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Bitcoin and Crypto-currency


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2017 Nov 5, 3:36pm   106,124 views  521 comments

by BayArea   ➕follow (1)   💰tip   ignore  

#investing

Hi guys,

I'd like to start a conversation on crypto-currency, particularly Bitcoin.

What do you all think about it from an investment point of view today? I have some buddies in the finance world who are quite bullish on it and claim we are just scratching the surface. Judging by the recent performance, they may be right.

For people who are investing in Bitcoin, what are you using to invest and what recommendations do you have for a new investor?

Also, how are gains taxed compared to typical stock market gains?

I read this week that over 100,000 merchants in the USA are accepting Bitcoin today.

At the same time, digital currency does scare me a bit as it seems so abstract. Curious what PatNet thinks.

Thanks guys!

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147   anonymous   2018 Jan 19, 8:00am  

Some people seem to be overly focused on Bitcoin

The technology is Blockchain

The usage here is in crypto-currencies

The most popular and well known one, currently with the largest market cap is Bitcoin.

Personally I think Ethereum has more potential
148   anonymous   2018 Jan 19, 8:06am  

For those pontificating or investing in crypto, may I pose a thought exercise? More than half of the inflows are from Japan, but we talk USD here at Patnet. So when deciding how to valuate cryptos, we do it in USD.

What if the USD was a crypto using blockchain?

How many USD are there in circulation?
149   Onvacation   2018 Jan 19, 8:09am  

errc says

What if the USD was a crypto using blockchain?

Our economy would screech to a halt waiting for transactions to process.
150   WookieMan   2018 Jan 19, 8:55am  

errc says
For those pontificating or investing in crypto, may I pose a thought exercise? More than half of the inflows are from Japan, but we talk USD here at Patnet. So when deciding how to valuate cryptos, we do it in USD.

What if the USD was a crypto using blockchain?

How many USD are there in circulation?

I guess we should be scared when Japan shuts crypto currencies down? Or at least for those invested in it.

The USD is the USD, not sure I'm following the question. Unless the system is as seamless as the current world (currency wise) we're in, I don't really get the point of these digital currencies. I'm 35, tech savvy enough and see zero value in this stuff. Bitcoin, Ethereum, etc. I currently pull out my credit card, get 3-5% cashback on about $100k in charges a year. Pay it off monthly, rinse and repeat.

I don't need to evade taxes. I've bought weed in Colorado just like I would buy bread at a grocery store and the FBI isn't knocking my door down. Anyone that owns bitcoin will take my $5,000 in USD cash for their used car. I still haven't seen a compelling argument for the value of any crypto currency outside of those doing illicit activities or those gambling on it to make a buck.

I'll fully admit I'm rather naive on the subject. I've looked into it as much as I have time to. The reality is, nothing has presented itself worthy of investing more time into finding out more about cryptos. I've read all the comments in this thread and still have not seen a valid argument why any digital currency will overcome the USD, Yen, Euro, etc. or why they're even stick around. It's pure speculation and I'm fine with that aspect of it. Show me why any of these cryptos will have any value in 5 years and I'm all ears. I'm being serious. I'm not an echo chamber guy, but I do need to hear valid arguments and points as to why these will be there in the future for me to change my stance.
151   anonymous   2018 Jan 19, 9:19am  

The USD is the USD, not sure I'm following the question.

How transparent is the USD?

How many are in circulation?

Where did all the USD come from?

At one point in time there were zero USD. Now there’s a lot of USD, but we don’t know how many. Most people have no clue where they come from or how they found their way into the hands of those that hold them at present.

The USD is the currency of a supposed “Capitalist” country. There’s that whole transparency and Complete Information problem though, nobody seems to know OR care.

However with cryptos, these questions may begin to be asked, and personally, that alone has some value.
152   anonymous   2018 Jan 19, 10:10am  

anon_3a1a3 says
I just hope 2018 will be as awesome as 2017 in terms of crypto STOCK MARKET gains.


