in price steadily at a relatively modest 10-20% per year? Not many, I'd wager. Crypto has been driven by a small group of true believers since the beginning, but the vast majority of the money pouring into it these days is motivated almost entirely by a combination of greed and FOMO.

This is not to say that crypto cannot be a fantastic trade. Or that people shouldn't buy it. But if you're late to this party (as most buyers of crypto currently are) I would very much caution against getting sucked into the "HODL" cult. You're being set up as the dumb money/bagholders. It's like that old saying: if you're sitting around the poker table and don't recognize the player who's the dumb money, that's because it's YOU. The current crypto bubble has resulted in countless crypto "investors" who consider themselves extremely savvy due to the size of their recent (paper) gains, and whom don't realize they are actually the dumb money coming in at the late stages of a pump/bubble. A combination of greed, self-delusion and the execrable influence of the HODL cult will result in most of them riding the price elevator all the way down in the next crash and losing everything.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

txhill wrote: Wed May 05, 2021 8:24 pm
watchnerd wrote: Wed May 05, 2021 8:18 pm
txhill wrote: Wed May 05, 2021 7:54 pm

I just mean that the value of Bitcoin, Dogecoin, gold, and the dollar is derived in each case almost entirely from faith in their value. The difference between them is largely a matter of scale: the amount of faith people have placed in the dollar far exceeds their faith in Dogecoin. Maybe it will stay that way for a long time, maybe not. There is no such thing as immutable faith--look at the currencies that have come and gone, the governments that have come and gone, the religions that have come and gone...
Fiat currencies also derive their value from the power of enforcement of the state to determine what is legal tender, how taxes have to be paid, how benefits are paid out, and the ability to define financial crimes and fraud.
I was merely simplifying because faith is the common denominator for all those things... but if you really want to break it down: Fiat currencies derive value from people's faith that other people will continue to believe them to have value and in the issuing government's ability to do the things you mention reliably without affecting supply too crazily (i.e., not printing too much money). Gold derives value from people's faith that other people will continue to believe it to be valuable and that its supply will increase at a stable rate (i.e., no one invents a philosopher's stone or gets a buncha gold from an asteroid etc.). Bitcoin/dogecoin derive value from people's faith that other people will believe it to be valuable and that the algorithms underlying them work and will continue to work as they seem to.
It's far more than faith when dealing with the dollar. Faith is a common factor between dollars and bitcoin/dogecoin.. But it's a 10% overlap. 90% of the dollar's strength comes other factors. 100% of dogecoin is faith that others will find it valuable.

I still stand by my statement that's foolish to say that dogecoin and the dollar are basically the same. You weaken your case making such an assertion.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

txhill wrote: Wed May 05, 2021 8:24 pm
watchnerd wrote: Wed May 05, 2021 8:18 pm
txhill wrote: Wed May 05, 2021 7:54 pm

I just mean that the value of Bitcoin, Dogecoin, gold, and the dollar is derived in each case almost entirely from faith in their value. The difference between them is largely a matter of scale: the amount of faith people have placed in the dollar far exceeds their faith in Dogecoin. Maybe it will stay that way for a long time, maybe not. There is no such thing as immutable faith--look at the currencies that have come and gone, the governments that have come and gone, the religions that have come and gone...
Fiat currencies also derive their value from the power of enforcement of the state to determine what is legal tender, how taxes have to be paid, how benefits are paid out, and the ability to define financial crimes and fraud.
I was merely simplifying because faith is the common denominator for all those things... but if you really want to break it down: Fiat currencies derive value from people's faith that other people will continue to believe them to have value and in the issuing government's ability to do the things you mention reliably without affecting supply too crazily (i.e., not printing too much money).
If you invest in stocks, bonds or real estate, then you're doing the same thing -- assuming someone will buy it from you, assuming your exchanges will continue to run, assuming your stock/bond issuers wouldn't issue lots of new equity or debt. And for real estate, assuming that prices for rent/sale will continue to rise, that real estate registries will continue to function.

