OT Bitcoin and quick wealth

[mistermo]

Originally Posted by tuxbailey

I missed it long ago that I don't really think about the what ifs. I even sold my graphic card a few years ago for more than its original MSRP during the shortage because of the BTC mining craze.

I just don't have enough disposable income to gamble and feel that it is hard to not look at this as a game of musical chairs.

Also it sucks that one can't buy a decent graphic cards because people keep buying them for mining.

I have much more faith on Vanguard's index fund. And just started to open a second account to buy some more for my daughter's college fund in addition to her 529.

Lot's in your post. I don't understand crypto. I put a little in Doge, upon the urging of a friend, and let's say it's worked out well. I don't view this as investing, rather gambling. A statistics class takes all the fun out of Vegas. I've been, but give myself an entertainment allowance of say, $100. I may see it rise to $2000 before it crashes to zero. I have never been smart enough to cash out on the way up, only after my $100 is gone.

Crypto may be the same. I've done the same with Doge and am way up, but haven't made a cent yet, since I haven't cashed out. Like Vegas, I may ride it back to zero. It's entertainment and fun to watch and play along.

OTOH, my 20yr old nephew thinks this is 'investing'. His $50 entry is now worth over $1500. At his age, he was 7 when the 2008 crash occurred.

My gamble was more about fun and to incent me to learn more about crypto. With skin in the game, I'm paying more attention. As an Economics major with a solid background in Finance and Accounting, I can't see the value, except as an alternate to currency. Admittedly, I don't understand it, and am trying to learn. It seems to me that the crypto winner will be the one that has the broadest acceptance and can be replaces US$ as the global currency. That's a loooong way off. I can't see it being BTC. DOGE, maybe given the built in inflation.

When DOGE hit $.07, my bro-in-law said he'd missed the opportunity. Now that DOGE is .55-.65 range, he was dead wrong. If you have a limited income, invest $25. For that $25, you'll start paying attention and learn lots. If you went to Vegas, you'd find a way to justify gambling $25.

[Louis]

Originally Posted by mistermo

I'm sure I could google it, but in layman's terms, what is it?

I assume it means this (going on memory here):

Depending on how you calculate it, "average return" over time can be skewed high because when you use companies that survive over extended periods of time you end up dropping out poorly performing companies that go bankrupt.

(or something close to that)

[mistermo]

Originally Posted by benb

Very important to consider whether the supply of any of these are capped if thinking short/long term.

The whole thing with bitcoin is the supply is capped, making mining become exponentially harder over time and ensuring no new coins can be created. Others like Doge don't have a cap and can go into infinite inflation over time.

I actually think DOGE, having built in inflation (not exactly infinite), unlike BTC, gives DOGE an advantage leading to more widespread adoption.

The simple definition of inflation is "too much money chasing too few goods". This sounds like BTC model and won't be sustainable. The market will reject it. DOGE, OTOH, built increasing supply into it's algorithm and can withstand more communal interest.

....but I'm still trying to figure all this out.

[MattTuck]

Originally Posted by benb

Very important to consider whether the supply of any of these are capped if thinking short/long term.

The whole thing with bitcoin is the supply is capped, making mining become exponentially harder over time and ensuring no new coins can be created. .

Not that this is the place to discuss the nuances of Bitcoin... I think you are conflating 2 separate ideas. Mining difficulty (basically how many leading zeros your block hash needs to have to get credit for solving the next block.) Is determined by aggregate hashing power of Bitcoin miners, and is calculated so that blocks are expected about every 10 minutes.

The reward for solving a block is decreasing, basically cut in half every so many blocks. So the growth in supply , as you note, is slowing and will stop at 21 million bitcoins. So, the financial reward (measured in btc) is and always has been falling. That said, in dollar terms I think the reward is still substantial. And, miners also receive transaction fees, so even if there is no reward for solving a block, miners could still make money, in theory.

Anyway, there is a distinction between mining difficulty and profitability, though electricity price and hashes per kWh, and price of Bitcoin are all related.

[54ny77]

when bitcoin gets maxed out, we just might see its intrinsic value as an exchange medium. until then, i am convinced it's a glossy ponzi scheme.

was at a bar the other night and a 20-something aquiantance of a buddy i was with was talking animatedly about how he made 5 figures in crypto trading. i asked him if he understood the blockchain and could explain it (which i am legitimately interested in from a technical standpoint, as secured transactions done inside of it are increasing slowly but steadily in my industry). might as well have asked for the ingredients list in a bottle of tide detergent....he hadn't a clue.

Originally Posted by mistermo

Lot's in your post. I don't understand crypto. I put a little in Doge, upon the urging of a friend, and let's say it's worked out well. I don't view this as investing, rather gambling. A statistics class takes all the fun out of Vegas. I've been, but give myself an entertainment allowance of say, $100. I may see it rise to $2000 before it crashes to zero. I have never been smart enough to cash out on the way up, only after my $100 is gone.

Crypto may be the same. I've done the same with Doge and am way up, but haven't made a cent yet, since I haven't cashed out. Like Vegas, I may ride it back to zero. It's entertainment and fun to watch and play along.

OTOH, my 20yr old nephew thinks this is 'investing'. His $50 entry is now worth over $1500. At his age, he was 7 when the 2008 crash occurred.