There, fixed.
153   anonymous   2018 Jan 19, 10:10am  

Why in the world would the US gov shut down exchanges? They are about to get massive tax inflow from crypto. It will be interesting To see how much tax rev will come from crypto for 2017 alone. So far everybody is profiting from the crypto bubble except for the panic sellers. You live and learn.
154   anonymous   2018 Jan 19, 10:10am  

“Show me why any of these cryptos will have any value in 5 years and I'm all ears”

In 5 more years??! If these insane gains will be going on for 1-2 more years I will retire early! I am hoping for one more year but crypto has exceeded my expectations every time now so who knows.
155   anonymous   2018 Jan 19, 11:45am  

anon_2653c says
anon_3a1a3 says
I just hope 2018 will be as awesome as 2017 in terms of crypto STOCK MARKET gains.


There, fixed.


I agree. My stock portfolio increased a lot too but compared to 10x-15x on some of my crypto holdings the stock market gains look rather unimportant.
156   WookieMan   2018 Jan 19, 11:46am  

Thanks for clarifying a little more.

errc says
How transparent is the USD?


I honestly don't know how to answer this. I'm not sure how any currency can be "transparent" unless I'm misinterpreting what transparency is. Not trying to cop out, but how is any crypto more transparent then the USD? Or Euro? From my research no one even knows who actually created bitcoin for example. While the dollar itself is hard to track, businesses and even other countries transact in it. Publicly traded stocks in the US transact with dollars and are required to report how many they made and how many they lost. Large funds report how much they own of certain stocks, etc. No one knows who holds how much of these digital currencies. Hell does anyone know how much is actually exchanged if you can do it P2P? I'd argue there's less transparency with crypto, there's just no government interference. I wouldn't classify that as more transparent vs. the USD.

errc says
How many are in circulation?


I honestly don't know. What does it matter though? So there's 21 million bitcoin by X year (can't remember). So what? The amount of dollars increases every second through loans on top of the currency in circulation. I guess I'd ask how would bitcoin promote growth? I don't think it would. People would just hoard it, likely very rich people. Which is cool if you got some coins when it was cheap. Outside of that, 21 million coins in a 6+ billion population world end up in the hands of the rich if governments don't shut it down. If you think you're part of that 21 million that will get a piece, go for it. I've said it before, there's money to be made. The major governments of the world will have a say in it sooner than later though. I hate governemnt, but couldn't imagine a world worth living in without it.

errc says
Where did all the USD come from?


Leverage. Loans. Created out of thin air essentially. Who cares? Every single crypto currency was created out of thin air as well. It's all made up. Who cares if some supplies are limited. These words I'm typing were all made up out of thin air at some point too. You can just read them because you learned about these made up words. The USD by all means was just made up by humans and became the biggest and most powerful currency. So people use is just like the words you read here.

errc says
The USD is the currency of a supposed “Capitalist” country. There’s that whole transparency and Complete Information problem though, nobody seems to know OR care.

However with cryptos, these questions may begin to be asked, and personally, that alone has some value.


As I mention, USD made up out of thin air. Bitcoin the same. Ethereum the same. Yen, whatever. There's no difference. While bitcoin may not have been created by a capitalist, it will be manipulated and molested by the capitalist. So what's the difference? These cryptos don't have governments behind them and any government that values their current form of currency, most likely won't allow this to go on.

This isn't a utopia where some magical currency gets created and everyone just lives in harmony, asks no questions and starts using it. People are going to lose life savings messing around in crypto. People will kill themselves. It's a dog eat dog world and these currencies aren't even a grain of sand on a beach right now, yet people are getting consumed by it.