So all investing is based on faith ? Whether it's Magic cards or US debt ? That classification is so overly broad that it's not useful.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

SlowMovingInvestor wrote: Wed May 05, 2021 8:32 pm
txhill wrote: Wed May 05, 2021 8:24 pm
watchnerd wrote: Wed May 05, 2021 8:18 pm
txhill wrote: Wed May 05, 2021 7:54 pm

I just mean that the value of Bitcoin, Dogecoin, gold, and the dollar is derived in each case almost entirely from faith in their value. The difference between them is largely a matter of scale: the amount of faith people have placed in the dollar far exceeds their faith in Dogecoin. Maybe it will stay that way for a long time, maybe not. There is no such thing as immutable faith--look at the currencies that have come and gone, the governments that have come and gone, the religions that have come and gone...
Fiat currencies also derive their value from the power of enforcement of the state to determine what is legal tender, how taxes have to be paid, how benefits are paid out, and the ability to define financial crimes and fraud.
I was merely simplifying because faith is the common denominator for all those things... but if you really want to break it down: Fiat currencies derive value from people's faith that other people will continue to believe them to have value and in the issuing government's ability to do the things you mention reliably without affecting supply too crazily (i.e., not printing too much money).
If you invest in stocks, bonds or real estate, then you're doing the same thing -- assuming someone will buy it from you, assuming your exchanges will continue to run, assuming your stock/bond issuers wouldn't issue lots of new equity or debt. And for real estate, assuming that prices for rent/sale will continue to rise, that real estate registries will continue to function.

So all investing is based on faith ? Whether it's Magic cards or US debt ? That classification is so overly broad that it's not useful.
No, this is not correct. It's not all "faith".

Billions of people go to work every day and input their work into the system. It's not a closed system. It becomes more valuable over time because human effort gets converted into something valuable.

Dogecoin and Bitcoin have nothing like that.

Ethereum might someday. There is, at least, input into that system.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by oldfort »

txhill wrote: Wed May 05, 2021 8:24 pm
watchnerd wrote: Wed May 05, 2021 8:18 pm
txhill wrote: Wed May 05, 2021 7:54 pm

I just mean that the value of Bitcoin, Dogecoin, gold, and the dollar is derived in each case almost entirely from faith in their value. The difference between them is largely a matter of scale: the amount of faith people have placed in the dollar far exceeds their faith in Dogecoin. Maybe it will stay that way for a long time, maybe not. There is no such thing as immutable faith--look at the currencies that have come and gone, the governments that have come and gone, the religions that have come and gone...
Fiat currencies also derive their value from the power of enforcement of the state to determine what is legal tender, how taxes have to be paid, how benefits are paid out, and the ability to define financial crimes and fraud.
I was merely simplifying because faith is the common denominator for all those things... but if you really want to break it down: Fiat currencies derive value from people's faith that other people will continue to believe them to have value and in the issuing government's ability to do the things you mention reliably without affecting supply too crazily (i.e., not printing too much money). Gold derives value from people's faith that other people will continue to believe it to be valuable and that its supply will increase at a stable rate (i.e., no one invents a philosopher's stone or gets a buncha gold from an asteroid etc.). Bitcoin/dogecoin derive value from people's faith that other people will believe it to be valuable and that the algorithms underlying them work and will continue to work as they seem to.
Fiat currencies don't derive their value from faith. Fiat currencies derive their value from government enforcement. Try to pay your taxes in Dogecoin and the government will send people to arrest you.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by decapod10 »

HomerJ wrote: Wed May 05, 2021 6:57 pm
decapod10 wrote: Wed May 05, 2021 6:38 pm
EnjoyIt wrote: Wed May 05, 2021 5:42 pm
txhill wrote: Wed May 05, 2021 5:36 pm
EnjoyIt wrote: Wed May 05, 2021 5:23 pm What is the difference between Bitcoin and Dogecoin? Why is one of them hated on so much on this forum when to me they appear exactly the same?
Fundamental difference? Not much. Key differences:
- Bitcoin has active development, Dogecoin does not. If for example quantum computing advances, bitcoin could adopt quantum proof algorithms. But for now this doesn't make a huge difference.
- Bitcoin has a supply cap, Dogecoin does not. Makes dogecoin better for currency purposes but worse for store of value. Over time dogecoin will be less inflationary but it's still quite inflationary right now
- Bitcoin still has far more users and volume on the trading side, and a far bigger mining / node network. Makes bitcoin more valuable and also more secure, at least for now...

