If you are a crypto investor this should be what you read if you want to understand why you should or should not invest and what are the chances of picking a winner. It is written from a long term investor's point of view. Most everything I've read from people claiming to be "investors" in crypto currency are not investors, they are traders. The difference is time horizon. This paper articulates the paths crypto currencies might take over time if you accept the reality of economics.
It reinforces what I already believed apart from one aspect that has forced me to pull back on some of the opinions I have stated. I asked for someone to explain the rationale for holding a crypto currency, apart from simply trading for a profit. This has answered my call and offers a rationale explanation of how Bitcoin in particular might evolve.
The opening paragraph is a good summary. Blockchain technology has the potential to disrupt a number of industries and to create significant economic surplus. The open-source nature of public blockchain protocols, combined with intrinsic mechanisms to break down monopoly effects, mean that the vast majority of this economic surplus will accrue to users. While tens or perhaps hundreds of billions of dollars of value will also likely accrue to the cryptoassets underlying these protocols and therefore to investors in them, this potential value will be fragmented across many different protocols and is generally insufficient in relation to current valuations to offer a long-term investor attractive returns relative to the inherent risks. The one key exception is the potential for a cryptoasset to emerge as a dominant, non-sovereign monetary store of value, which could be worth many trillions of dollars. While also risky, this potential value and the probability that it might develop for the current leading candidate for this use case (Bitcoin) would appear to be sufficiently high to make it rational for many investors to allocate a small portion of their assets to Bitcoin with a long-term investment horizon.
So whilst a trader might not be concerned with anything other than anticipating sentiment affecting short term price, an investor is interested in the longterm reward of holding an asset. Essentially, according to this paper, there is no point holding a crypto currency that is linked to a useful application of the particular flavour of blockchain technology i.e most of the new ones. It can have very little economic value to the holder of the token, only the users of the application it supports. This is 100% what i assumed to be the case, but the paper makes me re-think the idea, that I disputed with @kentaddick, that no crypto currency stood a chance of becoming a store of value, in effect, to replace gold.
Just as private investors have embraced crypto currency and driven up the value, the same could happen if institutions decided that Bitcoin was now a mainstream asset of sufficient value to support a market, or sovereign nations with a crap currency decided to go Bitcoin. Many things would have to happen, and doesn't mean they will happen, and if they did it could take 4 years or 400 years, but all least I can now sleep knowing there is an arguable rationale for buying Bitcoin if it becomes as irrational as believing in gold.
I will continue to distinguish between trading, where the nonsense from those ITK is of interest in predicting irrational price movements, and investing for long term asset growth where the normal rules of economics still hold good.
FT Lex (with whom I would hesitate to mess) on the Telegram ICO:
There is more weird jargon in the white paper for Telegram’s mooted $1.2bn initial coin offering than a Scientology manual. The fundraising will finance “an infinite sharding paradigm” achieved through “a variant of the Byzantine Fault Tolerant protocol”. ICO marketing documents are famously abstruse. What is different about this cash call is that some serious investors are taking it seriously.
The dreamers and schemers who launch ICOs all have big plans. Most do not have a network across which their funny money — and the blockchain technology that drives it — can spread. Telegram, in contrast, operates a messaging app. This is popular among cryptocurrency fans for its high levels of encryption. They could constitute a ready-made network across which Telegram’s digital dough is exchanged.
That suggests an association with blockchain applications envisaged by those stiffs from the world of fiat money. Some stock exchanges hope to distribute blockchain technology across their own well-established networks. Accenture estimates that could save the top investment banks $12bn a year in reconciliation costs.
There would also be validation for cryptocurrencies in Telegram backing from the likes of Sequoia Capital. Venture capitalists expect a proportion of bets to crash and burn. Even so, cryptos are in danger of becoming respectable. Futures exchanges have begun offering bitcoin contracts. Semi-penitent former tax haven Switzerland wants “to be the crypto-nation”.
Sooner or later, steelier states will shield the policy tool of fiat money by squashing unregulated cryptos. Telegram, run from Dubai by Russians, might attract scrutiny if, by then, it had become an system for exchanging value secretly across borders.
