Cryptocurrencies

HODL!! I have no idea what bitcoin is going to do in the sort term, if it will continue to shoot up like crazy or if the current downturn is just the beginning of a huge crash. I do think bitcoin has a bright future ahead, though, so long term I expect it will go much higher. For example, here’s a crazy comment from 2009:

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Funny but impossible. How can it be the only one? Why should it be 100% ?
Anyway, if you keep considering Bitcoin a “payment system” you’ll be disappointed. It can’t be, it’s too slow. At least not in the way people hope. (it can be fast if it doesn’t store the transation in the blockchain ).

But take my word with a big grain of salt. I didn’t study it. (For example I have no idea how they will store the transactions once all bitcoin is mined)

I’m ok with it only being 10%. :slight_smile:

Well, I guess it depends what you’re comparing it to. It takes 3 days for a bank transaction to clear, bitcoin is certainly faster than that. Anyway, there are lots of innovations in the pipeline to speed things up. For example, the lightning network will enable sub-second transactions by moving them off the main blockchain and settling them afterwards.

The same way they’re stored now. Miners secure the blockchain by building blocks, which include user transactions. Space on the block is limited however, so users can include in their transaction a fee for the miner to motivate them to include theirs earlier. The rules of the protocol also allow miners to include a special transaction for themselves, which is the mined bitcoin. The rules also specify how big this mining reward is each time, and when it will end. Once it does, the miners will continue their work but their source of income will be exclusively transaction fees. The rationale is that while the network is small they need the extra motivation of the mining reward, but by 2140 (when the last new bitcoin is mined) the network will be large enough to be self-sufficient.

What you need to understand is that bitcoin rules are not written in stone. The rules are agreed upon by the miners. Before a block is accepted to the chain, the nodes check if the block meets the rules. This is how the rules are enforced. So theoretically, the miners could decide that there will always be bitcoins to mine. If this decision is not unanimous, some miners would keep using the old rules, and you would get two different chains, bitcoin and “bitcoin classic”.

However, the ones who eventually decide which bitcoin would survive are the bitcoin holders. If miners enforce an unpopular rule, the value of their currency will drop, because people will continue to use the old currency and sell the new one.

And coming back to the question of earning money for making transactions, already today, mining is not the only source of income for miners. They charge you to put your transaction in their mined block sooner. Just think about it: in order to make a bitcoin transaction you need to find somebody with enough computing power to guess the right number that will make their block fit in the chain, and convince them to put your transaction in that block.

Hey guys. I would actually like to purchase a few cryptocurrencies for buy and hold, just in case it’s not just a hype and really a world-changing technology. I would like a place where I could easily purchase a few currencies and then transfer it to my private wallet (not keep it on the exchange). What can you recommend? I know some guys recommended Lykke. Can anyone back it up? Will it do what I need?

I used Kraken, for just buying and transferring to your own wallet it should suffice, they just seem to be in way over their head, so I would not recommend it if you want to do a lot of trading as they are currently hopelessly overloaded. But they take sepa and did not steal my money.

8 posts were split to a new topic: Hardware Wallets for Cryptocurrencies

I’ve also both kraken and lykke and confirm that the first is currently so congested that’s almost useless and has hefty commissions the second is much better has also private wallets and no commissions. I’ve also tried coinbase which as well seems to be assaulted atm and want to give a try to poloniex because quite fair as exchange also having almost every possible coin…

I like to use Bittrex and Binance with 2FA for buying coins (kraken is slow and buggy) - but it does not matter what exchange you use - you can always withdraw to your wallets. But not all exchanges allow to transfer back into FIAT, i use kraken for that, but heard that bitstamp is way better/faster.

I you want to hodl, consider a cold storage device like ledger nano s or trezor, because wallets can be hacked too.

Binance to trade, Ledger Nano S to store, and Coinbase for deposit/withdrawal, but thinking seriously about trying Bity, Swiss based company requesting serious documents to open an account, seems more reliable than Coinbase (disable features one day on two cow of traffic -official version-).

Maybe it has been said already but transfer in Ethereum and not Bitcoin from a site to another, reducing strongly the fees.

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would be nice if you could say a few words why. The Ledger Nano S as wallet is pretty straightforward, there are only 3 options and any is good. But why Coinbase for deposit and why Binance to trade? What is Binance anyway, on their site it looks like they have their own currency. Is there no good exchange where you can do everything? Transferring coins between exchanges seems like a lot of hassle. So what, first you send dollars to coinbase, then exchange to eth, then send to binance, then exchange to, say, iota, then transfer to ledger nano?

Maybe one side question: how do exchanges fix a price? I understand they find a matching pair of buyer and seller, but in the end they need to add this to the blockchain. So you fix a price and then you wait a couple of hours to see if it went through? Are the exchanges miners themselves?

Exactly. If you’re buying, someone’s selling

Only when someone withdraws, otherwise only merely need to record the trade in their books, i.e. database, to track every client’s balance

11 posts were merged into an existing topic: MMM on cryptocurrencies

I spent some time reading posts on Boglehead regarding crypto, especially Bitcoin.

The main arguments against are:

  • It’s a no instrinsec value
  • Don’t produce income (unlike stocks)
  • For Bitcoin, it’s has failed as a mean of payment (cost and speed)
  • It’s a Ponzi scheme. People holding crypto need more people to use/buy them, so the price will increase.

The main arguments for are:

  • With more awareness and a limited supply, prices will continue to go up. (For example, Paypal sells crypto now)
  • Major banks and funds buy Bitcoin/crypto
  • Bitcoin could replace Gold (as a hedge against inflation)
  • Reduce transaction cost compared to bank

Ark-invest has published a white paper with interesting arguments and is bullish.:


Two years ago, I bought some unknown crypto which have lost value since. My opinion was Bitcoin will fail due to the speed of the transaction and high commission. I missed that it could be a replacement for Gold. Two years later, I see a lot of potential in Bitcoin and ETH, but few for other crypto.

Do you think ETH and Bitcoin will continue to be the major crypto in the future (currently around 70% of the market cap. A lot of Crypto has been launched but haven’t able to challenge these two)? Do you think it will replace gold? Any idea of the long term price/market cap?

Well, nobody knows. I am still unsure if we are not missing something huge here. What will happen to our little ETF friends VT, VWRL and so on when USD further weakens (crashes?) and everybody turns to bitcoin for protection?

So you want to protect against society collapsing (and somehow bitcoin not going down with it)?

Note that VT and friends are not tied to USD, but indeed a collapse of the US financial system would likely impact most economies. Just USD weakening shouldn’t matter (as long as it’s not a collapse, with hyperinflation, etc.), USD has weakened all the time compared to CHF without causing any issues.

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Just to add on top of what @nabalzbhf says, if USD weakens the price in USD of your shares mechanically increase. It should not matter. You are not holding USDs you are holding parts of companies that have an intrinsic value.

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And for reference, USDCHF was at 4.3 (1 USD = 4.3 CHF) in 1971 (vs. 0.9 now). If anything the past decades have been very stable compared to the historical norms.

No direct impact.
Some companies holds a lot of cash would which could be an issue, if the interest on this cash is lower than the inflation.


Data from last year.
https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet-are-sitting-on-more-than-100-billion-in-cash.html

Some companies like Microstrategy convert most of their cash into Bitcoin. Their is some rumors that other companies will do the same. For sure, now it’s easier than ever to holding Bitcoin for companies through ETFs or fund. Maybe Bitcoin is really Gold 2.0.

Out of curiosity, I’ve listed the major USD-pegged stablecoins by market cap right now:

Total: $107 billion USD :slight_smile:

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