Good luck trading it man, seriously. I don't benefit any by seeing people suffer or have losses. If you personally make a couple million off trading this stuff I'd be the first person to congratulate you. I wouldn't be eating crow necessarily cause I've always said you can make money on it. But I personally won't have any emotions of having missed out something knowing how most of the investments will actually turn out for the vast majority involved.
157   WookieMan   2018 Jan 19, 11:58am  

anon_b7985 says
Why in the world would the US gov shut down exchanges? They are about to get massive tax inflow from crypto. It will be interesting To see how much tax rev will come from crypto for 2017 alone. So far everybody is profiting from the crypto bubble except for the panic sellers. You live and learn.

The US government is going to get more from Apple in one year, just from repatriating overseas money, than the US government will see in taxes from crypto gains the next 5-10 years. That's not even including Apple's normal tax bill.

Also a good chunk of the crypto gains will go unreported and no taxes paid. While it's not an exact science, the dump of cryptos the last week here took a lot of money out of the economy as well. No taxes will be paid on that and that money could have been invested in US businesses. That's not good if you like living here if you ask me.

If it's truly anonymous, the US governemnt has no option but to shut down exchanges if they're doing their job for the people that actually pay and vote for them. While I don't want to see people get burned, I'm a US citizen and my governemnt is doing it's job protecting me by shutting down crypto currencies. It's just a matter of time IMHO.
158   Onvacation   2018 Jan 19, 12:00pm  

errc says
The USD is the currency of a supposed “Capitalist” country. There’s that whole transparency and Complete Information problem though, nobody seems to know OR care.

What is this USD you speak of?
The federal reserve note you fold in your wallet is not federal and they have no net reserves.

It has been so long that central bank currency has had any real backing that many of our younger citizens don't realize that money should be a medium of exchange, a unit of account, and a store of value. Bitcoin is not money. Many would argue that the central bank currency is not money either but you can't buy bitcoin without it.
159   anonymous   2018 Jan 19, 2:44pm  

Wookieman, besides the additional tax rev the us is receiving the crypto-economy is also creating jobs. All these new crypto companies can be seen as start-ups. The US will not shut down innovation but support it. In the near future Banks will use cryptography to settle global payments within seconds, saving a ton of money compared to the ancient SWIFT process. The lending process will change and be globalized by utilizing smart contracts on block chains. I agree there should be more regulations overseas just like here in the US (KYC - know your customer guidelines) but The block chain economy will be massive and the US will be one of the leading countries.
160   WookieMan   2018 Jan 19, 11:13pm  

anon_b7985 says
Wookieman, besides the additional tax rev the us is receiving the crypto-economy is also creating jobs. All these new crypto companies can be seen as start-ups. The US will not shut down innovation but support it. In the near future Banks will use cryptography to settle global payments within seconds, saving a ton of money compared to the ancient SWIFT process. The lending process will change and be globalized by utilizing smart contracts on block chains. I agree there should be more regulations overseas just like here in the US (KYC - know your customer guidelines) but The block chain economy will be massive and the US will be one of the leading countries.


I'd love to see some data that shows crypto currency has increased US tax revenue. I personally know multiple people with gains that have no intentions of paying taxes on those gains. That hurts every single US citizen if even only 10% don't pay taxes on their crypto gains. While I'm not overly patriotic, I really have no interest in shooting my own foot off rooting for cryptos to devalue my own countries currency. Call me crazy I guess. But hey, if you don't dig the USD maybe you'd like to live somewhere else?

Most of your comment also comes across as nonsensical or simply from a perspective of someone trying to pump something they can make a buck on. You can settle "global" payments within seconds now. I recently sent money to a person visiting Italy on my phone at lunch. Also not sure what a "smart contract" is. I also love all the block chain talk. I personally prefer cube rope, but that's just me.

Still waiting for a intelligible and coherent argument or even conversation as to why crypto currencies will continue and why they have value. I have less patience with anon users here, so pardon my ass hat tone. We're getting into deep comment numbers on this thread and I'm starting to believe that my assessment is 100% spot on based on the essential non-responses in favor of crypto. Seems like pump and dump to me.
161   WatermelonUniversity   2018 Jan 19, 11:37pm  

LOL can't be "everyone." this is a zero sum game that for someone to be a winner, someone else has to be a loser.