Did the middle of this article deceive you into thinking Lex was going pro-crypto? If so, you are too trusting. In unregulated investment, the gullible always end up like that paradigm Telegram talks about: sharded.
Wouldn't touch TON with a barge pole... Invest in stuff you think could reach an unrealistic market cap, not one that is already their. It sums up the market the fact that I genuinely think there's a chance that Arcblock could be a scam, but I'm going to invest because I think it'll do a few hundred percent with idiots buying on hype and I'll flip it
Wouldn't touch TON with a barge pole... Invest in stuff you think could reach an unrealistic market cap, not one that is already their. It sums up the market the fact that I genuinely think there's a chance that Arcblock could be a scam, but I'm going to invest because I think it'll do a few hundred percent with idiots buying on hype and I'll flip it
I dunno dude, investing in something you half suspect to be a Ponzi scheme on the belief you can beat the scammers is opening yourself up to a lot of risk. That’s before the fact of the moral question. You’ll be part of the growth and could sucker other people in.
Tomorrow (Saturday), i am doing absolutely zero, except 1) Re-read this thread from top to bottom (for about the 4th time) 2) Attempt to set up an account on Bitstamp and 3) Watch the Addicks via IFollow. Oh, and before that get some 'supplies' to last me through the day! One of those days that i love - sad bar steward i have become !
Oh, and also read up some more about Blockchain to try to get some understanding of the technology.
Tomorrow (Saturday), i am doing absolutely zero, except 1) Re-read this thread from top to bottom (for about the 4th time) 2) Attempt to set up an account on Bitstamp and 3) Watch the Addicks via IFollow. Oh, and before that get some 'supplies' to last me through the day! One of those days that i love !
Pay day today. Think I might allocate a bit of funds as an ico fund.
@CAFCsayer and @kentaddick which coins are you holding for longer term rather than just a quick flip (such as experty which has perhaps now reached their potential)?
Has Vechain still got legs?
How about telcoin, power ledger, rchain and chain link- have they had their rise?
Of course these are all you opinions but we trust your insight on them for information
@CAFCsayer and @kentaddick which coins are you holding for longer term rather than just a quick flip (such as experty which has perhaps now reached their potential)?
Has Vechain still got legs?
How about telcoin, power ledger, rchain and chain link- have they had their rise?
Of course these are all you opinions but we trust your insight on them for information
Vechain is my long term hold, it has way too many partnerships and ties with the Chinese government for it to fail. Chainlink I’m holding on to for now but will wait a few months to see what more news comes out about it.
ICX is one people are saying for a long term hold as well.
Wouldn't touch TON with a barge pole... Invest in stuff you think could reach an unrealistic market cap, not one that is already their. It sums up the market the fact that I genuinely think there's a chance that Arcblock could be a scam, but I'm going to invest because I think it'll do a few hundred percent with idiots buying on hype and I'll flip it
I dunno dude, investing in something you half suspect to be a Ponzi scheme on the belief you can beat the scammers is opening yourself up to a lot of risk. That’s before the fact of the moral question. You’ll be part of the growth and could sucker other people in.
As I said before... My risk appetite is high and this is being shilled by Balina, Suppoman etc. Its not nice, but I also have no moral objection to that at all, gotta play the game... This bubble isnt going to be around forever and I want it to pay for a house.
@CAFCsayer and @kentaddick which coins are you holding for longer term rather than just a quick flip (such as experty which has perhaps now reached their potential)?
Has Vechain still got legs?
How about telcoin, power ledger, rchain and chain link- have they had their rise?
Of course these are all you opinions but we trust your insight on them for information
I'm actually selling out of all of my holdings into Ether for next week, there's a few good ICOs that I want to jump on... Its a matter of freeing up cash rather than a move on outlook...
Vechain is longterm, RChain moreso... Mainnet not out for a while. Telcoin is a good long hold, think it has legs to go 3x from here, some big partnership announcements in the wings and Ive got a feeling one of them is potentially Vodafone
Wouldn't touch TON with a barge pole... Invest in stuff you think could reach an unrealistic market cap, not one that is already their. It sums up the market the fact that I genuinely think there's a chance that Arcblock could be a scam, but I'm going to invest because I think it'll do a few hundred percent with idiots buying on hype and I'll flip it
I dunno dude, investing in something you half suspect to be a Ponzi scheme on the belief you can beat the scammers is opening yourself up to a lot of risk. That’s before the fact of the moral question. You’ll be part of the growth and could sucker other people in.
