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  #201  
Old 10.05.2018, 16:11
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Re: Get started trading crypto currencies

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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?
The rational in this case would be that it's cheaper (or faster, or more convenient or just because of its network effects) to use the bitcoin database than its 'meatspace' equivalent.

One example that's happening now is in Africa, where a lot of people don't have access to 'conventional' bank accounts (but, of course, everyone has a mobile phone) and use bitcoin (and other electronic transfer systems). They would still use bitcoin even if it weren't increasing in value.
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  #202  
Old 10.05.2018, 16:19
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Re: Get started trading crypto currencies

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The rational in this case would be that it's cheaper (or faster, or more convenient or just because of its network effects) to use the bitcoin database than its 'meatspace' equivalent.

One example that's happening now is in Africa, where a lot of people don't have access to 'conventional' bank accounts (but, of course, everyone has a mobile phone) and use bitcoin (and other electronic transfer systems). They would still use bitcoin even if it weren't increasing in value.
I can use my credit card to buy anything I want, pretty much wherever I am, that instant. I don’t see how bitcoin could be any more convenient. Then there’s apple pay, twint, etc... they all work in multiple currencies. I understand it’s also more expensive with bitcoin as fees are incurred with each transaction.

If I want a better Forex rate, I can use one of many new Fintechs to do that transaction cheaply (e.g. Transfer wise). I suppose a benefit of bitcoin is the borderless effect, but for this to be a benefit, it would have to be much much less volatile than it is today. Plus this benefit is very limited these days with forex transactions becoming so cheap.

I have access to a conventional bank account. It’s good that people of countries without this access (but with phones) are able to get access to a payment system, it’ll boost their economy and make their lives better no doubt. Is the only function of bitcoin to act as a payment system in countries where a large number of citizens don’t have bank accounts, then? I wonder how much of the price of bitcoin is due to this function, rather than speculators?
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  #203  
Old 10.05.2018, 16:34
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Re: Get started trading crypto currencies

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I can use my credit card to buy anything I want, pretty much wherever I am, that instant. I don’t see how bitcoin could be any more convenient. Then there’s apple pay, twint, etc... they all work in multiple currencies. I understand it’s also more expensive as fees are incurred with each transaction.

If I want a better Forex rate, I can use one of many new Fintechs to do that transaction cheaply (e.g. Transfer wise). I suppose a benefit of bitcoin is the borderless effect, but for this to be a benefit, it would have to be much much less volatile than it is today. Plus this benefit is very limited these days with forex transactions becoming so cheap.
There's a layer on top of bitcoin called the Lightning Network (Ethereum has a similar thing) which uses smart contracts (bitcoin eating its own dogfood...) to provider sub-penny fees and vastly greater scalability (which is, in itself, a big problem with current crypto implementations because of the limited speed of a byzantine-consensus database). As to these new fintechs providing forex, some do actually use bitcoin under the hood. (I've been working with a startup which does exactly that.) Volatility is usually handled with the whip-it-in-whip-it-out-and-wipe-it paradigm. (Same as if you buy an ounce of gold from one of the many companies that will sell it to you for bitcoins.)

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I have access to a conventional bank account. It’s good that people of countries without this access (but with phones) are able to get access to a payment system, it’ll boost their economy and make their lives better no doubt. Is the only function of bitcoin to act as a payment system in countries where a large number of citizens don’t have bank accounts, then? I wonder how much of the price of bitcoin is due to this function, rather than speculators?
The price comes from a combination of things - speculation is certainly a big part of that. Crypto is finding its value in the marketplace and we're still in the 'pre-shakeout' phase. Whatever happens, though, I expect the handful of cryptos that survive to be in the multi-hundred billion cap. (As, I've said before, I functionally compare crypto to useful tech companies in terms of valuation and nobody's given me a better paradigm.)
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  #204  
Old 10.05.2018, 16:44
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Re: Get started trading crypto currencies

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There's a layer on top of bitcoin called the Lightning Network (Ethereum has a similar thing) which uses smart contracts (bitcoin eating its own dogfood...) to provider sub-penny fees and vastly greater scalability (which is, in itself, a big problem with current crypto implementations because of the limited speed of a byzantine-consensus database). As to these new fintechs providing forex, some do actually use bitcoin under the hood. (I've been working with a startup which does exactly that.) Volatility is usually handled with the whip-it-in-whip-it-out-and-wipe-it paradigm. (Same as if you buy an ounce of gold from one of the many companies that will sell it to you for bitcoins.)



The price comes from a combination of things - speculation is certainly a big part of that. Crypto is finding its value in the marketplace and we're still in the 'pre-shakeout' phase. Whatever happens, though, I expect the handful of cryptos that survive to be in the multi-hundred billion cap. (As, I've said before, I functionally compare crypto to useful tech companies in terms of valuation and nobody's given me a better paradigm.)
Thanks for the explanation. I understand a bit more how blockchain / bitcoin has some function now.

I don’t see it as a worthy asset class though. I don’t see the appeal of owning it.
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  #205  
Old 10.05.2018, 16:56
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Re: Get started trading crypto currencies

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Thanks for the explanation. I understand a bit more how blockchain / bitcoin has some function now.