So far everybody is profiting from the crypto bubble except for the panic sellers. You live and learn.
162   WatermelonUniversity   2018 Jan 20, 12:13am  

anon_b7985 says
Wookieman, besides the additional tax rev the us is receiving the crypto-economy is also creating jobs. All these new crypto companies can be seen as start-ups.


as strange as this sounds, it is 100% correct. (it doesn't address the untaxable aspect of bitcoin payments and the rest of the paragraph is either completely wrong or doesn't make sense but that's another story.) crypto-currencies DO grow the economy.

which makes me wonder. if something as useless as bitcoin (in theory it can be useful - but currently it's not useful yet) can grow the economy. what else grows the economy? basically everything that makes people spend and create jobs, even though the product is 100% useless or close to useless. i can create a silicon valley start-up tomorrow selling air (that's right - air that you breathe), promote it to popularity and it will have a positive impact on GDP.
163   anonymous   2018 Jan 20, 6:10am  

which makes me wonder. if something as useless as bitcoin (in theory it can be useful - but currently it's not useful yet) can grow the economy. what else grows the economy? basically everything that makes people spend and create jobs, even though the product is 100% useless or close to useless. i can create a silicon valley start-up tomorrow selling air (that's right - air that you breathe), promote it to popularity and it will have a positive impact on GDP.

———————-

That’s already the economy though. Gas stations, fast food, hair salon and mani/pedi, shopping malls for extra costume clothing, and horseshit financial institutions to bilk labor in between.
164   WookieMan   2018 Jan 20, 6:31am  

BorderPatrol says
as strange as this sounds, it is 100% correct. (it doesn't address the untaxable aspect of bitcoin payments and the rest of the paragraph is either completely wrong or doesn't make sense but that's another story.) crypto-currencies DO grow the economy.

Not saying you're wrong, but would love to see some IRS data on it. I haven't yet. You also almost certainly will be able to claim being correct, but at what level? Let's say the market cap of Bitcoin (I know there are a ton of others) is about $200 billion at current price. Then figure that not everyone was a winner in that market cap increasing or that not everyone sold their stake and took their profits. Then there's the tax evaders. Then the fact, in this very thread, it was stated 50% of bitcoin is held outside the US. We also know there are potentially a million or so coins that could literally just be lost and there will be no gains or losses on them ever. The amount of tax this will generate for the federal government probably doesn't even come close to touching the least valuable company in the S&P 500. Then there's the utter waste of resources in mining this stuff.

So sure, the US is collecting taxes on this. Would they have collected taxes though if these same people invested in other avenues? Would other business have created the same number of jobs with the same capital allocated to them as to crypto ? My argument would be yes. So I don't see it as a job creator, "start up" or driver of economic growth at all really. Most of the money would have been invested elsewhere will much more solid long term growth and stability. Bitcoin completely crashes and it does more harm then anything good it's done on this run up.

Again, I have not seen a compelling argument or discussion yet. My guess 99.9% of everyone here is completely working in the world of the USD. Why people are interested in devaluing their own future is kind of strange to me. Crypto gains for a US citizen are going to be transferred to dollars. This alone should scare anyone arguing there's actual value in crypto. It's a trade and not an investment or store of value.
165   anonymous   2018 Jan 20, 7:33am  

Wookieman,
“I recently sent money to a person visiting Italy on my phone at lunch”
What fees did you incur and what system did you use?
166   anonymous   2018 Jan 20, 7:33am  

Investing in crypto does not hurt the dollar. Investing in it lets you participate in this fast, wealth creating economy. The good news, this is just the beginning. You can’t shut down innovation. The tech is here to stay. Why not participate and gain from it? Regarding the taxes: until recently it was not crystal clear how to treat these currencies and what is a taxable event in regards to your trades. Now, it just takes minutes to calculate your taxes by utilizing bitcoin.tax (for example). People who invest in crypto will pay their taxes. You don’t ever want to be on the IRS bad boy list.
167   WookieMan   2018 Jan 20, 9:20am  

anon_3a1a3 says
What fees did you incur and what system did you use?