As I said before... My risk appetite is high and this is being shilled by Balina, Suppoman etc. Its not nice, but I also have no moral objection to that at all, gotta play the game... This bubble isnt going to be around forever and I want it to pay for a house.
Yeah I’m gonna start going into ico’s etc for a fast growth. Would be good to get to a point where I can get enough Vechain to have a master node and go from there
Wouldn't touch TON with a barge pole... Invest in stuff you think could reach an unrealistic market cap, not one that is already their. It sums up the market the fact that I genuinely think there's a chance that Arcblock could be a scam, but I'm going to invest because I think it'll do a few hundred percent with idiots buying on hype and I'll flip it
I dunno dude, investing in something you half suspect to be a Ponzi scheme on the belief you can beat the scammers is opening yourself up to a lot of risk. That’s before the fact of the moral question. You’ll be part of the growth and could sucker other people in.
As I said before... My risk appetite is high and this is being shilled by Balina, Suppoman etc. Its not nice, but I also have no moral objection to that at all, gotta play the game... This bubble isnt going to be around forever and I want it to pay for a house.
Yeah I’m gonna start going into ico’s etc for a fast growth. Would be good to get to a point where I can get enough Vechain to have a master node and go from there
This... Want to get to the stage where I can start getting into the pre-contract with the big boys
One day I read academic paper of the investment world, contrary to the consensus view, articulating how Bitcoin has the theoretical potential to become an investable asset class as a store of value like gold, so little harm taking a small punt and holding for the longterm.
Next day I read a blog from a confirmed crypto warrior who says the investment community just don't get it yet his words support the consensus view of the investment community:
"Bitcoin’s true nature is as an instant way to transmit money anywhere in the world. It is not an investment, or money itself, and holding on to it in the hopes that it will become valuable is like holding on to an email or a PDF in the hopes it will be come valuable in the future; it doesn’t make any sense."
One day I read academic paper of the investment world, contrary to the consensus view, articulating how Bitcoin has the theoretical potential to become an investable asset class as a store of value like gold, so little harm taking a small punt and holding for the longterm.
Next day I read a blog from a confirmed crypto warrior who says the investment community just don't get it yet his words support the consensus view of the investment community:
"Bitcoin’s true nature is as an instant way to transmit money anywhere in the world. It is not an investment, or money itself, and holding on to it in the hopes that it will become valuable is like holding on to an email or a PDF in the hopes it will be come valuable in the future; it doesn’t make any sense."
Comments
http://www.bbc.co.uk/news/technology-42809676
Also I can't see a purchase option.
https://bitcointalk.org/index.php?topic=2233274.380
https://www.reddit.com/user/JakeTheCryptoKing/comments/7sp4z4/the_crypto_king_report_jan_24th_whales_and/
It reinforces what I already believed apart from one aspect that has forced me to pull back on some of the opinions I have stated. I asked for someone to explain the rationale for holding a crypto currency, apart from simply trading for a profit. This has answered my call and offers a rationale explanation of how Bitcoin in particular might evolve.
The opening paragraph is a good summary.
Blockchain technology has the potential to disrupt a number of industries and to create significant economic surplus. The open-source nature of public blockchain protocols, combined with intrinsic mechanisms to break down monopoly effects, mean that the vast majority of this economic surplus will accrue to users. While tens or perhaps hundreds of billions of dollars of value will also likely accrue to the cryptoassets underlying these protocols and therefore to investors in them, this potential value will be fragmented across many different protocols and is generally insufficient in relation to current valuations to offer a long-term investor attractive returns relative to the inherent risks. The one key exception is the potential for a cryptoasset to emerge as a dominant, non-sovereign monetary store of value, which could be worth many trillions of dollars. While also risky, this potential value and the probability that it might develop for the current leading candidate for this use case (Bitcoin) would appear to be sufficiently high to make it rational for many investors to allocate a small portion of their assets to Bitcoin with a long-term investment horizon.