Basically it's like asking what's the real difference between silver and gold. Maybe not so big a difference, but the one that has more people who believe it to have more value--that's the that has value. So for now the answer is bitcoin, but maybe if Dogecoin gets more widely accepted it could displace a good chunk of bitcoin's market.
Bitcoin tried development and failed. Thats why we have some bitcoin forks out there. I do not believe there is any bitcoin development going on that is taking root.

I think the biggest reason bitcoin owners hate on dogecoin is because it shows how easy it is for another low utility coin to gain popularity and go up in price. Maybe even take away market share from bitcoin. This is bitcoin specific and not Ethereum or other coins. Maybe first on the scene isn't enough anymore. Can Elon Musk make the Tesla coin and it will go to the moon? I bet he could and people will go gaga for it.
Yeah, certainly Dogecoin is no threat to Ethereum. But there is certainly a universe where Dogecoin supplants BTC. I am not recommending Dogecoin by any means, but at this point it doesn't seem as impossible as it once did.
Well at least you guys are finally coming around to the fact that Bitcoin is inherently worthless and stupid... just like Dogecoin.

But you've got me wondering about Ethereum and if anyone can create some useful apps (not just trading other crypto) on top of it.

So we're sorta moving towards each other.
Well, I own exactly 0 BTC, so I'm not the one you are trying to convince re: Bitcoin.

I think Ethereum has a lot of potential but there are a lot of barriers that need to be addressed that may or may not be able to be overcome long term. The potential is high enough where I'm willing to roll the dice a bit with Ether, though I recognize that it might not quite make it.

The Federal Reserve Bank of St Louis put out a paper discussing Ethereum:

(Full version)
https://research.stlouisfed.org/publica ... 0fcf0c0a27

(news article version)
https://cryptobriefing.com/st-louis-fed ... igm-shift/

Basically, they discuss the major problems they see with using Ethereum for financial transactions, however do recognize some potential positives as well. The conclusion from the report was:

"
DeFi offers exciting opportunities and has the potential to create a truly open, transparent, and immutable financial infrastructure. Because DeFi consists of numerous highly interoperable protocols and applications, every individual can verify all transactions and data is readily available for users and researchers to analyze.
DeFi has unleashed a wave of innovation. On the one hand, developers are using smart contracts and the decentralized settlement layer to create trustless versions of traditional financial instruments. On the other hand, they are creating entirely new financial instruments that could not be realized without the underlying public blockchain. Atomic swaps, autonomous liquidity pools, decentralized stablecoins, and flash loans are just a few of many examples that show the great potential of this ecosystem.
While this technology has great potential, there are certain risks involved. Smart contracts can have security issues that may allow for unintended usage, and scalability issues limit the number of users. Moreover, the term "decentralized" is deceptive in some cases. Many protocols and applications use external data sources and special admin keys to manage the system, conduct smart contract upgrades, or even perform emergency shutdowns. While this does not necessarily constitute a problem, users should be aware that, in many cases, there is much trust involved. However, if these issues can be solved, DeFi may lead to a paradigm shift in the financial industry and potentially contribute toward a more robust, open, and transparent financial infrastructure."
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by claypigeon »

ballons wrote: Wed May 05, 2021 6:30 pm
claypigeon wrote: Wed May 05, 2021 5:20 pm...
Apologies if my post was unclear. You get paid as the middleman to delegate your crypto so others transactions can be validated. You also pay about 25 cents last I checked ( as it’s a flat 0.16 coin fee based on the crypto’s worth) which can be lowered and will once scaled, to transact yourself. ...
I don't want to pay 25 cents to a middleman. How do I get rid of crypto middlemen, including any premiums, to bring that to $0.00?
Develop a more efficient coin. Ultimately there’s some theoretical cost with any transaction. But much cheaper for the cost to be the actual transaction cost than the transaction cost plus a brick and mortar bank plus an ACH system plus salaries and employees and pensions and bailouts, etc. Somehow with 0.1% interest and making a profit elsewhere, banks still get away with these fees. My hope is at minimum defi forces brick and mortar banks to cut their ridiculous fees. Become more like vanguard/ fidelity/ Ameritrade and offer subsidized free trades making up the cost in other areas
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

