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Mattlikesbikes
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I've been trying to convince my wife to try crypto for years. If only I had bought BTC 6 years ago when it first was on my radar.

 

Oh well. I am in it now. Started taking the money I get in Venmo from working on other peoples wheels, or selling bike parts, to buy coin.

I'm using Coinbase as it is fairly easy. Started with $90 of ETH (one wheel build worth of payment). 

 

Y'all in it?

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16 minutes ago, Mattlikesbikes said:

I've been trying to convince my wife to try crypto for years. If only I had bought BTC 6 years ago when it first was on my radar.

 

Oh well. I am in it now. Started taking the money I get in Venmo from working on other peoples wheels, or selling bike parts, to buy coin.

I'm using Coinbase as it is fairly easy. Started with $90 of ETH (one wheel build worth of payment). 

 

Y'all in it?

Funny you should ask. I was trying to test the water yesterday to see if I could purchase these investments through my Roth IRA brokerage account, but due to the trading restrictions, I was blocked from doing so. One is a straight Ether Trust and the other is equity in a Canadian company working to standardize around Ether as an exchangeable currency, who also holds Ether as an investment. Given the potentially lucrative nature of these investments, I was hoping to shelter any gains by using my Roth IRA account. Since that didn't work, I'll probably buy some Ether direct via my PayPal account just to dabble some. I'm still of the mindset that crypto is incredibly speculative, and I have to approach it with a willingness to lose 100% of any investment I make in it. I'm willing to take my chances with a few grand, and do believe that Ether is the best bet right now given its scalability.   

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Just now, throet said:

Funny you should ask. I was trying to test the water yesterday to see if I could purchase these investments through my Roth IRA brokerage account, but due to the trading restrictions, I was blocked from doing so. One is a straight Ether Trust and the other is equity in a Canadian company working to standardize around Ether as an exchangeable currency, who also holds Ether as an investment. Given the potentially lucrative nature of these investments, I was hoping to shelter any gains by using my Roth IRA account. Since that didn't work, I'll probably buy some Ether direct via my PayPal account just to dabble some. I'm still of the mindset that crypto is incredibly speculative, and I have to approach it with a willingness to lose 100% of any investment I make in it. I'm willing to take my chances with a few grand, and do believe that Ether is the best bet right now given its scalability.   

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I know you can buy crypto direct with paypal, but I went with Coinbase instead due to the larger options of coins to buy. If you want to try coinbase, I can send you a link and we both can get a bonus.

Signing up with coinbase took me about 5 min, and another 5 min to get fully verified (DL pictures). From there another 2 min to setup paypal and trading in under 15 min.

 

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Just now, Mattlikesbikes said:

I know you can buy crypto direct with paypal, but I went with Coinbase instead due to the larger options of coins to buy. If you want to try coinbase, I can send you a link and we both can get a bonus.

Signing up with coinbase took me about 5 min, and another 5 min to get fully verified (DL pictures). From there another 2 min to setup paypal and trading in under 15 min.

 

I've already been looking at Coinbase and that is the site I've been using to monitor prices. Ether is the only coin I'm interested in right now, and I prefer to stick with PayPal given that I'm a shareholder and trust that they will be around for a long, long time. If I do decide to open a Coinbase account though, I'll let you know so that I can specify you as the referral source. 

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Yeah, I decided I don't have the time to really get into the research of all these emerging coins, so ETH was a smart and safe bet. That said, I want to get more knowledgeable on coin development so I could maybe start throwing small $ at new coins. Let it sit for years (but then I would want to know enough to tell what coins had staying power).

 

 

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My kid (27) has been trading crypto for about two years. He got into these penny ones. Buys at .02, sells at .05.  He did that until he could trade in bigger ones. He has a good bit of Ethereum now. He has taken a bit of a hit lately of course, but at one point he was up 100X  from his initial investment. 

He has told me a lot of amazing "what if" misses too. "If I had held that," or, "bought that at that it would be worth this now." I laugh at him some saying hindsight is 20/20.

I'm a bit of a gambler so I've set up a Coinbase account too. Just to play around some. But a news letter guy I read has big doubts about it. Governments have always controlled the people by controlling their money supply. They will figure out a way to control this too. Either directly or by heavy taxation somehow.

Edited by The Tip
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24 minutes ago, Mattlikesbikes said:

 start throwing small $ at new coins. Let it sit for years

Letting it sit is not required. He was visiting us and was on his laptop. He waited for the launch of a new coin and got it right then. Sold it 20 minutes later. "Dad, I just made $8,000."

But another one he bought 400,000 coins of at five cents. But he still has those because they didn't shoot up. 

It's really been a wild west kind of thing.

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2 hours ago, ATXZJ said:

Isn't all investing gambling? To me, Wall street is just a giant casino where the house always wins, and we'd be better off without it. 