I don’t see it as a worthy asset class though. I don’t see the appeal of owning it.
You stance is eminently sensible. When people ask me whether they should buy bitcoin as an investment vehicle, I generally advise them not to. (Although a small amount won't do much harm if they fancy a flutter). The big gains in the main cryptos are probably over anyway and the shark-infested sea of small and new cryptos is going to be a bit of a time-sucker to research.
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  #206  
Old 10.05.2018, 17:03
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Re: Get started trading crypto currencies

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You stance is eminently sensible. When people ask me whether they should buy bitcoin as an investment vehicle, I generally advise them not to. (Although a small amount won't do much harm if they fancy a flutter). The big gains in the main cryptos are probably over anyway and the shark-infested sea of small and new cryptos is going to be a bit of a time-sucker to research.
I can see how blockchain can be revolutionary and no doubt it will be used by companies to improve processes, security and efficiency.

From my side, I would just rather invest in those businesses (maybe!) rather than in the cryptocurrencies.
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  #207  
Old 06.07.2018, 15:06
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Re: Get started trading crypto currencies

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Surely it's time to watch this again, given the sweet irony that the boom in the darlings of the Austrian School, cryptocoins, is basically a result of quantitative easing (which couldn't be more Keynesian if it tried):


(I'm a Keynesian man, myself - fire up the helicopters)
Did you ever read Keynes report on the best hotels in Egypt? The one he most highly recommended was one where the service wasn't much, but in his judgement the selection of young boys was out of this world.

Caution calling yourself a Keynesian, you might be misunderstood.
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Old 19.07.2018, 08:01
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Re: Get started trading crypto currencies

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Thank you for this write up. 2 questions:

- where do you trade XRP and Monero? They are not available on Coinbase.

- is it possible to do a stop/limit trade directly at Coinbase? From what I heard, you need to enter it directly at GDAX exchange, which should use same credentials as Coinbase (but then it doesn't make sense to me why Coinbase doesn't support it directly).
#1 XRP and XMR are tradable on Kraken.

#2 On Kraken, it is possible to buy but also trade some cryptos using stop/limit margin accounts and flexible leverage.
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  #209  
Old 27.07.2018, 14:48
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Re: Get started trading crypto currencies

Slowly and steadily, Bitcoin and altcoins are getting attention from more investors all around the world. Well, Binance offers the mobile app and probably the fastest growing exchange. If you need to pick only one, this is the best and #1 in 2018.

You can follow Cryptonewstrends for the most recent and refreshed cryptocurrency news about the world's most popular virtual coins.
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  #210  
Old 28.07.2018, 08:16
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Re: Get started trading crypto currencies

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Caution calling yourself a Keynesian, you might be misunderstood.
Only to an idiot.
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Old 07.09.2018, 18:06
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Re: Get started trading crypto currencies

Great guide, thanks for taking the time to write it
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  #212  
Old 19.11.2018, 21:09
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Re: Get started trading crypto currencies

Couple of months & no comments, $4990 after another 11% fall today. 75% fall from peak less than a year ago.
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  #213  
Old 19.11.2018, 21:35
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Re: Get started trading crypto currencies

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Couple of months & no comments, $4990 after another 11% fall today. 75% fall from peak less than a year ago.
A lot of people probably lost a hell of a lot of money during the peak of the Bitcoin hype train. The silence likely reflects that.
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  #214  
Old 19.11.2018, 23:11
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Re: Get started trading crypto currencies

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A lot of people probably lost a hell of a lot of money during the peak of the Bitcoin hype train. The silence likely reflects that.
By definition, nobody lost any money during the peak. Those who bought at the peak have made a paper loss. No actual loss unless they sell—just like equities.
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Old 19.11.2018, 23:13
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Re: Get started trading crypto currencies

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By definition, nobody lost any money during the peak. Those who bought at the peak have made a paper loss. No actual loss unless they sell—just like equities.
By the same thinking they never made any money on the run up unless they sold.
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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.
Bigger picture
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Old 20.11.2018, 14:49
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Re: Get started trading crypto currencies

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Couple of months & no comments, $4990 after another 11% fall today. 75% fall from peak less than a year ago.
I for one am just totally shocked :




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By definition, nobody lost any money during the peak. Those who bought at the peak have made a paper loss. No actual loss unless they sell—just like equities.
Yeah nice...…..

They lost money though.

They must be scrambling to buy now though?! The same thing but a 75% discount...it must be a great buy!!! oh wait...
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Old 22.11.2018, 00:43
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Re: Get started trading crypto currencies

22,000 unconfirmed transactions........I guess the price of electricity makes mining a waste of time.
https://www.blockchain.com/btc/unconfirmed-transactions
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  #218  
Old 22.11.2018, 01:12
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Re: Get started trading crypto currencies

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By the same thinking they never made any money on the run up unless they sold.
Obviously. I would have thought you'd know that, since you embrace trading in equities.

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Bigger picture
Yes, the bigger picture. I see you're still kicking yourself for not buying Bitcoin five years ago. Or even 18 months ago.

Do you approach every investment with such a short-term view? I guess that explains why you don't own your own island.
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  #219  
Old 22.11.2018, 05:36
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Re: Get started trading crypto currencies

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Obviously. I would have thought you'd know that, since you embrace trading in equities.


Yes, the bigger picture. I see you're still kicking yourself for not buying Bitcoin five years ago. Or even 18 months ago.

Do you approach every investment with such a short-term view? I guess that explains why you don't own your own island.
I value to Bid Market value, so don't share your view.

Not kicking myself, I don't invest is assets with zero intrinsic value.

As an Island would have a Bid Market value of Zero almost all the time I would not invest in one.
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  #220  
Old 22.11.2018, 09:23
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Re: Get started trading crypto currencies

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Couple of months & no comments, $4990 after another 11% fall today. 75% fall from peak less than a year ago.
Bought at 108, sold most at 17-18k. It's all good.
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