Paypal. Paid 5 USD fee. Owed someone 120 EU. Did this in literally 20 seconds while driving. I now won't be able to send my kids to college due to this astronomical fee.

80-90% of people don't make individual transactions with other people, in other countries, with foreign currencies. Even people and businesses that do, I really don't think you're going to cut that middle man out. Why do we still have real estate brokers? It's the exact same principle from the fee based perspective except on an infinitely higher level as a percentage of the biggest purchase you'll ever make in your life (with real estate brokers). Pretty much EVERY country has some form of real estate broker skimming off the transfer of property. Why does anyone think you can eliminate the middle man in currencies if we can't do it with real estate?

My answer is you can't and won't. I'm not arguing that this tech wouldn't be good for most. I'd actually say I'm on the side I'm arguing against right now if that makes any sense. What I'm mainly arguing is what happens to Visa, Master Card, American Express, etc? All those jobs. What happens to the tax dollars they were paying. This is exactly why it's near impossible to cut governemnt expenses. It's extraordinarily difficult to change the status quo. Uber uprooting taxi service. Fine, that's such a small sliver of the economy. Our actual currency itself, I'm just not seeing it and therefore don't see value in these cryptos.

It's a different question now, but why do we have a 3rd party, real estate brokers still? And what makes you think it's possible to get rid of the third party in currency transactions when we can't in real estate? Isn't that ultimately how crypto can and will become successful, dump the middle man?
168   anonymous   2018 Jan 20, 10:02am  

What I'm mainly arguing is what happens to Visa, Master Card, American Express, etc? All those jobs.

They are already involved with crypto and hiring blockchain talent for the new jobs they’re creating
169   anonymous   2018 Jan 20, 11:58am  

Exactly. Companies that don’t embrace new technology (like block chain) will end up like Kodak! Oh wait, even Kodak is trying to jump on the crypto train.

https://www.google.com/amp/s/www.coindesk.com/kodak-launching-cryptocurrency-photographers/amp/
170   FortWayne   2018 Jan 20, 1:03pm  

anon_b7985 says
Exactly. Companies that don’t embrace new technology (like block chain) will end up like Kodak! Oh wait, even Kodak is trying to jump on the crypto train.

https://www.google.com/amp/s/www.coindesk.com/kodak-launching-cryptocurrency-photographers/amp/


If it provides no value, it's rather pointless to embrace it.
171   Onvacation   2018 Jan 20, 1:28pm  

FortWayne says

If it provides no value, it's rather pointless to embrace it.

Not true. It's rare. Once they mine the last one there won't be anymore.
Buy now or be priced out FOREVER!

What will you tell your grandchildren when they ask you why you condemned the family to poverty when you could have bought crypto-currency?
172   anonymous   2018 Jan 20, 2:12pm  

“If it provides no value, it's rather pointless to embrace it.“

Certainly created a lot of value for me. If something that apparently has no value makes me rich I am fine with that! Keep it going! I just bought the dip!
173   Patrick   2018 Jan 20, 2:16pm  

Crypto currencies have a lot of value for people who don't like the idea that the government can confiscate all the money in a bank account at any time.

I have a friend who found this out during a dispute with the dmv. They simply confiscated the disputed amount from his checking account, and he had never even told them about the account. They can look it up by ssn.
174   anonymous   2018 Feb 5, 4:04pm  

Keep buying those dips!
175   mell   2018 Feb 5, 5:19pm  

Patrick says
Crypto currencies have a lot of value for people who don't like the idea that the government can confiscate all the money in a bank account at any time.

I have a friend who found this out during a dispute with the dmv. They simply confiscated the disputed amount from his checking account, and he had never even told them about the account. They can look it up by ssn.


