Real stocks have the real value of the company assets and profitability that justifies their price.
Bitcoin value is based purely on the “perception” of value.
Anyone own any Bitcoin here?
- Thread starter musclefan21
- Start date
Bitcoin value is based purely on the “perception” of value.
Yeah, but it is the point that you win some, you lose some that I was making. People win and lose in crypto the same as people do in normal stocks. The value of crypto is not there like real stocks are as you say because real stocks represent a tangible company behind it, but most, or a lot of cryptos now serve a specific function, so they have that.
For some reason Facebook is worth billions even though most of us dont see anything really tangible around the primary idea of it yet we value it. The same can go for whatever crypto hits a key function and market. You are investing in that idea or function basically and betting that it will fill an important void at some point.
Facebook has tangible assets in marketing. It's an incredibly powerful marketing tool that allows businesses to very precisely market products rather than the buckshot approach traditional marketing is.
As far as bitcoin, it's not going anywhere soon but it's not going to spike again. Bitcoin needs normal people to behind insanely profitable again and that ship has sailed. Too much volatility and to much fear will prevent the general public from investing in mass again. Right now it's being held up by a small percentage hoping to win the lottery and that's just not healthy.
Day trade it, buy back in on the dips. Any main crypto really, its just volatile enough, where you can get your money out before it collapses. Buy back in on the dip and enjoy the climb again. Fees are typically low enough to remain profitable with a lot of buying/selling if using GDAX or Coinbase Pro as they call it now. It's really good, take the time to watch some videos understanding candlesticks. Switch coinbase pro to 1m/5m/15m candlesticks and have some fun playing a market.
I'd stay away from altcoins, only pursue the main ones (bitcoin, eth, litecoin) with a lot of market volume, or else you will burst with the bubble.
I suggest keeping a running % limit, on what you are willing to lose. Be strict in knowing when to fold. For example, I'm only willing to lose 5%, then get the **** out at -5%. Every fold is a good fold.
If a big hit continues, your sitting pretty with cash, ready to buy back in. Cash it out every day to protect your gains, crazy shit can happen as China wakes up and the world reacts while your sleeping.
It goes on a 2% run 5 times in a day, you catch it every time, your up 10% minus fees.
Could always stick it in a good more traditional robo-adviser, and get steady gains. Crypto though is to volatile to bet on the long game. You can grind it and make money though, a lot of keeping an eye on a graph.
I'd stay away from altcoins, only pursue the main ones (bitcoin, eth, litecoin) with a lot of market volume, or else you will burst with the bubble.
I suggest keeping a running % limit, on what you are willing to lose. Be strict in knowing when to fold. For example, I'm only willing to lose 5%, then get the **** out at -5%. Every fold is a good fold.
If a big hit continues, your sitting pretty with cash, ready to buy back in. Cash it out every day to protect your gains, crazy shit can happen as China wakes up and the world reacts while your sleeping.
It goes on a 2% run 5 times in a day, you catch it every time, your up 10% minus fees.
Could always stick it in a good more traditional robo-adviser, and get steady gains. Crypto though is to volatile to bet on the long game. You can grind it and make money though, a lot of keeping an eye on a graph.
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Tangible in marketing, but marketing is still something that is based off nothing tangible. You are just promoting things that are tangible. I agree with you fully in that it is something worth investing in because marketing is an established trade. All Im saying is that there is a lot of tech on the horizon and some of it is very different than what we are used to seeing. Im not saying you are all wrong but just that something valuable might come from this, especially since so many publically traded companies are trying to utilize the technology.
I dont even know if it will even be traded like it is when it hits its final iteration that takes it even more mainstream, but I do think it will find a place. What is happening a lot right now is that these individuals are creating a crypto that large companies are becoming interested in for various projects so when you invest in them you reap the dividends of whether they take off or not. Say I put a $1000 in Ethereum at like $100/share. Ethereum has no tangible value but I believe it will take off at some point in time. Eventually a manufacturer like Ford comes along and says "Hey, we want to utilize Ethereum's crypto-coding to be the basis for our new p2p communication system that we expect will be adopted industry wide". That would be a pretty tangible development that would make that particular crypto more valuable and worth something; it's essentially just like a highly secure computer program at that point which plenty of companies have been highly valued doing. With Ford's adoption Ethereum may jump to $2000/share and so on because it's future look promising to be widespead at that point. Only difference and problem with that example is that Ford is developing their own crypto because it probably isn't that hard for them to develop in-house.
Just so we are clear, when we say Bitcoin are we talking about the specific Bitcoin or crypto-currency in general? I personally dont think Bitcoin is worth much as its technology has been surpassed greatly by other cryptos, like Ethereum and Litecoin, but I know people often refer to crypticurrencies as just Bitcoin, so I want to be clear on that. Bitcoin is irrelevant imo.
Tell that to all the traders that jumped off buildings / bridges the past 100 years. There will be winners and losers in stocks and cryptos.
I have quite a few cryptos. But it is a gamble. My mindset is I already lost it all as Mark Cuban stated. I for sure won't sell any I have if the price is not right. I would rather hold on to it even if it means it goes down to zero than sell now and see it go to much higher (or to the moon lol!). It was easy for panic to set in when the prices crashed in 2018. But I was not going to convert to dollars at that point - hell no! Just hold on to it and see where it goes. The same thing has happened in the stock market before. And sometimes holding on to specific stocks ends up being a useless endeavor when the stock's value turn to zero. Same could happen to many alt coins or bitcoin. It could be worth zero. Or it could stay as is or go up by a lot and crash again.
We'll see where it goes but fiat currencies are all doomed eventually. Things are getting more and more expensive and a million dollars today is not what it was 10 - 20 years ago.
Who's going to process the block chain for Ford and confirm transactions? If they use all their own computers then it is not decentralized like Bitcoin, Ethereum and Monero etc. and it is going to require a big investment in equipment and electrical costs. That means Ford becomes like all the other banks with their servers processing transactions. Many people prefer decentralized cryptocurrencies that are not controlled by a single entity.
The one advantage Bitcoin has over Ethereum, Litecoin, Zcash, IOTA etc. is that it was the first cryptocurrency. That gives it some value. Maybe not ideal for transactions but for a store of value. If you have gold you are not going to use it for everyday transactions. You use cheaper forms of currency for that (USD).
Ford doesn't care about decentralization, they care about a p2p system that they can claim as an industry first (like SYNC) that is secure and wont be hacked. If anyrhing, Ford wants to know more and control more about what is going on in the cars as they utilize this communication system with other vehicles.
I still dont understand what Bitcoin is. Also, what the hell is mining? Ive tried to read up on a few articles but still dont get how it works.
Anyone wanna break it down in some kiddie terms so i can understand?
Anyone wanna break it down in some kiddie terms so i can understand?
Probably the most complex pyramid scheme ever developed. It is built on the illusion of fake scarcity.
My initial understanding of mining is using your computer's processing power to solve complex mathematical equations to verify Bitcoin transactions. The reason for this is so that every Bitcoin is unique and cannot be duplicated and the reward for solving said equations is more Bitcoin. Regular computers used to be able to solve these equations but it has gotten exponentially harder so dedicated computers are pooled together to solve said equations.
The idea behind solving equations like this is called Blockchain Technology which is very useful for anything from stock market analysis to NASA flight plans to world population estimating or anything else that requires a ton of computational power.
I ****ing lol'd
So its other companies(NASA, NYSE....DOD?) using regular people to help compute insane equations which are then paid in Bitcoin? Or is it someone who contracts to these companies to field the subcontractors(miners) required to make the computations?
Who controls the price of Bitcoin? I assume the company making the currency available to the public?
Are people chosen for the computations dependent on the rig they use? I know those "miners" have depleted the GPU supply for the past year or so to make money. So, is a person with a 10 GPU mining specific system more likely to get chosen to run these computations over a regular joe with 2 GPU's?
I hope i don't come off as sarcastic. I am genuinely intrigued at how this whole thing works. Dont think id ever attempt to try it but its interesting to see how technology has spawned its own currency.
EDIT: Just reread what you wrote and am baffled once again. So its people solving complex equations to VERIFY bitcoin transactions? Then they get paid on top of that with Bitcoin? Isnt that just a gigantic revolving circle?
Im even more confused than i was before i wrote this.
The contracts and equations can be contained within each block of the blockchain and the computers are mining to unlock these blocks by decoding the equations. There a finite amount of these so and every different developer will design their blockchain to have more or less which will determine overall value if there is a limited supply or an abundant supply. That is the simplest way I understand it.
I think exchanges have an influence on the prices and supply and demand plays a role. Somebody is not sitting in an office saying hmm I think Bitcoin is now worth $4000 lol! Also when someone goes on an exchange like Coinbase and converts their hard earned US dollars for crypto currencies they are supporting the price of that cryptocurrencies based on the current exchange rate. Many people have done this. Coinbase has the ability to be linked to checking accounts and you can transfer USD directly from there to your Coinbase account. Then the USD sit their in an account and you can decide at what price point you are willing to buy say Bitcoin, Ethereum, Litecoin and now Zcash. Coinbase plans to add many more altcoins and there are rumors they would even add Ripple. Ripple was number 2 for a while the past few weeks behind Bitcoin after it overtook Ethereum's market cap. But very recently Ethereum took back the number 2 spot however the two are still very close.
How Cryptocurrency Prices Work, Explained
"Daily cryptocurrency trading volumes are around the $14 billion mark, while daily forex trades are closer to $5 trillion. The spread — the difference between the buy and sell price — on foreign currency trades will be a few pennies at the most, while spreads on cryptocurrency trades can be as high as a few dollars.
All this points to a very thin market that naturally moves very quickly and thus increases the volatility of cryptocurrency prices.
A large number of new adopters are also joining the market every single day. At the beginning of 2018, cryptocurrency exchanges reported that they were adding 100,000 new users every day. Many of these members will have significant vested interest in the price of cryptocurrencies going either up or down, which adds to the disruptive nature of the market and further increases volatility.
Finally, price manipulation can be rife in nascent markets. Central exchanges control most of the flow of cryptocurrencies, giving them a lot of incentive to grow their revenue by artificially manipulating crypto prices. One way they can do this is by manipulating the price feeds displayed on exchanges, prompting traders to either buy or sell.
The effect of this type of manipulation is compounded if you throw in thousands of new market participants who can be easily taken advantage of. In addition, price manipulations can be hard to prove and control in unregulated markets.
Central exchanges also provide a single point of failure. They manage and store large sums of crypto, which means if they get hacked, it can have a significant effect on the price of cryptocurrencies."
No, the regular people also get paid in whatever currency they are mining. Note that you can't mine Bitcoin with GPUs anymore. Those days are long gone. You could do it 8-10 years ago but now dedicated ASIC devices are required. Some people have a few of them in their homes or businesses but there are very large mining farms that do the majority of transaction confirmations. For this reason Bitcoin has become centralized in a way because the hash rate is concentrated in fewer hands.
Ethereum, Zcash and Monero etc. were all ASIC resistant to promote the use of only GPUs and help ensure decentralization. However ASICS were developed for all three. ASIC devices are engineered specifically for the algorithms of each crypto and can hash at much higher rates and use less power per hash than a GPU. To counter this Monero forked and changed the algorithms thereby bricking all the ASIC devices and making them paper weights. There have been pressure to do the same for Ethereum and Zcash. Ethereum developers are considering implementing ProgPoW. There are plans to implement Proof of Stake for Ethereum in the future. Once that is done large scale mining would not be possible anymore and transactions would be confirmed in a different manner.
https://www.coindesk.com/momentum-is-building-to-block-ethereum-asics
I have added to some of my positions recently. Nothing huge, but pretty large discounts over my averages last year. More than likely I can see myself holding these for a very long time. BAT and ETH are still my favorites.
Off topic got erased
Ok, I thought it was on topic since we are discussing cryptos and stocks and how there are winners and losers. Kennedy was the winner and the shoe shine boy the loser lol?!
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