So whilst a trader might not be concerned with anything other than anticipating sentiment affecting short term price, an investor is interested in the longterm reward of holding an asset. Essentially, according to this paper, there is no point holding a crypto currency that is linked to a useful application of the particular flavour of blockchain technology i.e most of the new ones. It can have very little economic value to the holder of the token, only the users of the application it supports. This is 100% what i assumed to be the case, but the paper makes me re-think the idea, that I disputed with @kentaddick, that no crypto currency stood a chance of becoming a store of value, in effect, to replace gold.
Just as private investors have embraced crypto currency and driven up the value, the same could happen if institutions decided that Bitcoin was now a mainstream asset of sufficient value to support a market, or sovereign nations with a crap currency decided to go Bitcoin. Many things would have to happen, and doesn't mean they will happen, and if they did it could take 4 years or 400 years, but all least I can now sleep knowing there is an arguable rationale for buying Bitcoin if it becomes as irrational as believing in gold.
I will continue to distinguish between trading, where the nonsense from those ITK is of interest in predicting irrational price movements, and investing for long term asset growth where the normal rules of economics still hold good.
There is more weird jargon in the white paper for Telegram’s mooted $1.2bn initial coin offering than a Scientology manual. The fundraising will finance “an infinite sharding paradigm” achieved through “a variant of the Byzantine Fault Tolerant protocol”. ICO marketing documents are famously abstruse. What is different about this cash call is that some serious investors are taking it seriously.
The dreamers and schemers who launch ICOs all have big plans. Most do not have a network across which their funny money — and the blockchain technology that drives it — can spread. Telegram, in contrast, operates a messaging app. This is popular among cryptocurrency fans for its high levels of encryption. They could constitute a ready-made network across which Telegram’s digital dough is exchanged.
That suggests an association with blockchain applications envisaged by those stiffs from the world of fiat money. Some stock exchanges hope to distribute blockchain technology across their own well-established networks. Accenture estimates that could save the top investment banks $12bn a year in reconciliation costs.
There would also be validation for cryptocurrencies in Telegram backing from the likes of Sequoia Capital. Venture capitalists expect a proportion of bets to crash and burn. Even so, cryptos are in danger of becoming respectable. Futures exchanges have begun offering bitcoin contracts. Semi-penitent former tax haven Switzerland wants “to be the crypto-nation”.
Sooner or later, steelier states will shield the policy tool of fiat money by squashing unregulated cryptos. Telegram, run from Dubai by Russians, might attract scrutiny if, by then, it had become an system for exchanging value secretly across borders.
Did the middle of this article deceive you into thinking Lex was going pro-crypto? If so, you are too trusting. In unregulated investment, the gullible always end up like that paradigm Telegram talks about: sharded.
I couldn’t get on the whitelist even though I tried to register before it closed it wasn’t accepting anyone that didn’t ore-register interest
One of those days that i love - sad bar steward i have become !
Oh, and also read up some more about Blockchain to try to get some understanding of the technology.
Has Vechain still got legs?
How about telcoin, power ledger, rchain and chain link- have they had their rise?
Of course these are all you opinions but we trust your insight on them for information
ICX is one people are saying for a long term hold as well.
Am thinking of getting rid of some Litecoins, but not sure if i should or what to swap it for. I have 300+ coins!
Vechain is longterm, RChain moreso... Mainnet not out for a while. Telcoin is a good long hold, think it has legs to go 3x from here, some big partnership announcements in the wings and Ive got a feeling one of them is potentially Vodafone
One day I read academic paper of the investment world, contrary to the consensus view, articulating how Bitcoin has the theoretical potential to become an investable asset class as a store of value like gold, so little harm taking a small punt and holding for the longterm.
Next day I read a blog from a confirmed crypto warrior who says the investment community just don't get it yet his words support the consensus view of the investment community:
"Bitcoin’s true nature is as an instant way to transmit money anywhere in the world. It is not an investment, or money itself, and holding on to it in the hopes that it will become valuable is like holding on to an email or a PDF in the hopes it will be come valuable in the future; it doesn’t make any sense."
What larks Pip.