Bitcoins/Litecoins/Virtual Currencies
- Thread starter Tripamang
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Scoresby
Trakanon Raider
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So yeah, I invested in a handful of these a while back and am holding onto them as a hedge in the event major world events cause a dramatic shift in global economy. The hope (for me) would be that a digital currency, like Bitcoin or maybe Ether, end up as the new world reserve. This would drive the value of a single coin up into the hundreds of thousands if not millions of USD.
And while I didn't cash out my entire life savings to buy into this, it does have some sense behind it. The math behind how new coins are made and overall ceiling on how many can exist is a nice deflationary control. The fact that they are infinitely divisible (current base unit, the satoshi is 1/100,000,000th of a bitcoin) means that there will be practical quantities of these available; even if millions are lost in time due to lost wallets and a single satoshi becomes more valuable than a loaf of bread, you can divide the base unit by 10 (everyone gets 10 more) and create a new base unit for small purchases.
I am most interested to see where this is in 10 years or so. Here's the world reserve for the past 500 years or so...why would the next one not be digital? Especially in the current age of globalization.
And while I didn't cash out my entire life savings to buy into this, it does have some sense behind it. The math behind how new coins are made and overall ceiling on how many can exist is a nice deflationary control. The fact that they are infinitely divisible (current base unit, the satoshi is 1/100,000,000th of a bitcoin) means that there will be practical quantities of these available; even if millions are lost in time due to lost wallets and a single satoshi becomes more valuable than a loaf of bread, you can divide the base unit by 10 (everyone gets 10 more) and create a new base unit for small purchases.
I am most interested to see where this is in 10 years or so. