Bitcoin/cryptocurrency thread

[Detournement]

8 minutes ago, DiegoDiego said:

Bitcoin's more valuable than the entire Alphabet company, let alone YouTube.
 

Yes because if Alphabet started doing wash trading with fake money people would be jailed.

 

[gaz5]

Surely the difference this time is that the amount of fraudulent unbacked stable coins has went from around $1 billion in 2018 to $100 billion now. Any event which leads to a substantial sell off will cause Tether and probably multiple exchanges to go under.
 

Allegedly [emoji6]

Listen, I have concerns with Tether as we've discussed before, but at this stage they are only marginally more concerning to me than the devaluing of Fiat currency by ongoing QE and rising inflation.

But as I said above, thinking it'll be different this time is a fast track to rektsville IMO.

My charts tell me this cycle, thus far, has been identical to the last 2 in all major milestones. So that's what I'm planned for.

Could be wrong, obviously, but for me the Risk:Reward is well within my tolerance levels.

That said, again as I've said before, I'm not betting the farm. Crypto is only a part of my overall portfolio.

[welshbairn]

My last point is that punters like @gaz5 are spending hours a day keeping track of the markets, and he probably knows what he's talking about given that I barely understand a word he says.  Matched betting worked for people prepared to put the hours in, be disciplined, and got out before the profits dwindled. My impression is that crypto is the same, if you know what you're doing, prepared to put the time in, and don't get too greedy, there is probably profit to be made. If you're not and think buying a few coin shares or pics of penguins will get you rich, then you'll likely make @iron mike python a few bob but there's no guarantee for yourself, and you could lose the lot.

Edited November 5, 2021 by welshbairn

[gaz5]

My last point is that punters like[mention=24104]gaz5[/mention] are spending hours a day keeping track of the markets, and he probably knows what he's talking about given that I barely understand a work he says. [emoji14] Matched betting worked for people prepared to put the hours in, be disciplined, and got out before the profits dwindled. My impression is that crypto is the same, if you know what you're doing, prepared to put the time in, and don't get too greedy, there is probably profit to be made. If you're not and think buying a few coin shares or pics of penguins will get you rich, then you'll likely make [mention=5939]iron mike python[/mention] a few bob but there's no guarantee for yourself, and you could lose the lot.

I hope I get out ok and I'm definitely putting in the work, but that's because I'm genuinely interested in both the tech and markets in general.

What you describe though really applies to any market, in terms of the actors. People throwing money in for a quick buck rarely make out well.

In terms of not understanding, apologies, I have been immersed in this for 11 months now.

Heres a few pictures of my BTC analysis if it helps. Picture a thousand words and all that. [emoji846]

[/url]

[Detournement]

2 minutes ago, welshbairn said:

My last point is that punters like @gaz5 are spending hours a day keeping track of the markets, and he probably knows what he's talking about given that I barely understand a word he says.  Matched betting worked for people prepared to put the hours in, be disciplined, and got out before the profits dwindled. My impression is that crypto is the same, if you know what you're doing, prepared to put the time in, and don't get too greedy, there is probably profit to be made. If you're not and think buying a few coin shares or pics of penguins will get you rich, then you'll likely make @iron mike python a few bob but there's no guarantee for yourself, and you could lose the lot.

You don't need to spend any great amount of time to discover that the price of BTC and all other major coins is controlled by a criminal conspiracy involving the owners of Tether and Bitfinex.

The main positive for people like Gaz is that the US government don't seem to have any desire to stop the Ponzi so it could run for a while.

[DiegoDiego]

In fairness, everyone involved in Crypto knows that's how the cycle works. It's a 4 year cycle based around the halvings with a large mid cycle correction among the other corrections.

That's how it's played out so far but you can link recent crashes to actual events, the ICO boom and defi summer. If there's no sea change in the state of play will a similar crash happen? Of course NFTs are a huge development and I don't think it's outrageous to suggest 99% of current NFTs will be worth zero ten years from now. A large correction in 2022Q1 isn't a bad shout at all.

However, if you believe that blockchain will become the dominant form of computing, running everything from finance and land rights to social media and elections, then the boom-bust cycle will surely cease. As the technology becomes more widely adopted the volatility will decrease and the magnitude of these corrections will be smaller.

[welshbairn]

3 minutes ago, DiegoDiego said:

However, if you believe that blockchain will become the dominant form of computing, running everything from finance and land rights to social media and elections, then the boom-bust cycle will surely cease. As the technology becomes more widely adopted the volatility will decrease and the magnitude of these corrections will be smaller.

What's to stop blockchain tech being adopted by firms with nothing to do with current coins?

[gaz5]

That's how it's played out so far but you can link recent crashes to actual events, the ICO boom and defi summer. If there's no sea change in the state of play will a similar crash happen? Of course NFTs are a huge development and I don't think it's outrageous to suggest 99% of current NFTs will be worth zero ten years from now. A large correction in 2022Q1 isn't a bad shout at all.

However, if you believe that blockchain will become the dominant form of computing, running everything from finance and land rights to social media and elections, then the boom-bust cycle will surely cease. As the technology becomes more widely adopted the volatility will decrease and the magnitude of these corrections will be smaller.

Well, Im a technicals guy, so it's my belief that a lot of people like to link external events to price action, but the reality (for me anyway) is that is just humans looking for a rational explanation that makes sense to them.

The price action in most of not all of those instances you talk about (the dips this cycle) was already heading a direction before events unfolded. They were a convenient "oh that's what caused it".

I've spoken to a lot of people who were around in 2017 and 2013 as part of my research. They all say the same thing: "During those cycles people were convinced it would be different because their greed drove them to want more, it wasn't, they held through the multi year bear market".

This time will be no different IMO. When we get to the euphoric market phase and my top indicators trigger, I'll be selling into demand (the God candles) because that's the least risk and the most likely bubble peak where greed has taken over.

That's when bubbles pop.

[DiegoDiego]

What's to stop blockchain tech being adopted by firms with nothing to do with current coins?

Nothing. And it absolutely will be. It's happening every day.

[gaz5]

What's to stop blockchain tech being adopted by firms with nothing to do with current coins?

Now you're thinking. [emoji6]

This is exactly what's happening and why it's the future.

Crypto is a misnomer. The projects I buy aren't currencies, they are completely different implementations of Blockchain where the native token funds the utility and that's where it's value is driven from. They are implementations of Blockchain to solve real world problems.

My portfolio for example includes:

- Cross border Settlement
- Asset Management & Logistics
- Decentralised streaming media
- Decentralised Finance
- Decentralised Telecommunications & Mobile
- Blockchain as a Service
- Identity & Access Management
- Proof of Stream Marketing

As well as a few of the layer 1 networks these services are built on.

[welshbairn]

6 minutes ago, gaz5 said:

Now you're thinking.

This is exactly what's happening and why it's the future.

Crypto is a misnomer. The projects I buy aren't currencies, they are completely different implementations of Blockchain where the native token funds the utility and that's where it's value is driven from. They are implementations of Blockchain to solve real world problems.

My portfolio for example includes:

- Cross border Settlement
- Asset Management & Logistics
- Decentralised streaming media
- Decentralised Finance
- Decentralised Telecommunications & Mobile
- Blockchain as a Service
- Identity & Access Management
- Proof of Stream Marketing

As well as a few of the layer 1 networks these services are built on.

So is that any different from buying shares in firms exploiting the technology in these areas?

[gaz5]

So is that any different from buying shares in firms exploiting the technology in these areas?

Yes, because share price isn't driven by utility.

Let's just as an example create a fictional crypto called "P&B" which we float on the S&P500 as "P&B" share ticker. In order to fuel the network we have a native token $PNB.

The share price will be determined based on a number of things, financials, fundamentals etc. that you'd expect from a traditional instrument.

But the crypto price of $PNB is driven by utility on the network (because these tokens generally pay the network fees for using the network).

If you have great products and investors and a great balance sheet, the price of P&B shares might go up, but if no one is using the network then there's no demand for the native coin so it's price is flat or down as the equity value goes up.

Now the opposite, share price is flagging (for whatever reason) but the network is being more heavily used, meaning there's a demand for $PNB to pay the network fees. As the fees are burned and there's a fixed supply, the $PNB token is deflationary, meaning the more the network is used, the more demand there is for the token to pay the fees, the more that gets burned, the less supply is available.

People talk a lot about where the price of crypto is driven from because they think of it like a share.

It's not. The price is very basic supply and demand and utility in the long term will eventually smooth the market out.

At the moment, we have these bubbles because we're still early days and it's a speculative market. Utility hasn't yet taken over the demand side of things.

But it will, over time, as we move from the "boom" phase of this market that we're in just now to the BAU phase.

Very similar trajectory to the internet boom IMO.

[welshbairn]

2 minutes ago, gaz5 said:

Yes, because share price isn't driven by utility.

Let's just as an example create a fictional crypto called "P&B" which we float on the S&P500 as "P&B" share ticker. In order to fuel the network we have a native token $PNB.

The share price will be determined based on a number of things, financials, fundamentals etc. that you'd expect from a traditional instrument.

But the crypto price of $PNB is driven by utility on the network (because these tokens generally pay the network fees for using the network).

If you have great products and investors and a great balance sheet, the price of P&B shares might go up, but if no one is using the network then there's no demand for the native coin so it's price is flat or down as the equity value goes up.

Now the opposite, share price is flagging (for whatever reason) but the network is being more heavily used, meaning there's a demand for $PNB to pay the network fees. As the fees are burned and there's a fixed supply, the $PNB token is deflationary, meaning the more the network is used, the more demand there is for the token to pay the fees, the more that gets burned, the less supply is available.

People talk a lot about where the price of crypto is driven from because they think of it like a share.

It's not. The price is very basic supply and demand and utility in the long term will eventually smooth the market out.

At the moment, we have these bubbles because we're still early days and it's a speculative market. Utility hasn't yet taken over the demand side of things.

But it will, over time, as we move from the "boom" phase of this market that we're in just now to the BAU phase.