claypigeon wrote: Wed May 05, 2021 10:08 pm
ballons wrote: Wed May 05, 2021 6:30 pm
claypigeon wrote: Wed May 05, 2021 5:20 pm...
Apologies if my post was unclear. You get paid as the middleman to delegate your crypto so others transactions can be validated. You also pay about 25 cents last I checked ( as it’s a flat 0.16 coin fee based on the crypto’s worth) which can be lowered and will once scaled, to transact yourself. ...
I don't want to pay 25 cents to a middleman. How do I get rid of crypto middlemen, including any premiums, to bring that to $0.00?
Develop a more efficient coin. Ultimately there’s some theoretical cost with any transaction. But much cheaper for the cost to be the actual transaction cost than the transaction cost plus a brick and mortar bank plus an ACH system plus salaries and employees and pensions and bailouts, etc. Somehow with 0.1% interest and making a profit elsewhere, banks still get away with these fees. My hope is at minimum defi forces brick and mortar banks to cut their ridiculous fees. Become more like vanguard/ fidelity/ Ameritrade and offer subsidized free trades making up the cost in other areas
I'm curious what fees you're actually paying to your bank?

I don't actually have any -- no account fee, cash back rewards card, etc.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by HomerJ »

watchnerd wrote: Wed May 05, 2021 10:20 pm
claypigeon wrote: Wed May 05, 2021 10:08 pm
ballons wrote: Wed May 05, 2021 6:30 pm
claypigeon wrote: Wed May 05, 2021 5:20 pm...
Apologies if my post was unclear. You get paid as the middleman to delegate your crypto so others transactions can be validated. You also pay about 25 cents last I checked ( as it’s a flat 0.16 coin fee based on the crypto’s worth) which can be lowered and will once scaled, to transact yourself. ...
I don't want to pay 25 cents to a middleman. How do I get rid of crypto middlemen, including any premiums, to bring that to $0.00?
Develop a more efficient coin. Ultimately there’s some theoretical cost with any transaction. But much cheaper for the cost to be the actual transaction cost than the transaction cost plus a brick and mortar bank plus an ACH system plus salaries and employees and pensions and bailouts, etc. Somehow with 0.1% interest and making a profit elsewhere, banks still get away with these fees. My hope is at minimum defi forces brick and mortar banks to cut their ridiculous fees. Become more like vanguard/ fidelity/ Ameritrade and offer subsidized free trades making up the cost in other areas
I'm curious what fees you're actually paying to your bank?

I don't actually have any -- no account fee, cash back rewards card, etc.
Yeah, me too... What "ridiculous" fees?
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SlowMovingInvestor
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

claypigeon wrote: Wed May 05, 2021 10:08 pm Somehow with 0.1% interest and making a profit elsewhere, banks still get away with these fees. My hope is at minimum defi forces brick and mortar banks to cut their ridiculous fees. Become more like vanguard/ fidelity/ Ameritrade and offer subsidized free trades making up the cost in other areas
Selling order flow (the RH model) or offering essentially 0 interest on cash deposits even when rates were higher (TDAM) seems to be a far less transparent method of making up cost rather than directly charging fees (although as it happens, I'm not charged any fees by my bank for ACH or wire).

