Cryptocurrency Investing
 

Hi All ;

My Sweet has decided she wants to try this, I know bupkis about it any thing I should be concerned about ? .

TIA,

I keep on looking at cryptocurrencies periodically. It is probably just me. I cannot make any real sense of it. I started out thinking of it as a pyramid scheme. Then a ponzi scheme. Now I do not know what to call them. A religious type cult type thing where you have to believe?

All I do know is there is an estimated five times the amount of money flowing into the stock market and crypto as usual.I can understand this with safe vehicles paying almost nothing.

Unforunatly I also believe margin accounts have exposed a lot of people with this free and easy debt loading available. They are borowing the initial margin amounts even.

At the same time I cannot state your sweety may not make some money.I have no ideal of how to estimate the risk factor. What I do suspect and is of some concern.Is they are making too many things like working for a living appear to be a joke. At this time.

You get something that appeals to peoples greed enough and it always flies. Till it crashes. If your sweety cannot spend the money she has now in her probable remaining lifetime. Why engage risk that you no longer have the time to recover from? If it does not work out?

Finding something safe to protect or retain the value of what money you have is hard enough.If we as a couple had enough years left we would be changing a lot of things. For what we feel is to come.

We just do not have the amount of needed time left. Most older people are too well grounded to accept paying 60K a share for basically a number a computor generates. If we are wrong will create an unbelievable situation in time.

For example the high stock market prices right now are a result. Not of real economic performance. Just too many dollars out there chasing the available stocks.

The banks here are even backed up dealing with establishing new investment accounts currently. For their direct investing subsiduaries.

The specific thing that concerns me is that there is no middle ground with cryptocurrencies. You are either a believer or not.

Personally would invest in index funds like from Vanguard if you want to invest. The broad market is always going to go up over time. Just depends what your horizon is. You only hear from the people that made money not lost.

I have invested in Crypto. I have a little under $4k invested in Crypto and so far I am up well over 300% over all. I invested in BTC, ETH and DOGE, most of it is in BTC.

Best I can suggest is do not bet more than you are willing to see go up in smoke. I do not do the day trade, or buy/sell. I bought some and I sit on it. I have had my BTC since 2018. I take that back...Ms Mash wanted to sell a bit to recoup our principle ... sold off a bit but then I convinced her to reinvest so here we are.

I use Coinbase for buying and selling BTC and ETH, Robinhood for DOGE.

First of all, there's no such thing as bitcoin investing. It's always going to be speculation. I heap digital coinage with a bunch of other things that can't work, but persist. The way bumble bees don't have the aerodynamics for flight, but still manage to defy gravity.

The purpose of bitcoin is nefarious: to undermine central bank "monopolies" on currency production. Or maybe to undermine current payment systems like paypal or credit card. Or maybe to make a boatload of money for the initial creators. Pick one, each has its share of truth, and nothing about it is pretty.

There are a few things that it isn't. The first is a reliable currency. The idea underpinning e-coins is that solving a very complicated algorithm can be considered "value". The bitcoin algorithm can produce a large number of unique solutions. Because a great deal of computer power is required to develop each solution, and because each solution is a very long, unique number, it can be thought of in the same way we think of gold or silver...something which is very, very hard to obtain and to which we ascribe value (yes, ascribe, gold and silver have no more intrinsic worth than paper.)

The amount of computing power required to mine each bitcoin increases as more coins are mined. In fact, this activity now requires so much computer power that it consumes enormous amounts of electricity. The last estimate I saw was that 100 terrawatts of electricity is consumed annually in bitcoin mining, contributing more to global warming than several whole countries.

Finally, the number of bitcoin is mathematically limited to 21 million.If you think of this as money, its buying power increases over time, because demand grows and supply is constrained. So as a currency, it's deflationary by design. Not only deflationary, but exponentially more deflationary as the cost of mining increases. Deflation works well for savers: the longer you hold the currency, the more it will be worth. But only someone desperate or extremely stupid would actually spend bitcoin, because it will rapidly gain value as long as more rubes show up to participate. You can't think of this as money, because you really can't afford to spend it. The original creator, who has wisely remained anonymous, made billions. Why this wasn't immediately shut down as the Ponzi scheme that it is, I don't know.

So where do you keep a bitcoin? You store it in an account called a "wallet", which is kept anonymous and private by the use of advanced encryption technology. The other part of this is blockchain, which is a completely separate concept. Blockchain is a sort of data base which is used to maintain a public ledger used to record all wallets and coins. It has the unique characteristic that it can be public, because the wallets are protected by encryption. And it's shared, because a novel mechanism allows the database to be simultaneously maintained by any number of 'exchanges". Anyone with money or bitcoin can build an exchange, and the activity is funded by a form of foreign exchange...as people convert their native currencies too or from bitcoin, the exchange charges a fee or a spread.

