[Finance] The cryptocurrency (Bitcoin etc) thread

[beorhthelm]

Shaan Puri (Bebo, Twitch, has a LOT of wealth in crypto) and Sam Parr (The Hustle) are well-connected and know of the people behind it who are, by all accounts, serious tech players.

It's not something I have any great interest in, but they've covered it over the last week or two on their excellent My First Million podcast. I think Shaan put $100k into it this week.

Parr was cynical about the "no withdrawal" thing, somewhat obviously, but I think the intention is pretty clear, particularly given the Football Index collapse. You need liquidity to build first otherwise any kind of loss of confidence would trigger a run and the whole system would disintegrate.

But, yes, it's undoubtedly highly speculative but so is almost everything in the crypto arena. Get in early, cross your fingers, and hope you're on a winner.

i think sometimes even tech people in crypto space get blinded by "someone using the blockchain, must be good". its as if calling out one project would question others. this offers nothing, no use or value, just a vehicle to capture peoples crypto. its amassed $155m worth of BTC so far and i predict the account will be "hacked" at some point.

 

[sydney]

i think sometimes even tech people in crypto space get blinded by "someone using the blockchain, must be good". its as if calling out one project would question others. this offers nothing, no use or value, just a vehicle to capture peoples crypto. its amassed $155m worth of BTC so far and i predict the account will be "hacked" at some point.

well to those ITK it cant be hacked.

 

[CheeseRolls]

Isn't there a fairly high likelihood that polkadot/cardano will take over before Ethereum 2 is released?

I don't really know how to answer that.

If it were football it would a bit like;

Argue about which is the best team in the world.
Agree because we have sort of decided who the best team in the world is, everyone should support them.
Assume because of one and two above they will win every game forever.

Loads of these solutions will thrive and survive and the money to be made or lost will fluctuate.

Let me give you another scenario. If you are a Libertarian a Distributed Financial Network may look beautiful. If you are the CEO of a global mega corporation, are you going to bet the company on an open source network, under the control of a small team of techies? You might pay the likes of polkadot to provide a gateway between networks.

 

[beorhthelm]

In summary Ethereum relies on proof of work, which is limited to around 10 transactions per second.
Ethereum 2 is based on proof of stake, which will be closer to 10k transactions per second and will greatly reduce the cost per transaction.

The challenge for Ethereum is that the migration requires something like 4 major steps, which will take some time.

Other solutions can already operate at this scale see Hedera Hashgraph and at much lower costs per transaction.
Zero fee offerings are also close for example Iota Networks.

None of this means Etherium is dead in the water. If the market is smart contracts with high values, the difference between a transaction at £100 and one at 0.0001p is insignificant. If the focus is on high volume low value transactions this is critical.

currently there are so many competitors to Ethereum, none are able to make the headway to replace it even though they may be technically better. some of them are even working products, used Fantom and Avalanche recently. so ETH maintains dominance from first mover and network effect. i cant see one single platform for smart contracts, a handfull of them will be used.

 

[sydney]

Kardiachain.

 

[Tom Hark Preston Park]

SUCH a shame that the old NSC got reduced to Ground Zero in 2003. Cos the EXACT same BS was being spouted by the gullible dotcom bubble evangelists way back then. Guess what Clevor Trevers? You're just repeating history. And unless you manage to sell your bag on to some Greater Mug then your gain in real money will end up exactly the same. Never mind tho eh, only a decade or two til the next doomed speculative bubble. Timeshare on Mars anyone? Maybe diversify to Venus?

 

[beorhthelm]

SUCH a shame that the old NSC got reduced to Ground Zero in 2003. Cos the EXACT same BS was being spouted by the gullible dotcom bubble evangelists way back then. Guess what Clevor Trevers? You're just repeating history. And unless you manage to sell your bag on to some Greater Mug then your gain in real money will end up exactly the same. Never mind tho eh, only a decade or two til the next doomed speculative bubble. Timeshare on Mars anyone? Maybe diversify to Venus?

i wholeheartedly agree, made and lost a packet on dotcoms too. thing is, like the dotcoms theres a few Amazons, Googles and Qualcomms. just have to seperate from the Aol, geocities and boo.com. theres some real innovation along with false dawns. whats genuinely different this time is lack of regulation, so people make up the rules as they go and much is made up through social contacts. developers can raise millions in a week, then we get to find out if their projects are brilliant, flawed or scams.

 

[dazzer6666]

SUCH a shame that the old NSC got reduced to Ground Zero in 2003. Cos the EXACT same BS was being spouted by the gullible dotcom bubble evangelists way back then. Guess what Clevor Trevers? You're just repeating history. And unless you manage to sell your bag on to some Greater Mug then your gain in real money will end up exactly the same. Never mind tho eh, only a decade or two til the next doomed speculative bubble. Timeshare on Mars anyone? Maybe diversify to Venus?