 

Ha! That's what my other kid said. "The stock market is how rich people gamble." Maybe over simplified, but yes, almost all investments are gambling.

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12 hours ago, ATXZJ said:

Isn't all investing gambling? To me, Wall street is just a giant casino where the house always wins, and we'd be better off without it. 

 

Yes, but different.

The big differences between investing in the stock market and gambling on crypto is:

1. Crypto can fall to $0. Yes, $0. There are literally no fundamentals underneath these coins, they are 100% derived from market demand. Please let this sink in - bitcoin can fall to zero because the only thing propping it up is buyer's demand, not a single tangible asset. You can buy XYZ coin and if demand falls to zero, then you lose everything. You could put your money in a small cap start up with a risky business proposition you could also lose everything. But if you put it in a company with regular assets and a revenue stream it is highly unlikely that you end up with zero. If you put money in American Airlines today and they declare bankruptcy tomorrow, you will get *some* portion of your investment back. They have planes. They have equipment. They have gate leases. In liquidation you'll get some percentage of your investment back. How much? You can actually do your research, look at their financial records and determine what the bonds, preferred stock, and loans add up to. The remainder goes to common shareholders. You can't get that insight in crypto.

2. Crypto is full of scams and fraud. Here's an article from someone IN the industry about this: https://cointelegraph.com/news/new-study-says-80-percent-of-icos-conducted-in-2017-were-scams Stock markets are regulated. That is not to say that there is not stock fraud out there, but realistically it is a tiny percentage of the market.

3. Both markets are headed to a "correction." But look at the history of the stock market - slower gains, modest corrections, generally gains over time. Bitcoin has dropped 50% in the space of a couple weeks. It is wildly volatile. You can make a lot of money, you can lose a lot of money. Something like the S&P 500 will give you more gradual gains but much better protection from loss over time.

4. Bitcoin can fall to $0 with a hack. Do some research on quantum computing. You know how trivial it is for a hacker to crack a simple password? It can be done in seconds. Right now blockchain is secure, but do some research on what is called a "51% hack." Currently not achievable, easily. But with quantum computing, this becomes trivial. At that point, what is the future of bitcoin? What happens when China (who is pursuing quantum computing heavily) decides they want to own, and crush, bitcoin? You can't do that with stocks.

5. You can lose 100% of your holdings in a flash. Crypto exchanges can, and are, hacked. Your account is cleaned out. what do you get? Nothing. Several high profile exchanges have closed up shop and disappeared with all of their customers' holdings. Google "Mt GOX" to find out a little about this. Oh, but you're smart and you do not trust an exchange, you use an offline wallet, right? https://www.nytimes.com/2021/01/13/business/tens-of-billions-worth-of-bitcoin-have-been-locked-by-people-who-forgot-their-key.html And this does not count the people who had a wallet that was corrupted. Ever have a hard drive or a memory key crash and die? Electro magnetic pulses are a thing. So are sunspots. If you have ever lost any data, an MP3 song, a JPG picture, then your offline wallet could be next.

6. When you buy stock you are buying a piece of a company and you are a shareholder of record. If my brokerage goes belly up, I still own the stocks that I own. The companies I own have me listed as a shareholder and I can re-establish my claims. This is not necessarily the case with bitcoin.

7. If hackers hit my brokerage account, there are rules and regulations that can return my stock ownership to me. That is why they only go after cash. If a hacker takes your crypto, it is gone forever.

8. There is a limited pool of people willing to bet on crypto. In order to sustain huge gains, the market needs to keep attracting more and more capital. Look at 1-7 and ask yourself if John Q. Public is gonna put his money there. For the most part the answer is no. Now look at all of the new coins coming out. More of them each day. Everyone wants to "get rich quick" but there is a limited pool of money to draw from. That pool has to empty at some point. Bitcoin is not competing with stocks, bitcoin is competing with other coins. Eventually there is a "consolidation" in the crypto market and a few survive. There is probably room for 5 or so instruments in a market where there are thousands of coins. The resulting bloodbath will not be pretty. Here's the big gotcha: when consolidation happens the strong are going to lose as well. When all of the shitcoins disappear, that rattles the confidence on everything. It will be like a Ponzi scheme unwinding with only a few winners.

I could go on and on, there is so much more. (I'm a technology analyst, I track a lot of blockchain, don't even get me started on that...)

Here's the bottom line, they are both gambling. But one is like a casino where you know the odds and it is regulated, with protections in place. The other is gambling where you go to the guy standing in front of the 7-11 and bet $100 on the Chicago Bears to win the super bowl in 2022. There are crazy huge odds, probably 500 to 1. But the downside is that a.) the Bears need to win (good luck with that) and b.) you have to trust that this anonymous guy actually shows back up to the 7-11 after the Super Bowl to pay off your win.

