Crypto Currency

Discussion in 'West Mall' started by AC, Mar 25, 2020.

  1. AC

    AC 2,500+ Posts

    Meet Tim Draper. One of Silicon Valley's best VC Investors. Hotmail has put him on the VC map as a great visionary and investor. Skype, Tesla, Twitter, Robinhood, Coinbase, and also Baidu – which is the world's largest holder of Artificial Intelligence IP's and made Tim the first VC to invest in the Chinese tech market in the early 2000s. He bought 30,000 Bitcoins at auction in 2014 for $650 and they are now worth $6,612 each. He predicts Bit Coin will hit $250,000 by 2023.

    I put this here because many on Hornfans are 45 and older. The world is changing. We need to look at this closer. Some of us want to retire and some of us need to catch up to retire later on. But this could help some of you and my hope is we can do a greater good in educating people about AI and Crypto Currency. It's coming. Corona Virus will be a world changing event and IMHO, that change will be more financial than anything else. Bit Coin and Crypto Currency will likely act as a catalyst for some of this change. I know these guys are in SF. But Silicon Valley comes up with a lot of market changing things. I get excited about major market shifts. Maybe it's just me?
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  2. Chop

    Chop 10,000+ Posts

    I was highly skeptical of all this crypto-currency stuff in its early years. However, if one or more cryptos (Bitcoin, ?, ?) can prove itself stable and hold (or even improve) its value in times like this, I'm about ready to get onboard.
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  3. AC

    AC 2,500+ Posts

    BTC is Bitcoin. It is THE most stable Crypto Currency. It's $6,600 range and not doing that great today. It was $5,000 about 10 days ago.
  4. Musburger1

    Musburger1 2,500+ Posts

    It’s certainly worth tracking. In the short term I suspect it will oscillate. After a strong upward move in the early part of the year, cryptos collapsed along with everything else in March. Crypto’s moves sharply upward with the rest of the market when the Federal Reserve announced unlimited QE a few days ago. So for now it seems to be correlated to inflation expectations.

    It has the potential to explode higher if faith in the dollar begins to wain. If and when that happens, we will have a lot of other things to be concerned about from food supply to societal breakdown. So keep an eye on crypto currency, but hope the time doesn’t arrive that it becomes a last resort currency. If bitcoin insures your financial solvency, that would be one less thing to worry about, but it also means anarchy likely becomes part of the environment.
  5. AC

    AC 2,500+ Posts

    Listen to the Tim Draper interview if you have time. Sorry it's long. It's more of a slow casual shift away from fiat currency. We can do that with out anarchy. The reason for this is more Dollar deflation and we are at 0% interest rate now, pretty much. But if we do go into anarchy, I always liked the Sex Pistols.
    I more think of it like the internet in the early 90's. Crazy talk that eventually, the masses buy into. Early investors retire multi millionaires. It's not about anarchy its more of a paradigm shift from fiat currency to crypto currency. No borders, no central bank.
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  6. Austin_Bill

    Austin_Bill 2,500+ Posts

    Can you still mine for bitcoin?
  7. Monahorns

    Monahorns 10,000+ Posts

    Yes. They are building server farms all over to mine for it.
  8. Dionysus

    Dionysus Idoit Admin

    This is important. Avoid It is run by a guy named Rover Ver who is promoting his own spin-off (fork) of Bitcoin, called “Bitcoin Cash” (BCH). He is taking advantage of the fact that many people are confused over the name. BCH is not Bitcoin, it is a shitcoin. Most every “crypto” in existence today is a shitcoin. Ripple and Ethereum may have some long term promise, I don’t know, maybe a couple others. If you want Bitcoin, you want BTC, not BCH.

    Do your homework before investing. I suggest self-custody with a hardware wallet rather than leaving the asset on a third-party exchange, which is a security risk. Self-custody is a different risk. Things are getting better but it is still a fairly technical exercise to self-custody, and worth it in my opinion. Move your BTC to a hardware wallet and put it in a safe place.
    If you mean with your home computer, no. Mining is done with very specialized and powerful machines (ASICs) that were built for this purpose.
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  9. AC

    AC 2,500+ Posts

    Thanks Dion^^
    Mining is a Major investment! I wouldn’t do that unless I had a lot more experience. I’m reading a book about Bit Coin now. With my new free time.
    I’m only looking at Bitcoin. The other currencies are highly speculative. Draper says most will consolidate to Bit Coin.
    • Like Like x 1
  10. Horn6721

    Horn6721 10,000+ Posts

    Dion Thanks
    I do not understand this
    But looking for opportunities.
    Just do not really get the Bitcoin things
  11. Dionysus

    Dionysus Idoit Admin

    Read The Bitcoin Standard by Saifedean Ammous. It’s an excellent intro and the first seven or so chapters are only about the history of money. It puts in perspective why better money is needed, and how Bitcoin might fill that role.
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  12. Driver 8

    Driver 8 Amor Fati

    Microsoft is working on a secure digital identity project call ION (Identity Overlay Network) that runs on top of the bitcoin blockchain. They chose to leverage the bitcoin network because of its security and decentralization which no other network can match.
  13. iatrogenic

    iatrogenic 2,500+ Posts

    Top 6 Biggest Bitcoin Hacks Ever

    On Aug. 15 2010, an unknown hacker nearly destroyed Bitcoin. The hacker generated 184.467 billion Bitcoin out of thin air in what has become known as the Value Overflow Incident.

    Satoshi Nakamoto quickly hard forked the blockchain to remove the 184.467 billion Bitcoins, which is the only thing that saved Bitcoin from dying an early death that day.

    Essentially, the code for checking Bitcoin transactions did not work if outputs were so large that they overflowed when summed, and a hacker figured this out and took advantage of it. There is supposed to be a fixed maximum supply of 21 million Bitcoin, but the hacker, in a single transaction, created 8,784 times more Bitcoins than ever should exist.

    If this hack hadn’t been rectified, Bitcoin would likely have died then and there, which would mean the entire crypto space as we know it would not exist. The price of Bitcoin would have plummeted to zero instantly once users realized that it could be minted at will. Bitcoin would have lost all of its trust and reputation.

    The second attack happened in 2014, at a time when Mt. Gox was handling almost 70% of Bitcoin transactions in the world. This time, the leaked BTC amount was humongous enough to completely sink the business of Mt. Gox.

    Soon after that, Mt. Gox halted operations and filed for bankruptcy, stating that more than 750,000 BTCs (around $350 million) were missing from the exchange.

    Sadly, investors lost their funds and no refunds were made.
  14. AC

    AC 2,500+ Posts

    Mt Gox owner was distrusted and Satoshi steered all investors away from his block chain. He was hacked and then shut down and filed bankruptcy. He was in over his head and could not manage his block chain. Could not secure it. Draper talks a lot about the Mt Gox event in his interview. BTC survived and grew in value from that. It’s proof of strength after that incident is why Tim Draper bought 30,000 Bit Coins at auction that same year. He’s made 10+ times his investment in under 6 years.
  15. AC

    AC 2,500+ Posts

    Trust Wallet is a free app and uses 12 random passwords which you write down and store. That is your personal key. You cannot lose the passwords. There are some other apps that charge $110-$120 each. You download the app on your phone and you have a much better layer of protection. Dion alluded to this yesterday.
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  16. AC

    AC 2,500+ Posts

    Mobile Bitcoin Wallets
    Bitcoin wallet applications which are installable on mobile phones are called mobile wallets. For each mobile operating system, such as iOS, Android, Windows, and Blackberry, compatible wallets are available. India’s Bitcoin space has WazirX, as the leading platforms.

    Below are the various Bitcoin mobile wallets and each mobile OS compatibilities. The one that I prefer using is TrustWallet on my Android phone. They have integrated a lot of security measures & are quite safe. At the same time, there are many more mobile wallets that you can pick based on your smartphone’s OS.
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  17. Dionysus

    Dionysus Idoit Admin

    This post underscores a couple of important things.

    1. Nascent technologies will have challenges. They survive these problems and mature, or they fail. The most recent issue mentioned was six years ago.

    2. Despite these issues bitcoin is still running, creating a new block of transactions every 10 minutes, and propagating them around the global network as it has done for 11+ years now. Most people have no idea how impressive an achievement this is.
    • Like Like x 1
  18. iatrogenic

    iatrogenic 2,500+ Posts

    Relying on a form of payment or a system of payments that could disappear at any moment is going to be difficult to sell precisely because few, if any, understand the technology. That includes those using it now, as we see from the thefts.
  19. Dionysus

    Dionysus Idoit Admin

    Only a small minority will ever really understand the bitcoin tech, in the same way that very few understand how the internet works. That’s not a problem. People don’t need to understand the tech, they need good tools (exchanges, wallets, custodial systems) that simplify the process and reduce risk. This is the maturity phase that’s happening now.

    Could bitcoin still fail at some point? Of course it could. But given the current state of global finance I think it’s a decent bet that a decentralized open source software project might be more trustworthy than politicians and bankers.
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  20. iatrogenic

    iatrogenic 2,500+ Posts

    Almost anything’s possible
  21. AC

    AC 2,500+ Posts

    IMHO, Corona Virus WILL shift the paradigm on a lot of things politically, financially, how we live our lives from hear on out. This is going into the History books. Mankind will have to learn from this. Whether we want to or not. We have no choices here. I've been an entrepreneur for over 14 years. It has NOT been easy but I have experience and have jumped off cliffs higher than this before. Dion is also an entrepreneur. These skills are handy at times like this. Imparting them to others is sometimes the best we can do. Other than a complete screw up I did two weeks ago that cost me $1,349.32 because I was distracted on vacation with family, I have faired pretty well so far. I'm going to learn anything I can about Bit Coin. We're in this together. I will impart what I find here and I hope others can benefit from it. Any investment that has already grown 10+ times in under 6 years deserves some attention! Corona Virus adds to the fuel on the fire that is BTC! So far, I think a strong case can be made that this investment can really help families looking for something to boost them financially when the rug has been pulled out. Just don't be stupid. I am NOT saying go borrow money to buy bit coin! I am starting small.

    I am reading "Blockchain Revolution" by Don and Alex Tapscott
    "This book has had an enormous impact on the evolution of blockchain in the world" Satya Nadella - CEO Microsoft Corporation
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  22. AC

    AC 2,500+ Posts

  23. iatrogenic

    iatrogenic 2,500+ Posts

    If the concern is how the money supply is manipulated by governments, why would you not be concerned that anyone can issue a crypto currency in an amount of their choosing, and "print" as much of the crypto currency as they want? Isn't that already happening?

    What is magic or correct about the arbitrary 21,000,000 bitcoin limit? How is the liquidity affected if everyone acts in the manner you described and buys Bitcoin as an investment instead of using it as a currency?

    Could the 21mm limit be increased? Who controls the limit? Are you sure?
  24. Monahorns

    Monahorns 10,000+ Posts

    I don't think that is happening today. If so the crypto-currency experts would highlight that and criticize it. They are super sensitive to "money printing". The Bitcoin creation process is designed to mimic the metal mining process in terms of how much money supply increase results.

    I don't know of any bitcoin limit, but I am no expert. There is no magical amount that should be a limit or not. At this point most people buying bitcoin as more of an investment because tax law treats it as an asset not a currency. You don't get taxed if the $s in your banking account appreciate in value. With bitcoin you do.
  25. AC

    AC 2,500+ Posts

    You have to study and understand what a block chain is. The cap is firm at 21Billion. Satoshi Nakamoto set that when he created Bit Coin. It’s not changing. BTC is never and has never been printed. It’s 100% digital. A block chain is an incypted coded message saying X is buying ___BTC. Each block of BTC is separate and your given a key which is personal to you. To buy more BTC you provide your personal key. I use Trust Wallet. They have a free iPhone app. I hide my key in a safe place. BTC is not printed and is separate from any Bank or Currency like a U.K. pound or a US Dollar. In some future date IF the printing of currency continues like it has been especially lately. BTC should (many presume) overtake Gold as a safe haven asset. It IS possible it could overtake many fiat currency’s.

    Who here thought a pandemic would sweep the globe now? Don’t answer that Mus! I’m just trying to help everyone. If there IS a run on the US Dollar, we’ll all really need investments like BTC, Gold, Silver. Just to survive it!

  26. AC

    AC 2,500+ Posts

    Correction the cap is 21,000,000 Bit Coins. I said Billion above, sorry.
    18,300,000 in circulation now.
  27. iatrogenic

    iatrogenic 2,500+ Posts

    I have done a little research. I wrote "printed" in quotations. I know it's not printed.

    You state: "In some future date IF the printing of currency continues like it has been especially lately. BTC should (many presume) overtake Gold as a safe haven asset. It IS possible it could overtake many fiat currency’s."

    What is your logic behind this claim?

    The whole Bitcoin idea is not new, but it is in a new form. Somebody had an idea to create something out of thin air and replicate the market for gold and the old "gold standard" by treating electronic bits and bytes like a commodity. Bitcoin is suddenly a "monetary commodity". They even used the term "mining" when increasing the bitcoin supply. The cost of mining gold involves expending labor resources and acquiring and running labor saving devices like dirt moving equipment. The cost of mining bitcoin involves expenses for computers and electricity.

    Both the gold and bitcoin monetary commodities' growth depends (or is limited by) how fast you can mine it as well as demand for the commodity (i.e. the demand for money). The speed at which you can mine bitcoin and actual gold, therefore, is affected by technical innovation and improvements in mining (better machines, improved ways of detecting the location of the commodity, etc.).