Probably right....but still worth a punt (and it is very much a punt) with a small % (so small that losing all of it wouldn’t be an issue) of my savings IMO.........for me the key with these things usually is knowing when to get out, and not being greedy. Not a lot different to a bit of modest gambling, particularly if you can’t be arsed to do all the research (even if you can the fundamentals are far removed from traditional investing normal rules don’t really apply).

 

[Foolg]

There are some wild APY staking rates on the yield farm defi projects at the moment. I've seen 100%+. Like you say wont last, is being done for exposure and is risky as hell as an investment but if you've got a bit of dust to stick in is worth a punt. Long term though decentralized finance systems could very replace central banking for those that want to go down that route.

Sorry to be lazy - but without reading through dozens of pages, what are you suggesting is worth a punt?

Been looking at Crypto etc. for a while and happy to chuck a bit in even with all the big risks mentioned, and if it's lost in a few months time so be it.

 

[Albion Dan]

SUCH a shame that the old NSC got reduced to Ground Zero in 2003. Cos the EXACT same BS was being spouted by the gullible dotcom bubble evangelists way back then. Guess what Clevor Trevers? You're just repeating history. And unless you manage to sell your bag on to some Greater Mug then your gain in real money will end up exactly the same. Never mind tho eh, only a decade or two til the next doomed speculative bubble. Timeshare on Mars anyone? Maybe diversify to Venus?

Yep the internet of 2021 is a clear example of what a disaster the dot com bubble was. All markets rise and crash. The Crypto market crashes 80% EVERY 3-4 years, it's no revelation. If you take time to really educate yourself there is money to be made or you can just watch on the sidelines. Whichever, the tech is the future of finance, data, AI, and the internet and some of the current projects will likely be the new Google, Facebook, and Amazon.

 

[Tom Hark Preston Park]

Yep the internet of 2021 is a clear example of what a disaster the dot com bubble was. All markets rise and crash. The Crypto market crashes 80% EVERY 3-4 years, it's no revelation. If you take time to really educate yourself there is money to be made or you can just watch on the sidelines. Whichever, the tech is the future of finance, data, AI, and the internet and some of the current projects will likely be the new Google, Facebook, and Amazon.

You're pretty hot on advising folk to go and educate themselves. Go educate yourself on the history of speculative bubbles. You really think the likes of Amazon will go with any of these magic bean options? You really think you'll be able to buy a car with your magic beans when it could cost you thousands of pounds/dollars more/less depending on whether you buy it on tuesday or thursday? Mainstream Adoption is a longtime standing mantra among the buttcoin evangelists. That don't look like changing anytime soon

 

[CheeseRolls]

This is a useful visual tool for anyone even half interested to play around with

https://blocknomy.net/index.php

Where does my favourite crypto sit? What are the direct competitors?
THPP - Select index for ranking and select coin. You will see the majority of things people are talking about here are not trying to be money replacements.

 

[Albion Dan]

You're pretty hot on advising folk to go and educate themselves. Go educate yourself on the history of speculative bubbles. You really think the likes of Amazon will go with any of these magic bean options? You really think you'll be able to buy a car with your magic beans when it could cost you thousands of pounds/dollars more/less depending on whether you buy it on tuesday or thursday? Mainstream Adoption is a longtime standing mantra among the buttcoin evangelists. That don't look like changing anytime soon

I've spent ALOT of time educating myself on trading technical analysis, price analysis, and the underlying technology. I've ridden through the peaks and troughs from early 2017 to the depths of 2018, to now ($1k to $20k BTC, then gain $3k to the current $58k). I am acutely aware that the price is going to crash in the next 12 months and of the risks involved. Because of the time I have invested I am 110% certain I'll be getting out around the top and will be investing again around the bottom. You can ignore it and bang on about tulips, it's fine. You can buy a car with bitcoin today, I'm not sure I understand your issue with the price changing.

 

[Tom Hark Preston Park]

I've spent ALOT of time educating myself on trading technical analysis, price analysis, and the underlying technology. I've ridden through the peaks and troughs from early 2017 to the depths of 2018, to now ($1k to $20k BTC, then gain $3k to the current $58k). I am acutely aware that the price is going to crash in the next 12 months and of the risks involved. Because of the time I have invested I am 110% certain I'll be getting out around the top and will be investing again around the bottom. You can ignore it and bang on about tulips, it's fine. You can buy a car with bitcoin today, I'm not sure I understand your issue with the price changing.