So go ahead and gamble, just don't think of it as an investment and don't think it is the same as the stock market.

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You're buying something intangible and completely outside your control. My neighbor bought $5k of some crypto and has been trying to get his money back for over a month. He'll never see it. The Elon pump and dump is a classic example how these things go. Just when i thought it couldn't get any dumber, along came NFTs. 

Not intending to derail this into market bashing. My biggest problem with the stock market is the baked in nefariousness of it.  EX: If a company that has had issues with the services/products decides to do the right thing and take care of the people effected they will be punished in the market for doing so. It is not seen as honorable, only loss in profit. On the contrary if they do the immoral thing they are rewarded for it as long as the quarterly expectations are met. Feckless regulators are bought and sold as we found out multiple recessions ago. For something that started out as an alternative for businesses to generate capital for growth instead of going to the banks, it's just turned into a bunch of MBAs moving numbers around on a screen making money for doing nothing but causing harm.

I for one am anxiously waiting for it all to be flushed away. 

 

Edited by ATXZJ
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@ATXZJ so much of that resonates with me! my wife really handles all our finances, so she has invested in the stock market and is dabbling in crypto. all that freaks me out and I don't trust it, but we're also putting money in traditional investments. the key is to diversify.

hot take: everything about our financial system is profoundly immoral and I am complicit in it in minor ways, but ways with which I am uncomfortable nonetheless. companies that exploit workers the most win, and that's baked into the system no matter how much whitewash these companies employ to convince us otherwise. I have arguments with a friend about this frequently, but it all boils down to the fact that he believes that "morality" does not exist and I believe it does.

Edited by mack_turtle
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NFTs are a bigger issue altogether because people simply do not understand what an NFT is, they saw "an NFT sold for $60M" and they want in on that action.

In reality, NFTs are worth. Totally worthless.

An NFT is a way to certify that a digital asset is authentic AND individual. This is an issue with digital assets as they can be copied, bit for bit, and create an EXACT duplicate of the original.

That $60M sale was not an NFT, it was digital art, that was authenticated by an NFT.

Here's the easy way to think about NFTs. Let's say you're going to buy a Rembrandt for $50M. You want to know that it is real. So you get some paperwork that an expert signs, authenticating the art. The painting by itself is not as valuable. The paperwork, by itself, is worthless. The combination is worth $50M. 

All an NFT does is authenticate a digital asset. The NFT, without the asset, is worthless.

The "NFT market" is the tulip market of the 1600's.

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I believe the market has no obligation to morality, only to produce profit so I don't fault a snake for being a snake. It's doing what it's supposed to do.  We and our leaders are the ones who are obligated to see that justice is being done. That's not happening. Like @mack_turtle my wife is heavily invested in the market through her public and private retirements. She thinks crypto is insane. Aside from a pension, I've pulled every cent and put it into housing. We are gambling that the magic marketplace will determine that we'll have enough in dirt, and in her retirements to comfortably retire. 

I have absolutely zero confidence in the digital world, especially when it comes to my long term financial well being. As an old IT friend told me, "the internet lies and it never forgets". 

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1 hour ago, ATXZJ said:

I believe the market has no obligation to morality, only to produce profit so I don't fault a snake for being a snake.

but if you had a den of snakes under your house that patrol your yard, biting everyone and eating everything, you'd need find those MFers and cut off their heads at some point. the "market" is not a force of nature that can't be controlled. it's propped up by a relatively small number of people for the disproportionate benefit of an even smaller group of people, at the expense of everyone else.

Edited by mack_turtle
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That's kind of my point. I don't hate the players, I hate the game. A few bad actors using the market to scam people is one thing, but the system not only allowing but also rewarding that behavior is the issue.

That system needs to be dismantled.

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Good points by AB but for me the difference between "gambling" in the market vs crypto. If I lose 50% of my net worth in a stock market crash so did everyone else. Bad things will happen but I didn't lose relative to most things. If I lose 50% of my net worth in crypto the world moves on without me and $9 tacos from the trendy taco truck probably cost $10 now because some influencer from Cali posted about it.

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5 hours ago, ATXZJ said:

I believe the market has no obligation to morality, only to produce profit so I don't fault a snake for being a snake.

Yup, and the market is made of corporations. 

Look up fiduciary in the dictionary. It uses "company" as an example of a fiduciary responsibility. 

"the company has a fiduciary duty to shareholders"

A corporations ONLY responsibility is to make profit for the shareholders. And when the board of directors says something like, "let's start donating five cents of every unit we sell to feeding African children," they are only doing that to project a better image to their client base. To sell more. To make more profit. That is what a corporation does.

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