That's true and why they are here to stay, but that doesn't make them worth $19k, likely not even $5k. Hard to say where it will eventually settle.
176   RWSGFY   2018 Feb 5, 6:04pm  

mell says
Crypto currencies have a lot of value for people who don't like the idea that the government can confiscate all the money in a bank account at any time.

I have a friend who found this out during a dispute with the dmv. They simply confiscated the disputed amount from his checking account, and he had never even told them about the account. They can look it up by ssn.


That's true and why they are here to stay, but that doesn't make them worth $19k, likely not even $5k. Hard to say where it will eventually settle.


Something like Tether, i.e. crypto coin which costs exactly $1 would be ideal for these people who want to be independent from the banking system but still able to transfer money electronically.
177   lostand confused   2018 Feb 5, 7:14pm  

It is $6,000+ today -dropped 1 grand just today-wow!~
178   anonymous   2018 Feb 5, 7:19pm  

Wow, this will go down in history as one of the best buying opportunities. Big daddy Goes down to 5k or so and will end up at 60k in April!
179   RWSGFY   2018 Feb 5, 7:29pm  

anon_3a1a3 says
Wow, this will go down in history as one of the best buying opportunities. Big daddy Goes down to 5k or so and will end up at 60k in April!


Yep, all the smart cookies are liquidating their shares in stock market Ponzi scheme to be ready to go all in when BTC hits the sweet spot @ $5K.
180   lostand confused   2018 Feb 5, 7:47pm  

Satoshi_Nakamoto says
Yep, all the smart cookies are liquidating their shares in stock market Ponzi scheme to be ready to go all in when BTC hits the sweet spot @ $5K.


I wonder if anyone bought at 20k and is holding?!!
181   WookieMan   2018 Feb 5, 7:52pm  

Satoshi_Nakamoto says
BTC hits the sweet spot @ $5K.


Hits that number the bottom falls out IMHO. It's going to land in the $1,000-$2,500 range if I was betting on it, which I'm not. The amount of people losing money on the way down with this thinking it's going to bounce is staggering. The next few days should be interesting to say the least.
182   anonymous   2018 Feb 5, 10:34pm  

The long term? bitcoin is going to $0.

As some point, the electricity will cost more than the profit from mining, and then it is basically finished.
183   Patrick   2018 Feb 5, 10:35pm  

anon_eba5e says
The long term? bitcoin is going to $0.

As some point, the electricity will cost more than the profit from mining, and then it is basically finished.


There will still be profits to be made simply validating blocks in the blockchain even after all 21 million bitcoins are mined. It was planned that way from the beginning.
184   anonymous   2018 Feb 10, 6:40pm  

Sweet, another buying opportunity is coming up. It’s like have Christmas every two weeks. While I am no longer confident we will get the 4-5k range for big daddy (I would go in hard) I think we will form a double bottom at the 6k range. When that happens the big buy signal is flashing hard. This baby will bounce so hard, I call 1.5 trillion market cap by the end of the year. Now that regulators are on board the floodgates are open. Remember Blood on the street means buy buy buy!
185   anonymous   2018 Feb 11, 7:35am  

20k will look very cheap once BTC hits 100k

lostand confused says
Satoshi_Nakamoto says
Yep, all the smart cookies are liquidating their shares in stock market Ponzi scheme to be ready to go all in when BTC hits the sweet spot @ $5K.


I wonder if anyone bought at 20k and is holding?!!
186   CBOEtrader   2018 Feb 11, 7:42am  

anon_3a1a3 says
20k will look very cheap once BTC hits 100k

lostand confused says
Satoshi_Nakamoto says
Yep, all the smart cookies are liquidating their shares in stock market Ponzi scheme to be ready to go all in when BTC hits the sweet spot @ $5K.


I wonder if anyone bought at 20k and is holding?!!


What about when it hits a bazillion?

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