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  #181  
Old 09.05.2018, 11:50
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Re: Get started trading crypto currencies

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I think you misunderstand and likely read only the first sentence of that entire paragraph, FMF. I was semi-jokingly talking about a regressive age where stocks cease to exist and precious metals are once more the words currency, like in Ye Olden Days.
Stocks represent fractional ownership of business's, so unless business's disappear that won't happen, unless you can live on blockchain food
The Amsterdam stock exchange started in 1602, so stock trading is nothing new.
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  #182  
Old 09.05.2018, 12:10
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Re: Get started trading crypto currencies

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Paypal makes money. It's a business. It makes an annual revenue and cash flow. You can look at it's fundamental business values to determine what you would pay for a piece of that business, no different to any other business.

Bitcoin is a 'currency' (and a pretty useless one at that), with a price purely driven by speculation and with no intrinsic fundamental valuation.

Each to their own I guess. Good luck to you.
As someone who was mining when you could do it on graphics cards, I don't need any more luck in bitcoin. But it is still a lot of fun trading. (In my perennial startup we've developed quite a cool neural net system which has had some modest successes.)

As to this old chestnut about intrinsic value, even Buffet understood that it does have intrinsic value. He just didn't think a 'cheque processing' system was worth that much.

The intrinsic value in bitcoin is that it's an automated bank. (This is hard for people to grok because such a thing has never existed before.) We have actually discussed this extensively in past EF threads; here's a post where I talk about it. (You might also find other posts of mine there where I recommend buying it at the 300 USD level...)

I'll also stand by other comments that I've made that it's not a safe investment for the cautious investor (both because of its volatility and the care you need to take in securing the asset).
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  #183  
Old 09.05.2018, 12:21
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Re: Get started trading crypto currencies

i think there is value in automatically settling contracts, but could the banks do this anyway without using an existing cryptocurrency?

trustless model is a feature needed only for 'illegal' markets e.g. darkweb, beating currency controls or where faith in a countries own systems has gone (e.g. economic collapse in greece/argentina). while these could indeed be big markets with high value, for 'legitimate' uses, we don't need bitcoin.
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  #184  
Old 09.05.2018, 12:37
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Re: Get started trading crypto currencies

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i think there is value in automatically settling contracts, but could the banks do this anyway without using an existing cryptocurrency?

trustless model is a feature needed only for 'illegal' markets e.g. darkweb, beating currency controls or where faith in a countries own systems has gone (e.g. economic collapse in greece/argentina). while these could indeed be big markets with high value, for 'legitimate' uses, we don't need bitcoin.
Some crypto are even replacing the Swift system used by banks worlwide since the 70's (look at XRP).

There are numerous legitimate uses where crypto currencies are bringing significant improvment and changes, such as:

-Decentralisation (sure, in switzerland it's not so much a problem in fact, think the capping euro/chf, was it fair to customers? what if the cap was way worse for you, would you still feel happy about the system?)

-Speed, efficiency, cost: significantly reduced. Reducing the amount of intermediaries too. Look how a transaction in credit card for you to Australia works, you'll see how many intermediates charges services. With crypto is direct.

- Be your own bank, gives customers a incredible flexibility and control (which comes with responsabilities)

-Think market crashes, the banks/governments only guarantee a certain amount. Think Malta. Was it fair for customer? With Crypto, would have not happened.

-Again, ease of payments and low transaction fees have brought a lot for legitimate customers

-Let alone let's talk about AUDITS. How can you talk about "bitcoin is not for legitimate customers" when the entire transactions ever made by Bitcoin are immutable (can't be cheated) and seen by all, since the beginning. I wish we could see the transaction of that french Finance prime minister who frauded and hid money in a Swiss Bank so easily. Or that you could see everything happening with numerous people, I am quite sure that it won't be so easy to check Mr X account in bank Y. Yet, with the blockchain it's there for all to see and entirely transparent.

I don't have more time now, but yeah, the legitimate comment is simply entirely wrong and incorrect.
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  #185  
Old 09.05.2018, 12:39
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Re: Get started trading crypto currencies

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i think there is value in automatically settling contracts, but could the banks do this anyway without using an existing cryptocurrency?

trustless model is a feature needed only for 'illegal' markets e.g. darkweb, beating currency controls or where faith in a countries own systems has gone (e.g. economic collapse in greece/argentina). while these could indeed be big markets with high value, for 'legitimate' uses, we don't need bitcoin.
I think you could add efficiencies as an advantage of trustless since it's automated - you don't need a central trust authority or any of the usual banking infrastructure.

In my standard comparison with PayPal, you could say it's a bit cheaper (for vendors) to use bitcoin and the costs will drive very low (especially for micropayments which can't really be done with the standard bitcoin model) with the ever-expanding Lightning Network (that's basically a peer-to-peer layer over bitcoin which leverages the trustless functionality to batch payments).
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  #186  
Old 09.05.2018, 13:04
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Re: Get started trading crypto currencies

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-Think market crashes, the banks/governments only guarantee a certain amount. Think Malta. Was it fair for customer? With Crypto, would have not happened.
What do you mean with think Malta? No Maltese Bank has gone bust or needed rescuing. Some Maltese Banks will not allow you to buy Crypto, due to money laundering regs most will probably follow.
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  #187  
Old 09.05.2018, 13:24
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Re: Get started trading crypto currencies

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What do you mean with think Malta? No Maltese Bank has gone bust or needed rescuing. Some Maltese Banks will not allow you to buy Crypto, due to money laundering regs most will probably follow.
I replied while being busy with something else. Pribably got the country wrong was it cyprus and not malta?
https://www.google.ch/amp/s/www.inde...078.html%3Famp

There was something like that which occured in last 5 years.
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  #188  
Old 09.05.2018, 13:30
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Re: Get started trading crypto currencies

>Some crypto are even replacing the Swift system used by banks worlwide since the 70's (look at XRP).

While blockchain can be used by financial entities, why should they use an existing one and pay for that instead of using a clone which they control?

>Decentralisation (sure, in switzerland it's not so much a problem in fact, think the capping euro/chf, was it fair to customers? what if the cap was way worse for you, would you still feel happy about the system?)

this is more a money/currency issue, unless your proposal is to replace completely CHF with a non-central bank controlled crytocurrency

>Speed, efficiency, cost: significantly reduced. Reducing the amount of intermediaries too. Look how a transaction in credit card for you to Australia works, you'll see how many intermediates charges services. With crypto is direct.

crypto is generally slower, more expensive and uses various intermediaries that may be unreliable. though this could change with technological developments.

>Be your own bank, gives customers a incredible flexibility and control (which comes with responsabilities)

automation could be useful, but to truly be your own bank requires a banking licence and a lot of regulatory procedures that nobody is realistically going to do.

automated/API banking facilities already exist which don't require conversion into a volatile intermediate cryptocurrency.

>Think market crashes, the banks/governments only guarantee a certain amount. Think Malta. Was it fair for customer? With Crypto, would have not happened.

yes it would if your crypto was stored/loaned by a bank. if you hold your funds in cash, you would also be OK.

>Again, ease of payments and low transaction fees have brought a lot for legitimate customers

crypto payments are neither easy nor have low transaction fees.

>Let alone let's talk about AUDITS.

you can also bring in a law to publish all your bank transactions. somehow, i don't think most people see this as a positive feature.
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  #189  
Old 09.05.2018, 15:24
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Re: Get started trading crypto currencies

There are numerous articles why a "private" blockchain makes little sense. The existing banking infrastructure is a proven solution for a trust based system. No need for distributed ledger (e.g. blockchain) if you have trust in all nodes of your system.

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>Some crypto are even replacing the Swift system used by banks worlwide since the 70's (look at XRP).

While blockchain can be used by financial entities, why should they use an existing one and pay for that instead of using a clone which they control?
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  #190  
Old 09.05.2018, 16:10
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Re: Get started trading crypto currencies

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Bitcoin is a 'currency' (and a pretty useless one at that), with a price purely driven by speculation and with no intrinsic fundamental valuation.
Somewhat like the US dollar, you mean? Although dollars are printed on paper, which I guess has some intrinsic value, I'll give you that.

People who obstinately view Bitcoin as just a currency are missing the vastly bigger picture. It's been embraced as a store of value, hence my comparison to gold and my comments that gold would be virtually worthless if its value were limited simply to its practical applications outside of jewellery and other displays of wealth.
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  #191  
Old 09.05.2018, 16:14
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Re: Get started trading crypto currencies

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Stocks represent fractional ownership of business's, so unless business's disappear that won't happen, unless you can live on blockchain food
The Amsterdam stock exchange started in 1602, so stock trading is nothing new.
You're still missing Richdog's point. He's talking about a post-apocalyptic world where companies don't exist and all trade is reduced to barter (and theft), and in his vision of it, exchange for gold (although I really don't see cave-dwellers swapping their tinned sardines for gold chains).

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  #192  
Old 09.05.2018, 16:17
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Re: Get started trading crypto currencies

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i think there is value in automatically settling contracts, but could the banks do this anyway without using an existing cryptocurrency?

trustless model is a feature needed only for 'illegal' markets e.g. darkweb, beating currency controls or where faith in a countries own systems has gone (e.g. economic collapse in greece/argentina). while these could indeed be big markets with high value, for 'legitimate' uses, we don't need bitcoin.
We don't "need" Paypal, US dollars, Mastercard, or Swiss francs, either.
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  #193  
Old 09.05.2018, 16:54
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Re: Get started trading crypto currencies

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We don't "need" Paypal, US dollars, Mastercard, or Swiss francs, either.
We need food supplied in an efficient way with optimized supply chains in order to feed the 7 billion humans on earth
---> Mondelez, Kraft-Heinz, Nestle etc.

We need (as in, a basic human instinct) to improve our lives. Nowadays it's via technology
--> Apple, Microsoft, Alphabet, etc.

We need to improve medical care and pharmaceuticals to treat diseases and live longer, happier lives
--> GSK, Roche, etc.

These are the companies running the civilized world, whether their products are being traded in seashells, pounds, dollars, or whatever else we deem has value.

In an apocalyptic World of course, you just need a big gun and some body armour. I don't really like to think about that or try and prepare for that in any way.
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  #194  
Old 09.05.2018, 21:11
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Re: Get started trading crypto currencies

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Probably got the country wrong was it cyprus and not malta?
It was Cyprus. The situation is generally thought to have kicked-off bitcoin's second exponential growth phase (from under 20 to 200 USD) in early 2013. This was probably helped by the first reward halving (from 50 to 25 BTC) at the end of 2012.

Interestingly, the first 'bubble' was in June 2011 when BTC soared to the giddy heights of 30 USD (it was about a dollar before that) and there were exactly the same kind of posts (probably not on EF, but plenty on Slashdot and HN) concerning tulips and how this was going to crash to zero.

There was quite a protracted bear market after this where it slowly slid down to about 5 USD until the Cyprus thing. Mining was particularly easy during that time because a lot of people dropped out thinking it was dead.

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You're still missing Richdog's point. He's talking about a post-apocalyptic world where companies don't exist and all trade is reduced to barter (and theft), and in his vision of it, exchange for gold (although I really don't see cave-dwellers swapping their tinned sardines for gold chains).
In that situation, I'd like to make sure I had a good stash of neodymium magnets and a milligram scale given all the tungsten that exists in the world now. (As well as a fully-automatic Glock 17...)

Last edited by speakeron; 09.05.2018 at 22:20. Reason: The secrets of the alchemist.
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  #195  
Old 10.05.2018, 04:05
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Re: Get started trading crypto currencies

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These are the companies running the civilized world, whether their products are being traded in seashells, pounds, dollars, or whatever else we deem has value.
Thank you. My point, precisely. If we, or enough of us, deem Bitcoin to have value, then it has value. We don't need any one (or more) of any of the currencies in the world today; but if we decide that something has value, we can use it in trade.
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  #196  
Old 10.05.2018, 13:38
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Re: Get started trading crypto currencies

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Thank you. My point, precisely. If we, or enough of us, deem Bitcoin to have value, then it has value. We don't need any one (or more) of any of the currencies in the world today; but if we decide that something has value, we can use it in trade.
I guess it depends if you are looking at bitcoin as an investment or as a currency.

We use our currecies today because we can use them everywhere, quickly and efficiently, to buy whatever we want. Bitcoin doesn’t have this advantage. Maybe some cryptocurrency will be easy, fast and possible to use in many places one day, but it’s still just a currency.

Cash is the worst investment you can make long-term. It’s guaranteed to lose value. Gold also pretty terrible.

People are buying bitcoin today, not as a functional currency, but in the hope that they’ll sell it for more later, converting them back to an actually useful currency.
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Old 10.05.2018, 14:08
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Re: Get started trading crypto currencies

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We use our currecies today because we can use them everywhere, quickly and efficiently, to buy whatever we want.
That's not really true. If I hold the physical manifestation of a currency (say a thousand-franc note), I can't use it to buy whatever I want everywhere, quickly and efficiently (and I'm not talking about buying anything illegal here). I'd have more options if I put it into a bank (so I could transfer it overseas), but then I need additional infrastructure. Bitcoin comes automatically with that additional infrastructure.

Problem is, you're basing your view on cryptocurrencies by comparing them to 'real' currencies and then saying they're useless because you can't easily buy a coffee with them. They're much more than that.

A useful analogy is this:

currency == a car (but you need a road to drive it on)

cryptocurrency == a car that comes with its own road

If you start to think of bitcoin (and other crypto) not as a currency, but as a commodity (produced by BitcoinCorp) with many useful functions (one of which is as a currency), then it may become easier to understand.
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Old 10.05.2018, 14:45
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Re: Get started trading crypto currencies

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That's not really true. If I hold the physical manifestation of a currency (say a thousand-franc note), I can't use it to buy whatever I want everywhere, quickly and efficiently (and I'm not talking about buying anything illegal here). I'd have more options if I put it into a bank (so I could transfer it overseas), but then I need additional infrastructure. Bitcoin comes automatically with that additional infrastructure.