    We are not on the gold standard simply because of the idea that if you can arbitrarily use gold for money, and it is expensive to mine gold, you can just as easily arbitrarily assign a value to some form of exchange (say, the U.S. dollar) which does not require expensive resources to produce.

    For the same reason, we will never be subjected to a bitcoin standard, because it is very expensive to mine, and because it is arbitrarily limited in the amount made available.

    Obviously, if you are silly enough to believe this new commodity money is going to be a widely accepted medium of exchange, despite the fact that such commodity money has been tried and subsequently discarded for centuries, you will buy it. The more people believing in the mythological commodity, the higher the price due to an arbitrary limit placed on the amount available. If you are looking to buy an intangible asset as an investment, it could be successful as long as demand for an intangible "electric charge" remains strong. Otherwise, the pyramid comes crashing down and the last guys in are holding the empty bag.

    The good news is that others have already arbitrarily assigned a value to something easier to obtain and produce, which is paper/cloth printed with fancy lettering and designs. I realize the paper money is easily manipulated via government intervention, but clearly all forms of exchange have their issues.

    The question to me is, in an inflationary environment, whether buying bitcoin is better than buying a hard asset like gold or real estate, or just investing and then reinvesting in short term securities as rates rise due to inflation.
  28. Monahorns

    Monahorns 10,000+ Posts

    Gold and silver were not used as money arbitrarily. Precious metals were used as money because they were valued for uses outside of money, widely held as valuable, could be divided, and are relatively easy to transport.

    The point is that a "real" money would still have value whether or not it is money. Governments changed that so that they could manipulate things to their own benefit. We are seeing that on the news everyday today. Cap Metro is getting $104M from the Federal Government. Complete waste of time and money.

    Bitcoin is an attempt to eliminate the government's power over money. Money before wasn't created by government's. It was created by businessmen in order to make trade easier. There was competition between different money types and over time the most valuable commodities accepted over the largest geographic space won out. "We the people" didn't discard commodity money. Governments did that so they would have control over their debts. It also hasn't been for centuries. Money was at least linked to gold up until 1971. The banking system always had problems but it is certainly a mess now.
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  29. iatrogenic

    iatrogenic 2,500+ Posts

    There are other other tangible items, including other metals, that could have been chosen just as easily, so there is some "arbitrariness" to it. It is also arbitrary in the sense that various countries have more gold deposits than others. Hence, at the whim of those holding gold deposits and declaring that they declare gold to be the "standard" measure of value, they are wealthy and others are poor. You could not be more arbitrary.
    Only if people believed in the value of the "real" money, just like they believe in the value of paper money.
    I stated that commodity money has been used and discarded for centuries. Commodity money, such as sea shells, were used in the Bronze Age, so yeah, it has been around.

    Also, you can't say, without being in conflict, that people did not discard commodity money while simultaneously stating that the most valuable commodities won out over time. Obviously, the people did discard commodity money such as salt, sea shells, and bronze knives in favor of other commodities.

    Governments do manipulate markets. I just don't see how owning an electronic signal, limited in supply, is going to fix any problems.
  30. Dionysus

    Dionysus Idoit Admin

    Gold and other commodities have elasticity on price, supply, and demand. Bitcoin’s elasticity is only on price and demand because the supply is fixed, currently at 1,800 BTC produced per day. Demand (high or low) cannot change that, it’s built into the protocol.

    Also in the bitcoin protocol is a “halving” event every 4 years, or every 210,000 blocks. This is where the miner subsidy (BTC production) is cut in half. The subsidy was originally 50 BTC per block, in 2012 it halved to 25, in 2016 it went to 12.5, and in May of this year it will be 6.25, so there will be 900 BTC produced per day until 2024 when the next halving will occur. This is the predictable supply aspect.

    It’s expensive to mine gold as well, but the market takes care of that. When prices are up, miners are incentivized to produce. Same thing with bitcoin mining, and the successful miners are finding cheaper power sources to fuel their operations. I’ve heard the argument that bitcoin mining “wastes energy.” It doesn’t waste energy, it purchases electricity on an open market, like the rest of us do.

    The amount of the currency can be arbitrary as long as it is divisible enough to serve the purpose. BTC is divisible to one hundred million units (Satoshis, or “sats”) so with one hundred million sats across twenty-one million bitcoin the supply is fine.

    Edit: corrected number on the daily BTC production. It is currently 1,800 per day, not 900. It will drop to 900 in May.
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    Last edited: Apr 3, 2020

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