My gamble was more about fun and to incent me to learn more about crypto. With skin in the game, I'm paying more attention. As an Economics major with a solid background in Finance and Accounting, I can't see the value, except as an alternate to currency. Admittedly, I don't understand it, and am trying to learn. It seems to me that the crypto winner will be the one that has the broadest acceptance and can be replaces US$ as the global currency. That's a loooong way off. I can't see it being BTC. DOGE, maybe given the built in inflation.

When DOGE hit $.07, my bro-in-law said he'd missed the opportunity. Now that DOGE is .55-.65 range, he was dead wrong. If you have a limited income, invest $25. For that $25, you'll start paying attention and learn lots. If you went to Vegas, you'd find a way to justify gambling $25.

[R3awak3n]

crypto is crazy right now and apparently a lot used some of their stimulus check and invested (which in a way I am not mad at, maybe better than spending on something stupid if you already paid your bills). I do have some money in it, very small amount I out in but I put barely any and it is up a lot, I wish I had put more in it back then but I really don't like crypto or believe it in, I just had FOMO lol. I do think its not going anywhere but it is super inflated right now and will likely come down substantially. The technology is actually really good, specially ETH, BTC is not great and only the biggest because was the first to make it to the masses. It has however lost a good amount of market as of late.

And as far as new wealth, I know my buddy just sold his million dollar condo in brooklyn to a crypto currency kid. Bought it outright, paid way over ask no questions asked. I do think a lot of crypto investors are a bit smarter than the typical lottery owner that looses all his/her money.

[happycampyer]

Originally Posted by peanutgallery

It's a one in billion sort of thing, pretty sure it is all BS. If someone says that they got rich off of it, be suspicious. But encourage them to elaborate. Makes for a good tale

But I've never been to a Tony Robbins seminar either. If someone brings it up, laugh. If you want something, go get it, don't wait around for random electrons. 8 figure payout...pffffft

I know someone who was a very early adopter of bitcoin and has several thousand bitcoins. His original cost is more than a stimulus check, but a drop in the bucket in the grand scheme of things. If he sold them all, his tax bill alone would be in the high 8 figures.

[BobbyJones]

You guys talk about crypto "investing" like its a thing. There's nothing to learn.

The 17 year old Tesla kid? Luck.
The million dollar condo kid? Luck

It's a gamble based on something they read somewhere on the internet, nothing more. Way much more of a gamble than most equites.

It is important to note however, that Casinos are real businesses and the Kardashians are now real celebrities.

[.RJ]

Originally Posted by BobbyJones

You guys talk about crypto "investing" like its a thing. There's nothing to learn.

The 17 year old Tesla kid? Luck.
The million dollar condo kid? Luck

Originally Posted by 54ny77

when bitcoin gets maxed out, we just might see its intrinsic value as an exchange medium. until then, i am convinced it's a glossy ponzi scheme.

Originally Posted by Llewellyn

You might as well go to the casino.

Originally Posted by peanutgallery

It's a one in billion sort of thing, pretty sure it is all BS. If someone says that they got rich off of it, be suspicious. But encourage them to elaborate. Makes for a good tale

Not surprising to see these opinions in the land of the downtube shifter.

[54ny77]

That was actually quite funny!

Eh well some of us work in financial markets and have lived thru various crises and crashes, so our perspective is colored by that experience.

Regardless, it will be interesting to see how crypto evolves. And more interestingly, the tech behind it.

Originally Posted by .RJ

Not surprising to see these opinions in the land of the downtube shifter.

[commandcomm]

I don’t see it as quick wealth. It takes time. I own Doge and Safemoon and a few others. I put a few hundred in it. If it works out great. If it al crashes, then on well, I won’t miss the $500.

Bitcoin took a long time to get where it was at. Years ago Bitcoin was considered worthless. .

Any kind of investing in single stocks, bonds, or anything else (crypto) should be with money you are willing to loose.

Last year if one purchased $1,000 in doge when it was $0.003. That $1,000 is now worth about $180,000 compared to the dollar

I recently bought Safemoon at $0.000006. In a few years (even 10 years) if it makes it to even $0.01, that was an outstanding investment.

[YoKev]

Send it to the moon Lord Elon

[.RJ]

Originally Posted by 54ny77

That was actually quite funny!

Eh well some of us work in financial markets and have lived thru various crises and crashes, so our perspective is colored by that experience.

Yeah for sure. Its a new thing with a lot of risk and the markets are strange right now in a lot of ways. It'll be interesting to see how it plays out - I put in some $$ in Doge at $.05, I'd be riding high on the hog if I put in or mined it at $.005 but I wasnt paying much attention to crypto until recently and I've tried to learn a little bit. There will be real value in this in the long run but by the time its a stable investment vehicle like index funds the big money will already be made.

[mistermo]

I heard an interesting piece explaining that expats in the US are using crypto as a safe, effective and far less costly way of transferring funds/wages to their families at home in their native countries. Current international money transfer methods are far costlier (fees) and far more complicated. Crypto makes it easier and cheaper, even eliminating banks (and Western Union) from the process. This made LOTS of sense to me.

[mistermo]

Originally Posted by commandcomm

I recently bought Safemoon at $0.000006. In a few years (even 10 years) if it makes it to even $0.01, that was an outstanding investment.

What did you see in Safemoon that you liked?