FWIW, money transfer via mobile money in Africa and several other countries has been around for a while (nearly 15 years in Africa). It's very cheap, doesn't even need Internet (only SMS). You don't need Cardano, smartphones or learn how to use Daedalus wallets.
Last edited by SlowMovingInvestor on Wed May 05, 2021 10:42 pm, edited 1 time in total.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

HomerJ wrote: Wed May 05, 2021 10:23 pm
watchnerd wrote: Wed May 05, 2021 10:20 pm
claypigeon wrote: Wed May 05, 2021 10:08 pm

Develop a more efficient coin. Ultimately there’s some theoretical cost with any transaction. But much cheaper for the cost to be the actual transaction cost than the transaction cost plus a brick and mortar bank plus an ACH system plus salaries and employees and pensions and bailouts, etc. Somehow with 0.1% interest and making a profit elsewhere, banks still get away with these fees. My hope is at minimum defi forces brick and mortar banks to cut their ridiculous fees. Become more like vanguard/ fidelity/ Ameritrade and offer subsidized free trades making up the cost in other areas
I'm curious what fees you're actually paying to your bank?

I don't actually have any -- no account fee, cash back rewards card, etc.
Yeah, me too... What "ridiculous" fees?
Me three. I make money from my banks and (even more so) from my bank issued credit cards -- account opening bonuses, signup bonuses. No ACH or wire fee. Safety deposit box (to keep crypto wallets :happy), other services such as guarantees.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

SlowMovingInvestor wrote: Wed May 05, 2021 10:36 pm
HomerJ wrote: Wed May 05, 2021 10:23 pm
watchnerd wrote: Wed May 05, 2021 10:20 pm
claypigeon wrote: Wed May 05, 2021 10:08 pm

Develop a more efficient coin. Ultimately there’s some theoretical cost with any transaction. But much cheaper for the cost to be the actual transaction cost than the transaction cost plus a brick and mortar bank plus an ACH system plus salaries and employees and pensions and bailouts, etc. Somehow with 0.1% interest and making a profit elsewhere, banks still get away with these fees. My hope is at minimum defi forces brick and mortar banks to cut their ridiculous fees. Become more like vanguard/ fidelity/ Ameritrade and offer subsidized free trades making up the cost in other areas
I'm curious what fees you're actually paying to your bank?

I don't actually have any -- no account fee, cash back rewards card, etc.
Yeah, me too... What "ridiculous" fees?
Me three. I make money from my banks and (even more so) from my bank issued credit cards -- account opening bonuses, signup bonuses. No ACH or wire fee. Safety deposit box (to keep crypto wallets :happy), other services such as guarantees.
You are all thinking about it wrong. You're paying quite a lot by keeping cash in a standard bank checking or savings account, and that's not even counting the effects of inflation. If you put your cash in a stablecoin that's pegged to the dollar and drop it into a DeFi liquidity protocol or put it in something like BlockFi, you'll earn 8%+ on it. And those stablecoins are instantly transferable and switchable back into USD. That is what you are paying the people who hold cash for you: 8%+ APY on your cash.

And then if you add trying to transfer larger sums of money? It's not instant, there's a cap on $, and if you try to do it internationally it takes forever and costs a lot.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

SlowMovingInvestor wrote: Wed May 05, 2021 10:24 pm

FWIW, money transfer via mobile money in Africa and several other countries has been around for a while (nearly 15 years in Africa). It's very cheap, doesn't even need Internet (only SMS). You don't need Cardano, smartphones or learn how to use Daedalus wallets.
This is one of the reasons I own Safaricom
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

txhill wrote: Wed May 05, 2021 10:45 pm

You are all thinking about it wrong. You're paying quite a lot by keeping cash in a standard bank checking or savings account, and that's not even counting the effects of inflation. If you put your cash in a stablecoin that's pegged to the dollar and drop it into a DeFi liquidity protocol or put it in something like BlockFi, you'll earn 8%+ on it. And those stablecoins are instantly transferable and switchable back into USD. That is what you are paying the people who hold cash for you: 8%+ APY on your cash.
But that's mousenuts relative to our investment portfolio and how little cash we keep in checking, which usually hovers around $10k.

$80 a year, before taxes, $52 after taxes.

I'll pay $52 opportunity cost just to avoid the hassle of moving money around through extra steps. Plus my paychecks have to go to my checking account, and my bills get paid from there....it's just not worth the bother for $52.