Very similar trajectory to the internet boom IMO.

Given that the internet is there for everyone (so far) and the existing bitchain networks are just piggybacking on it, what's to stop the legacy players with all their customers and clients building their own bitchain networks, making the existing ones redundant? 

[gaz5]

Given that the internet is there for everyone (so far) and the existing bitchain networks are just piggybacking on it, what's to stop the legacy players with all their customers and clients building their own bitchain networks, making the existing ones redundant? 

Absolutely nothing. And they will, eventually, if they're not already working on it while shouting "Crypto bad" to buy themselves time.

Its no different to Samsung creating a different type of phone to Apple to Huawei etc.

There's already a lot of competition in the layer 1 space in crypto, with different networks competing for market share (Ethereum, Cardano, Polkadot, Polygon, Quant etc.)

But that's a good thing and perpetuates the goal for the greatest amount decentralisation.

We don't want one big company, or government or billionaire being able to control/dictate.

[DeeTillEhDeh]

I hope I get out ok and I'm definitely putting in the work, but that's because I'm genuinely interested in both the tech and markets in general.

What you describe though really applies to any market, in terms of the actors. People throwing money in for a quick buck rarely make out well.

In terms of not understanding, apologies, I have been immersed in this for 11 months now.

Heres a few pictures of my BTC analysis if it helps. Picture a thousand words and all that. [emoji846]

[/url]

I think Welshy is right here - if you genuinely know what you are doing then the risk is a lot less - good luck if that's how you want to invest - not for me - but each to their own.

[DeeTillEhDeh]

Now you're thinking. [emoji6]

This is exactly what's happening and why it's the future.

Crypto is a misnomer. The projects I buy aren't currencies, they are completely different implementations of Blockchain where the native token funds the utility and that's where it's value is driven from. They are implementations of Blockchain to solve real world problems.

My portfolio for example includes:

- Cross border Settlement
- Asset Management & Logistics
- Decentralised streaming media
- Decentralised Finance
- Decentralised Telecommunications & Mobile
- Blockchain as a Service
- Identity & Access Management
- Proof of Stream Marketing

As well as a few of the layer 1 networks these services are built on.

It's one if the reasons why Bitcoin will eventually burst.

You are not investing in crypto but a solution to a problem.

[iron mike python]

5 hours ago, welshbairn said:

A wee lesson on what determines the valuation would be handy for us fools.

Bitcoin's valuation is due to it being a provably scarce asset. 21 million Bitcoin will only ever exist. No middleman is required for this. If you keep your private key safe and have internet you can access your coins from any part of the world and no one can deny you this. This has value for many people in the world who have never had access to banking facilities.

Ethereum/ Binance Smart Chain/ Solana - Are Smart Contract platforms. Applications can run on them, and tokens can be created on these networks to represent the value of other protocols/currencies/artwork/real world assets.  No middleman is required for this. Ethereum was originally described as a "world computer" which gives you an idea of how it is used. As it stands daily people are paying $72 million daily to use this computation platform Ethereum. 

There is so much more detail to go into and I really had to simplify it above but hopefully it helps trigger a few thoughts about how these assets could be valued.

[gaz5]

It's one if the reasons why Bitcoin will eventually burst.

You are not investing in crypto but a solution to a problem.

Yeah, I think Bitcoin has 1, maybe 2 cycles left as the dominant force in the market. I'm not a BTC maxie by any means.

It is the grandad, the asset that will be looked back on in 30 years as the one that initiated a paradigm shift in the way we look at finance.

But ultimately, it's the Betamax or Netscape Navigator of its generation IMO.

It'll be superceded by better tech.

[DeeTillEhDeh]

Yeah, I think Bitcoin has 1, maybe 2 cycles left as the dominant force in the market. I'm not a BTC maxie by any means.

It is the grandad, the asset that will be looked back on in 30 years as the one that initiated a paradigm shift in the way we look at finance.

But ultimately, it's the Betamax or Netscape Navigator of its generation IMO.

It'll be superceded by better tech.

As I said before - it's no different from any commodity - financial futures were the go to 20-25:years ago - this is just an adaptation of the same principle. If you know what you are doing good luck - I just think there may be too many who don't understand it who invest thinking they're making a fast buck and don't have the nerve for the fluctuations.

Out of interest - how easy is it to convert crypto to hard currency?

[iron mike python]

1 minute ago, DeeTillEhDeh said:

As I said before - it's no different from any commodity - financial futures were the go to 20-25:years ago - this is just an adaptation of the same principle. If you know what you are doing good luck - I just think there may be too many who don't understand it who invest thinking their making a fast buck and don't have the nerve for the fluctuations.

Out of interest - how easy is it to convert crypto to hard currency?

Most of the big exchanges have deals with Visa these days where you can 'pay' with the currency using a card. It actually converts your crypto to the local currency at the time of transaction. The company will usually take a % to do this.

You can convert large amounts on exchanges, but you need to make sure that your bank will accept it if you try to send it to your bank account. Some banks make it hard, because they fear their business model is threatened.

So it is straight forward.