And that's the simple view of how it works. My own experience with it hasn't been good. I've followed it almost from the beginning, and at first I was sure that it would be shut down by regulators or would simply fail from lack of interest. When neither happened, I reasoned that latching on to exponential growth for a period of time could be profitable. So I set aside a sum of money to invest. At the time, the largest bitcoin exchange in the world was an organization called "Mt Gox". I started a wallet, and prepared to exchange some serious money for bitcoin. But before I could hit that button, Mt Gox went belly up. There was a lot of mystery surrounding the failure. Something like a billion dollars in bitcoin went missing (which is theoretically impossible), and remains missing to this day. I may have narrowly missed making multiple millions, but I also narrowly missed being defrauded. I was extremely lucky to have avoided that loss, and I consider it a life lesson.

What are the goals of the digital coin community? Still to replace, or rather to destroy, central banks. And as the recent Gamestop kerfuffle has revealed to anyone who cares to really understand, a new goal is to replace the securities clearing houses. I hope that never happens. If it does, then bitcoin will become the neutron star of the entire world financial system, drawing in every last dime of legitimate money before flaming out in a super nova. So as a goal for humanity, it's comparable to colonizing Mars:if you get there, your spectacular achievement will be rewarded by life in an airless desert, bombarded by space debris and cosmic rays, and finally dying alone in a cosmic dead end. But that's just my humble opinion.

My thoughts exactly. If I can't figure out the potential catalysts, headwinds, and tailwinds that can affect price action, it's just not for me.

Given most are at all time highs at the moment, it does not seem like the right time to dip your toes in but who knows. I trade on the markets regularly(stocks/options/futures) and I would say before dropping a penny in, make sure you have a thesis that you've researched and believe in as to why the crypto you are planning to buy will go up and have an exit plan on when you will take profits or cut losses. Otherwise there's a high chance you will buy high and panic sell low.

Useful Thoughts
 

....Because they mirror my own .

I never trusted bitcoin from the jump because it's an obvious pyramid scheme (I don't see they difference between ponzi and pyramid schemes) so this cryptocurrency thing seems the same to me .

I won't touch it but S.W.M.B.O. says she wants to do it so I asked because I'm sure she's going to put up some $ no matter what I say .

I've done pretty well in stocks, there's very little chance of $ vanishing there and it's pretty easy to figure out .

THANK YOU for the considered replies ! .

I never heard of how it turned out for the guy who forgot his password and stood to lose 200mil in crypto junk. My guess was that was just a bunch of whooie. If he could not access his account how could he prove he had them in the first place?

Do not "invest" if you do not understand it. There are also a lot of folks who spread misinformation for their own profit, be skeptical of anything you read claiming big returns. So unless you are willing to lose the money you put into it, I would discourage investment. If you want to have fun, go for it.

I created and ran multiple machine learning trader bots a few years back and did okay until the market flooded with casual traders. You are still trading against a ton of bots, I just never had enough time to update mine (if I had been earlier and made enough to make it worthwhile, I would have). I still have a good chunk of that in a wallet. Its funny to think back and realize I would casually trade millions of doge back and forth because it was practically worthless.

Huh? Its an encrypted vault. There is no back up, not other way of getting into the vault without the password. Roughly 20% of the 'mined' BTC has been irretrievably lost due to lost passwords.

https://www.nytimes.com/2021/01/13/business/tens-of-billions-worth-of-bitcoin-have-been-locked-by-people-who-forgot-their-key.html#:~:text=the%20main%20story-,Tens%20of%20billions%20worth%20of%20Bitcoin%20have%20been,people%20who%20forgot%20their%20key.&text =Of%20the%20existing%2018.5%20million,the%20cryptocurrency%20data%20firm%20Chainalysis.

There is nothing more to the story, if he happens to find the password, that might make the news, should he not find it, the story does not change so there is nothing else to write.

But the returns are real. I am in for about $3500 and I am up $9500 in the period of a bit over a yr. I would not bet the farm and I am only in for what I am comfortable losing but the gains, should I cash in, are most definitely real. As of right now, my $100 in DOGE is worth $767.95 in less than 3 months.

Oh for sure there is money to be made, but "invest" is not how I would look at it. Way to volatile for that. Fwiw I am 27x my initial investment I made a few years back. It is also just as easy to lose these days, simply need to be comfortable with that risk.

Whew .

I'll tell her, who knows what she'll do .

Can you order a Pizza tonight and pay with your "coins" and tomorrow see a balance of $9480?

Nope and I cannot pay with my stock investments either. Stop being so obtuse.

Stock investments were never claimed to be a new currency. Stop being so FUC, never mind I will leave it at that so I don't get banned again.

BTC can be cashed in at ATM's and used as currency at some locations. Same with some other crypto. Crypto is new to the scene. Give it some time and stop being so dense.

So you take your "BTC" to your ATM drop it in and it spits out $58,000.00 cash, you go home home order a pizza and pay cash. Sounds like fun to me.