Problem is, you're basing your view on cryptocurrencies by comparing them to 'real' currencies and then saying they're useless because you can't easily buy a coffee with them. They're much more than that.

A useful analogy is this:

currency == a car (but you need a road to drive it on)

cryptocurrency == a car that comes with its own road

If you start to think of bitcoin (and other crypto) not as a currency, but as a commodity (produced by BitcoinCorp) with many useful functions (one of which is as a currency), then it may become easier to understand.
From my understanding, blockchain is a nice technology which can be used to verify transactions or other ‘contracts’ without the need for any central entity. That’s great.

But what does owning bitcoin give me? I mean.. when I see a list of all the cryptos that have been invented... it’s crazy. How can there possibly be a need all for these different cryptocurrencies? Also, it must be pretty easy to invent a cryptocurrency if there are so many of them.

What are the useful functions of bitcoin that you refer to?

what’s to stop Visa from using blockchain technology in their infrastructure, getting all the benefits, but without a need for bitcoin or any other existing crypto?
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Old 10.05.2018, 15:06
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Re: Get started trading crypto currencies

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From my understanding, blockchain is a nice technology which can be used to verify transactions or other ‘contracts’ without the need for any central entity. That’s great.

But what does owning bitcoin give me? I mean.. when I see a list of all the cryptos that have been invented... it’s crazy. How can there possibly be a need all for these different cryptocurrencies? Also, it must be pretty easy to invent a cryptocurrency if there are so many of them.

What are the useful functions of bitcoin that you refer to?

what’s to stop Visa from using blockchain technology in their infrastructure, getting all the benefits, but without a need for bitcoin or any other existing crypto?
The 'useful functions' are those associated with a global, immutable, and programmable database. Things like smart contracts (financial instruments, time-locked payments), public records (land registries, evidence of qualifications), voting systems.

Now, you might ask "why do I have to pay for an expensive bitcoin to get that?". Well, the expensive bitcoin is the token that gets you entry into this functionality.

Next question: "ok, the functionality is great, but there all these other much cheaper coins, why I can't use them?". The answer is "network effect". It's the same reason the Swiss Franc is more expensive than other currencies: it has useful attributes that people are willing to pay for. (In fact, the cryptocoin of the 'future' which is more likely to be providing all this extra functionality is probably Ethereum - but that ain't cheap either.)

"Why are there so many cryptocurrencies?". Same reason for all the crazy stuff in the 90s dot-com boom which peaked with pets.com. People trying to make a fast buck which will end with a shake-out and a more mature market.

"Why can't VISA use a blockchain?". They can, but a blockchain is basically a really inefficient database. We accept this inefficiency because the trustless aspect is so valuable. VISA already have a nice fast database and I presume they trust themselves.
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Old 10.05.2018, 15:11
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Re: Get started trading crypto currencies

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The 'useful functions' are those associated with a global, immutable, and programmable database. Things like smart contracts (financial instruments, time-locked payments), public records (land registries, evidence of qualifications), voting systems.

Now, you might ask "why do I have to pay for an expensive bitcoin to get that?". Well, the expensive bitcoin is the token that gets you entry into this functionality.

Next question: "ok, the functionality is great, but there all these other much cheaper coins, why I can't use them?". The answer is "network effect". It's the same reason the Swiss Franc is more expensive than other currencies: it has useful attributes that people are willing to pay for. (In fact, the cryptocoin of the 'future' which is more likely to be providing all this extra functionality is probably Ethereum - but that ain't cheap either.)

"Why are there so many cryptocurrencies?". Same reason for all the crazy stuff in the 90s dot-com boom which peaked with pets.com. People trying to make a fast buck which will end with a shake-out and a more mature market.

"Why can't VISA use a blockchain?". They can, but a blockchain is basically a really inefficient database. We accept this inefficiency because the trustless aspect is so valuable. VISA already have a nice fast database and I presume they trust themselves.
So let’s say, we expect bitcoin to not rise in value in the future. A basket of goods costing 1 bitcoin today will cost 1 bitcoin in 100 years. The speculation side of hoping to make a profit is gone. Productive assets remain the only way to truly make profit on your capital in this economy.

Why would I want to buy a bitcoin? What tangible benefit will i get from owning this thing in my account? I get ‘entry to these functionalities’ but what does that actually mean? Why do I need access to this database?
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