OT: Any Ethereum (ETH) investors here?

[summilux]

I missed the Bitcoin wave but I keep hearing about ETH as the next big cryptocurrency to invest in. I'm probably too risk adverse to buy some but I know there were some BitCoin investors here and I'm curious as to whether ETH might be BitCoin for 2017.

[nrs5000]

This is speculation, not investment.

[likebikes]

tulip mania 2.0

[54ny77]

I prefer frozen concentrated orange juice futures.

http://25.media.tumblr.com/tumblr_mdgjhhzTU81qcgwn4o8_r1_250.gif

[cat6]

One of my close friends has been harping BitCoin and ETH for several years now, regularly tried to recruit me to join him in investing. I never took the time to study or fully understand so stayed away.

He's netted over $50K USD off of very modest investments.

Investment or speculation there are people making real gains. I'm not building a mining rig or converting my $USD savings into ETH but it seems like time to pay closer attention.

[summilux]

What peaked my interest is that ETH has gone up 10-fold in the last few months. I haven't done a whole lot of research but there seems to be a lot of good thinking behind it.

[Llewellyn]

What peaked my interest is that ETH has gone up 10-fold in the last few months. I haven't done a whole lot of research but there seems to be a lot of good thinking behind it.

To me that would be waving so many red flags about why you should stay away.

[MattTuck]

The next 'big' thing is right around the corner. Tezos is having their ICO in a few days. I am following crypto currencies as an interested spectator, not an investor with skin in the game.

That said, if you want to get in on the ground floor of one of these, with some notable backers, this could be your chance.

[mtechnica]

If I had the money I would seriously consider building a rig to mine eth, but that's just me. At current value you could start profiting in months taking into account the cost of the computer (2-3k)

[mtechnica]

Also there is a lot more to eth than bitcoin, they're not exactly the same thing.

[MattTuck]

Also there is a lot more to eth than bitcoin, they're not exactly the same thing.

Yes, Tezos is like Ethereum. Which, let me just say, if eth goes belly up, people are going to be like, "you mean the crypto currency named ETHER turned out to be ether? who would have guessed? The writing was on the wall."

My biggest problem with a lot of these currencies is what I've dubbed the wampum conundrum. Specifically, that is the idea that the natives were going along and using wampum as a form of currency for trading up until European settlers figured out a way to make wampum more easily, and the value declined.

This was a case of inflation, and I know that these crypto currencies have ways to prevent inflation. But the point is that if you were a native using wampum, you'd have no way of knowing (in your understanding of the world) that wampum was a bad choice for currency.

I'm concerned these coins are the same way. They may be good at some things, and then at some point in the future, something happens (that we cannot predict) and it either obsoletes or undermines confidence in the networks of the current crop of alt currencies.

[pbarry]

These fledglings go first when there is a downturn. Not a good time to buy right now. Don't know enuf about eth, but have heard the pitch. If you have BC already, hold until the last minute.

[nate2351]

I think ETH is the most interesting crypto right now in what it's trying to do. Bitcoin and all of it's offshoots are trying to replace fiat currency, whereas ETH is trying to change the future of computing. It's fascinating.

If you're curious about investing I use Coinbase which is as easy as any online investing service. Log in, attach a card or bank account, start trading.

[thegunner]

i really don't understand why people bash cryptocurrency (and consequently lump all of them together) without understanding the point of what they're trying to accomplish.

the whole smartcontract / app backbone for eth makes me feel like it has more of a future in tech, so call me a believer. i think that inherently also means there's going to be another crappy VC-culture boom based around ICOs, but reward outweighs risk to me.

[adub]

Gold is going to be the next big thing, oh wait..

[Louis]

If I had the money I would seriously consider building a rig to mine eth, but that's just me. At current value you could start profiting in months taking into account the cost of the computer (2-3k)

I'm no expert on this sort of thing, but last I heard if it's this easy for anyone to make a ton of dough, then no one will.

[nate2351]

I'm no expert on this sort of thing, but last I heard if it's this easy for anyone to make a ton of dough, then no one will.

We're already seeing with bitcoin that the only people making money off mining are companies who can invest in an entire building full of miners. Often in places where the weather is cold, electricity is cheap, and there is reliable internet.

The way people talk about mining is vastly oversimplified.

[sg8357]

Invest in Ethereum, is similar it investing in blackjack futures.
But riskier. Gold is a fiat currency, so are cigarettes or 7.62mm cartridges,
depending on the current environment.

[verticaldoug]

We're already seeing with bitcoin that the only people making money off mining are companies who can invest in an entire building full of miners. Often in places where the weather is cold, electricity is cheap, and there is reliable internet.