I spend far more than that on other services every year that basically just save me time from having to do things myself....e.g. I don't cut my own hair.

Heck, we pay more than $52 each month just on streaming services.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

watchnerd wrote: Wed May 05, 2021 10:56 pm
txhill wrote: Wed May 05, 2021 10:45 pm

You are all thinking about it wrong. You're paying quite a lot by keeping cash in a standard bank checking or savings account, and that's not even counting the effects of inflation. If you put your cash in a stablecoin that's pegged to the dollar and drop it into a DeFi liquidity protocol or put it in something like BlockFi, you'll earn 8%+ on it. And those stablecoins are instantly transferable and switchable back into USD. That is what you are paying the people who hold cash for you: 8%+ APY on your cash.
But that's mousenuts relative to our investment portfolio and how little cash we keep in checking, which usually hovers around $10k.

$80 a year, before taxes, $52 after taxes.

I'll pay $52 opportunity cost just to avoid the hassle of moving money around through extra steps. Plus my paychecks have to go to my checking account, and my bills get paid from there....it's just not worth the bother for $52.

I spend far more than that on other services every year that basically just save me time from having to do things myself....e.g. I don't cut my own hair.
Missing a zero :) That's $800 a year on just $10k. But yes it's not lifechanging money. But you're still paying the bank effectively $800 / year. When you give them money and expect nothing or just pennies in return, you're just giving them a free loan that they'll use to put your money to work. What about that is attractive? Not much other than FDIC insurance... and if DeFi becomes as well established or even insured as a savings account? Game over for banks.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by SlowMovingInvestor »

txhill wrote: Wed May 05, 2021 10:45 pm
SlowMovingInvestor wrote: Wed May 05, 2021 10:36 pm
HomerJ wrote: Wed May 05, 2021 10:23 pm
watchnerd wrote: Wed May 05, 2021 10:20 pm
I'm curious what fees you're actually paying to your bank?

I don't actually have any -- no account fee, cash back rewards card, etc.
Yeah, me too... What "ridiculous" fees?
Me three. I make money from my banks and (even more so) from my bank issued credit cards -- account opening bonuses, signup bonuses. No ACH or wire fee. Safety deposit box (to keep crypto wallets :happy), other services such as guarantees.
You are all thinking about it wrong. You're paying quite a lot by keeping cash in a standard bank checking or savings account, and that's not even counting the effects of inflation. If you put your cash in a stablecoin that's pegged to the dollar and drop it into a DeFi liquidity protocol or put it in something like BlockFi, you'll earn 8%+ on it. And those stablecoins are instantly transferable and switchable back into USD. That is what you are paying the people who hold cash for you: 8%+ APY on your cash.

And then if you add trying to transfer larger sums of money? It's not instant, there's a cap on $, and if you try to do it internationally it takes forever and costs a lot.
No, I'm not. Banks are not making 8% on what I deposit with them, I know their loan rates for mortgage loans. If I were so minded I would try P2P or real estate lending myself, cutting out the middleman, but I'm not,

And I do have a BlockFi account which earns 8.6%. But that's NOT where I want my cash to be - an non FDIC account that is collateralized by volatile, risky assets . That BlockFi account is what I consider part of my high yield bond allocation, NOT my cash.

I transfer internationally with Transferwise. It's pretty fast, very cheap, excellent forex. Not instant, but I like the fact that they do verification. Domestic wires via my banks are free, and their limits are fairly high. If I wanted to transfer more than that, I'd probably get a higher limit set up.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

txhill wrote: Wed May 05, 2021 10:58 pm [

Missing a zero :) That's $800 a year on just $10k. But yes it's not lifechanging money.
You're right.

Damn, it's been a long day.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

SlowMovingInvestor wrote: Wed May 05, 2021 10:59 pm No, I'm not. Banks are not making 8% on what I deposit with them, I know their loan rates for mortgage loans. If I were so minded I would try P2P or real estate lending myself, cutting out the middleman, but I'm not,

And I do have a BlockFi account which earns 8.6%. But that's NOT where I want my cash to be - an non FDIC account that is collateralized by volatile, risky assets . That BlockFi account is what I consider part of my high yield bond allocation, NOT my cash.