Yes, that is how it works.
https://coinsource.net/can-i-withdraw-cash-from-a-bitcoin-atm/

Did you ever hear of a debit card?

It’s very very funny you mentioned pizza, May 22 is Bitcoin Pizza Day. It’s a funny story but in short, in 2018 someone paid for two large Pappa Johns pizzas with 10,000 bitcoins, worth about $25 at the time.

"Fools and their money soon go separate ways".

In this case you are calling someone a fool for not being able to predict the future. He’s been interviewed a number of times and has no regrets. At the time Bitcoin was almost worthless and he traded them for 2 pizzas. Are you not familiar with how markets work?

Topic Drift
 

But at least it included PIZZA ! :P .

Seriously. What is wrong with you?

Do you know how math works? Your post said he bought 2 pizzas in exchange for something that a market value of a quarter of a million dollars. In case you need it explained further $250,000.000. Now let me know how you think markets work pal, because that seems foolish to me. Or are you using DM as a math tutor?

Seriously, whats right with you?

Gold has been the currency since before Biblical times. We should revert to that instead of fake monies and virtual coins.

This answers the question. You do not understand how markets work. Furthermore, the current market value of 10,000 bitcoins is over 570 million. Use a calculator next time or hit up that math tutor.

Do you know how reading works? He said at the time of the pizza purchase they were almost worthless, not a quarter million.

Seriously, WTF is wrong with you?

Man, you just keep lowering and lowering that bar. Normally I would refuse to think its possible to be this dense, but you never cease to amaze.

Gold's value is a social construction just like bitcoin. Maybe we could go back to the barter system - would lower the tax bill too although technically you must claim that too. Or salt.

Even the IRS wants to know about this:

https://www.upi.com/Top_News/US/2021/05/05/cour-authorizes-Internal-Revenue-Service-to-issue-John-Doe-Summons-on-Kraken-cryptocurrency-exchange/4011620265947/

:D

Guys, _PLEASE_ !
 

Let's remember I began this thread for a reason not to give you endless things to bicker about .

Are you new here? We can bicker about boiling water.:D

Yes but hijacking my thread isn't nice, there's another forum for that express purpose .

A closed mind gathers nothing useful .

One lil mention of the IRS and the guy gets all antsy :D

Speaking of the IRS, if you do decide to i buy crypto, there is an app/site called "cointracker" that helps you determine your tax liability. It will track your purchases/sales by First in first out (FIFO) for the IRS. Makes the math very easy.

For some strange and unknowable reason that doesn't work with my gold coins :D

The IRS & Paranoia
 

You're looking at the wrong person ."One lil mention of the IRS and the guy gets all antsy:D"

I have zero love for the IRS but I'm not stupid having lived in 3rd world places that didn't have taxes .

Taxes are the price you pay to live in civilization .

I pay my taxes unlike the 1%'ers who rarely pay even 1/2 of what the rest of us do .

I don't get any $ back so those who are getting SSI, unemployment and so on, you're most welcome ~ I'm glad you're not out in the street .

This thread has nothing to do with taxes if SWMBO goes forward with this and makes $ and has to pay income tax, she'll pay it without complaint .

Same as any true American citizen .

It is worth the mention though, if you are just doing a single trade in and out, easy. If you are taking money in and out USD regularly, it gets heavy (not complicated though) really quick with a bunch of forms. I get your aim with the thread, but it is not necessarily a simple subject. Liken it to traditional investments -- "my SO wants to get into stocks" would be somewhat analogous. Banter aside, I think there are some very good points made in here:

- the market is volatile. You can get big profits or get big zeros.
- you DO need to declare the income if you want to stay on the right side of the law, cap gains. Assuming you sell back into USD. You want to track that.
- The days of DOGE being 1/1000th of a penny are over. You can still make money, but you wont be thousands times over on the main coins, generally speaking
- Everyone is trying to make a buck, all over the world. Do not believe everything (anything?) you read before research. Do not buy into hype.
- blockchain, NFT, and crypto ARE here and will continue in the future. How that manifests...??????? no idea.

All honest advice Nate, it is exciting to watch and be a part of such a big shift.

Got a link that shows when bitcoin was worth 0.0025/ea genius?

https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp

https://cdn.someecards.com/someecard...oubt-ea454.png

Just an idea, before you make a fool of yourself, perhaps try to look stuff up. This is not rocket science and for someone like yourself, who is so good with numbers, this should not be so hard to figure out .... genius.

Looking stuff up takes seconds. Who has time for that?

This thing will crash. Badly!

Seems to be more and more every day.

It’s really astonishing what he is saying, maybe he is using “new” math.

I don't doubt this. The thing is, we can't really call the crypto-craze a bubble because no one knows what it's inflated with. As I previously posted, nobody can say what metrics are used to predict future performance. Pure speculation IMHO.

Again ,
 

Thank you all who are tying to school me .

So far SWMBO isn't mentioning it so maybe I've dodged a bullet .