The way people talk about mining is vastly oversimplified.

I dont even think the miners in iceland make any money.

If you believe the calculators, you can buy Antminer S9 which is suppose to be the fastest hasher for hobbyists. It will cost you about $3k. You need separate power supply adapter which costs about $230. You run if for a month non-stop it will consumer 1375kwh, and you will get about .11 bitcoins.

The average rate in US around $.122, you will make a little bit of money per month. But it will still take you 6-10 months at current bitcoin prices to pay off your equipment investment.

All you need is for the US Treasury to put out a directive saying the bitcoin exchanges don't comply with AML/KYC for investment and prohibit USD transactions. Bitcoin dies quickly in that scenario.

[MattTuck]

Invest in Ethereum, is similar it investing in blackjack futures.
But riskier. Gold is a fiat currency, so are cigarettes or 7.62mm cartridges,
depending on the current environment.

Gold is not a fiat currency, it is the opposite... just straight up money :)

From investopedia: Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on the faith and credit of the economy.

Read more: Fiat Money http://www.investopedia.com/terms/f/fiatmoney.asp#ixzz4wzvuqXxd


We're already seeing with bitcoin that the only people making money off mining are companies who can invest in an entire building full of miners. Often in places where the weather is cold, electricity is cheap, and there is reliable internet.

The way people talk about mining is vastly oversimplified.



I dont even think the miners in iceland make any money.

If you believe the calculators, you can buy Antminer S9 which is suppose to be the fastest hasher for hobbyists. It will cost you about $3k. You need separate power supply adapter which costs about $230. You run if for a month non-stop it will consumer 1375kwh, and you will get about .11 bitcoins.

The average rate in US around $.122, you will make a little bit of money per month. But it will still take you 6-10 months at current bitcoin prices to pay off your equipment investment.

All you need is for the US Treasury to put out a directive saying the bitcoin exchanges don't comply with AML/KYC for investment and prohibit USD transactions. Bitcoin dies quickly in that scenario.

This is a result of the way the existing bitcoin system is set up. Other crypto-currencies are experimenting with different hashes that would make it harder for this type of specialized hardware to have an advantage. Also, there is some talk in the crypto-currency world about approaches that would disincentivize the trend toward centralization of hashing power.

Most of the recent ramps in bitcoin price have been from Asia -- this is a global phenomenon. I'm sure the treasury could make some moves, but I think there is sufficient wealth invested in it now that you'd see real legal challenges.

[verticaldoug]

This is a result of the way the existing bitcoin system is set up. Other crypto-currencies are experimenting with different hashes that would make it harder for this type of specialized hardware to have an advantage. Also, there is some talk in the crypto-currency world about approaches that would disincentivize the trend toward centralization of hashing power.

Most of the recent ramps in bitcoin price have been from Asia -- this is a global phenomenon. I'm sure the treasury could make some moves, but I think there is sufficient wealth invested in it now that you'd see real legal challenges.

It will just increase electrical demands if you decrease the efficiency of the processors.

The value of bitcoin is convertibility into other currencies. US Treasury can just tell US Banks not to facilitate accounts of the exchanges. Nothing to challenge there. They do it all the time to offshore banks and it was the way they crippled off-shore gambling sites.


In China/India and other controlled currencies, it is a way to facilitate getting your money out of the country. It is essentially facilitating currency controls evasion.. If you are worried about the state taking your money, you really dont care what it costs to get your money out.

[MattTuck]

I don't know enough about the new hashing algorithms to say for sure, but my non-technical understanding was that they required more time, not just more energy. I'm not sure how this is accomplished, but I think it is not something that you can just throw more energy/hashing power at. If you're interested (and can possibly set me straight in my understanding), I'll try to dig up the article I saw.

Aswath Damodaran is one of the smartest valuation guys that I've ever met. I really thought his recent video was well reasoned and moved away from a lot of the hype/doom kind of predictions that are out there.

His blog post.
https://aswathdamodaran.blogspot.com/2017/10/the-bitcoin-boom-asset-currency.html

youtube video: https://www.youtube.com/watch?v=8iNeXCAM_Ik


There are people who have tens of millions of dollars, if not more, in bitcoin holdings that would challenge any federal efforts to hobble it. That is not to mention the many connected hedge funds, venture funds and corporations that are working in this space. I think the horse has left the barn on this one, the government probably could have shut it down 4 or 5 years ago under the auspices that it is minting money and therefor illegal. Now that several agencies have made rulings on it and regulated it, I think it would be an uphill battle to stop it.

[verticaldoug]

Damodaran's book was one of the bibles for finance in the 90's.