So basically you're saying you know NOTHING about the history of speculative bubbles then? Not even the relatively recent ones?

 

[Albion Dan]

So basically you're saying you know NOTHING about the history of speculative bubbles then? Not even the relatively recent ones?

No I am saying I am acutely aware of them and I plan to use this one (which has one every 4 years) to my advantage. And if you follow the rule of not investing what you're not prepared to lose you cant lose. Tell me one financial/investment system that hasn't experienced a speculative bubble crash? The house market is currently one of the biggest speculative bubbles in history (after already popping as recently as 2008) and the FIAT currency system itself is going to explode in spectacular fashion, its the ultimate Ponzi scheme.

 

[beorhthelm]

I've spent ALOT of time educating myself on trading technical analysis, price analysis, and the underlying technology. I've ridden through the peaks and troughs from early 2017 to the depths of 2018, to now ($1k to $20k BTC, then gain $3k to the current $58k). I am acutely aware that the price is going to crash in the next 12 months and of the risks involved. Because of the time I have invested I am 110% certain I'll be getting out around the top and will be investing again around the bottom. You can ignore it and bang on about tulips, it's fine. You can buy a car with bitcoin today, I'm not sure I understand your issue with the price changing.

what if i told you that because everyone expects a dump, there will be no dump?

 

[Tom Hark Preston Park]

No I am saying I am acutely aware of them and I plan to use this one (which has one every 4 years) to my advantage. And if you follow the rule of not investing what you're not prepared to lose you cant lose. Tell me one financial/investment system that hasn't experienced a speculative bubble crash? The house market is currently one of the biggest speculative bubbles in history (after already popping as recently as 2008) and the FIAT currency system itself is going to explode in spectacular fashion, its the ultimate Ponzi scheme.

Aw, and you were ALMOST holding your own, albeit flimsily, right up til that last bit. Bless

 

[Bry Nylon]

Because of the time I have invested I am 110% certain...

I'm no investment expert but I think I may have spotted a flaw in your financial modelling...

 

[wealdgull]

In summary Ethereum relies on proof of work, which is limited to around 10 transactions per second.
Ethereum 2 is based on proof of stake, which will be closer to 10k transactions per second and will greatly reduce the cost per transaction.

The challenge for Ethereum is that the migration requires something like 4 major steps, which will take some time.

Other solutions can already operate at this scale see Hedera Hashgraph and at much lower costs per transaction.
Zero fee offerings are also close for example Iota Networks.

None of this means Etherium is dead in the water. If the market is smart contracts with high values, the difference between a transaction at £100 and one at 0.0001p is insignificant. If the focus is on high volume low value transactions this is critical.

Proof of stake doesn't by itself increase the transactions per second, it just changes the method by which finality is reached (finality is the point at which people can say "it would cost $x for the data stored at this point in the chain to be altered"; as long as x is high enough the chain can be considered immutable).

Transactions per second aren't, and never have been, the issue. The issue is what happens to the data used in the transaction, and more importantly the data stored as a result of the transaction. As the number of transactions increases the amount of data stored on the chain increases, and the effort required to fetch any piece of data increases significantly (think of the difference between fetching a book from your bookshelf and fetching a book from the British Library: both are "fetch a book" but the scale of the latter means it takes significantly longer).

The two efforts to fix this long term are rollups and layer 2. Rollups use clever tricks to reduce the size of the data in transactions, even though they do the same thing (it's basically a kind of short-hand), reducing transaction size. Layer 2 uses various forms of roots and proofs to reduce the data on the chain, storing the actual data where it doesn't need the burden and cost of having to go through the consensus mechanism. These can be combined, and the ultimate goal is to have what is considered a "stateless" blockchain where none of the data (except a single root) is stored on the chain itself, and most transaction data can be discarded after it has been processed. This will allow a blockchain to scale to tens or hundreds of thousands of transactions per second (equivalent; in reality there will be a couple of hundred rollup transactions per second).

Rollups and layer 2 are already starting to kick in on Ethereum, and will see higher adoption as people find out they can carry out fast transactions with insignificant fees. It will take a while to get there, but it's definitely on its way.

 

[Albion Dan]

Aw, and you were ALMOST holding your own, albeit flimsily, right up til that last bit. Bless

We'll see. A system that now relies on printing trillions of extra cash over and over because pretty much every country is bankrupt at the press of a computer button is unsustainable and will implode. Fiat is backed by nothing other than the computer it is generated from. A bank is allowed to create money to lend that never existed before. Ponzi.

Like I said anyway, take it or leave it if you have a strong plan and can control emotions there is life changing money to be made.