I transfer internationally with Transferwise. It's pretty fast, very cheap, excellent forex. Not instant, but I like the fact that they do verification. Domestic wires via my banks are free, and their limits are fairly high. If I wanted to transfer more than that, I'd probably get a higher limit set up.
So I should clarify that right now, DeFi is early--I don't trust it with more than a really small % of my funds (and I don't really keep much in cash anyway). But that is going to change over time. It'll either get insured because the government will just accept that this is the way things are going to be, or it'll get so reliable over time that concerns about its stability will fade away. Yes, with those will also come a drop in the APY i'm sure. But still, it takes all the work out from your end in terms of lending and earning interest on it, and in theory has ZERO default risk because of the way they structure the services as overcollateralized. It's a VERY fascinating development and something traditional banks are extremely worried about because they're going to have to adapt to stay in the game.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by Keenobserver »

av111 wrote: Wed May 05, 2021 3:31 pm
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
So stocks are not speculative? We dont get stock bubbles? I thought it was simple; a stock is worth what whatever someone is willing to pay for it in the open market. Same holds true for crypto, even DODGE despite its lack of apparant utility. A bubble yes, but lets not pretend stocks are not speculative and dont have bubbles. Anyone investing in cryptosphere will acknowledge its a high risk high reward game simiar to penny stocks or pharma stocks. Why the hate?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

SlowMovingInvestor wrote: Wed May 05, 2021 10:59 pm If I were so minded I would try P2P or real estate lending myself, cutting out the middleman, but I'm not,
I've done P2P lending via Prosper for years.

The range of interest rates available is similar to BlockFi -- less for the AAA loans, even more for the high risk. And you at least have a consumer credit rating system as a bit of an information source.

Its a miniscule amount, but we consider those to be junk bonds.

We've also done direct lending via our PE portfolio, where the base yields about the same as publicly traded bonds from a pure credit POV, but we get another 1-3% as a liquidity premium.
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by watchnerd »

Keenobserver wrote: Wed May 05, 2021 11:05 pm a stock is worth what whatever someone is willing to pay for it in the open market.
Book value?
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Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by av111 »

Keenobserver wrote: Wed May 05, 2021 11:05 pm
av111 wrote: Wed May 05, 2021 3:31 pm
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
So stocks are not speculative? We dont get stock bubbles? I thought it was simple; a stock is worth what whatever someone is willing to pay for it in the open market. Same holds true for crypto, even DODGE despite its lack of apparant utility. A bubble yes, but lets not pretend stocks are not speculative and dont have bubbles. Anyone investing in cryptosphere will acknowledge its a high risk high reward game simiar to penny stocks or pharma stocks. Why the hate?
Stocks represent regular businesses. They have a basis, book value, track record of revenue and profits and possibility of impact on these metrics from macro and micro environment. Crypto is nothing like that so it is hard to see anything but speculation
AV111
txhill
Posts: 628
Joined: Tue Mar 16, 2021 12:27 pm

Re: Prove Me Wrong: Cryptocurrencies are NOT good investments

Post by txhill »

watchnerd wrote: Wed May 05, 2021 11:08 pm
SlowMovingInvestor wrote: Wed May 05, 2021 10:59 pm If I were so minded I would try P2P or real estate lending myself, cutting out the middleman, but I'm not,
I've done P2P lending via Prosper for years.

The range of interest rates available is similar to BlockFi -- less for the AAA loans, even more for the high risk. And you at least have a consumer credit rating system as a bit of an information source.

Its a miniscule amount, but we consider those to be junk bonds.

We've also done direct lending via our PE portfolio, where the base yields about the same as publicly traded bonds from a pure credit POV, but we get another 1-3% as a liquidity premium.
I never was a fan of P2P lending because of the counterparty risk, and also doesn't it require locking up funds for a while? I hadn't looked into it in a long time. I imagine P2P lending will be even less attractive once DeFi really takes off.
Locked