Corporations like JPM, BofA are investing in the underlying blockchain.

VC's are investing in stuff like Coinbase which runs GDAX. This looks more like a conventional exchange than anything specific to crypto besides letting you trade.

The underlying tech can be valid, but you can regulate the cryptocurrency independently from the tech.

I just see this as an improved version of Charles Ponzi and the IRC. It just has the benefit of the massive scale of the internet to lure in new investors, and the advantage that they don't have to promise a fixed return.

[thegunner]

I don't know enough about the new hashing algorithms to say for sure, but my non-technical understanding was that they required more time, not just more energy. I'm not sure how this is accomplished, but I think it is not something that you can just throw more energy/hashing power at. If you're interested (and can possibly set me straight in my understanding), I'll try to dig up the article I saw.

the two are intertwined, you increase complexity for calculation of blocks in the blockchain and it's (moderately dis)proportionately worse on the hardware, it scales upwards at a set interval of 'x' number of blocks verified, something like https://en.bitcoin.it/wiki/Difficulty).

https://www.nytimes.com/2017/09/13/business/bitcoin-mine-china.html

is a pleasantly fun read on profitability of btc mining (hint hint: it's not for individuals anymore), although it focuses more on the day to day of the workers staffing the mining operations.

[colbyh]

There are people who have tens of millions of dollars, if not more, in bitcoin holdings that would challenge any federal efforts to hobble it. That is not to mention the many connected hedge funds, venture funds and corporations that are working in this space. I think the horse has left the barn on this one, the government probably could have shut it down 4 or 5 years ago under the auspices that it is minting money and therefor illegal. Now that several agencies have made rulings on it and regulated it, I think it would be an uphill battle to stop it.

Nothing that the Government could do to make it "illegal" in that sense. You aren't minting (fiat) money and any argument otherwise would undermine other sorts of value creation like, say, starting a company.

But just because some people have millions of dollars invested doesn't mean the currency can't be regulated to death. Large sweeping actions wouldn't be needed to cause hiccups in liquidity, and any downward trend in liquidity (sufficiently large to cause a run) could tank the value faster than any state's actions.

Until companies start building viable, valuable technology on top of one of these blockchains their related currencies will be relegated to speculation. Makes for a very dangerous game to play, sure, but if your finances are sufficiently divested and you're already looking at either angel or early-stage investing as a whole the risk profile isn't that different.

[zetroc]

https://www.amazon.com/Phishing-Phools-Economics-Manipulation-Deception/dp/1522635009

[josephr]

Also there is a lot more to eth than bitcoin, they're not exactly the same thing.

oh man....I was just getting comfortable ignoring 'shimano vs campy' and 'moots vs. lynskey' snobbery...now bitcoin vs. eth???

[efuentes]

Bitcoin is a simple and secure blockchain based cryptocurrency, that´s about it, Ethereum on the other hand (Or a derivative of it), if it lives up to its promise, will change the way a lot of people transfer value world wide, its the real enemy to the central banking systems.

Be prepared to read a lot before getting into crypto-mining if you don´t want to lose time and money.

[likebikes]

bump

[fignon's barber]

Best blockchain story to date: Long Island Iced Tea Company (which makes iced tea) changes its name to Long Blockchain Company (still making same tea) and stock price soars 500% within hours.

[myth_jimmy]

My wife, who is more knowledgeable than me put some money in ETH (and a portion of one BTC) many months ago.

We've 4x our investment (or 6x...she has the wallet, I can't check)

ETH is structurally different than BTC and allegedly has more potential uses than BTC. Something to do with gaming and transactions and building programs on ETH, she's works in games and knows things I don't.

Our investment was approx. $1000 all up fwiw.

[toosahn]

I don't like to shill. But the Eth wave is long gone. The next will be Iota.

[54ny77]

part of the attraction of crypto in general is it's like fedwire for the masses. no stupid delays and float for the other guy.

[mtechnica]

I don't like to shill. But the Eth wave is long gone. The next will be Iota.

It could be way too soon to say that IMO, but I'm no expert. It's really hard to say where crypto value will go in the long term I think, I'm 50/50 on it completely bombing and being generally worthless, or the "original" cryptos becoming increasingly valuable over time.

Scenario 1. Cryptos banned or controlled by governments, because untraceable currency will almost certainly be used for money laundering and corruption...

Scenario 2, crypto is increasingly used for money laundering and corruption, is unregulated and the value continues to increase.

Not to mention it could be seen as a store of value if there is volatility in the USD / euro. Seems that Russia is actively trying to interfere with U.S. and euro economics and politics so worries of instability may be driving an increase in 'nationless' crypto value.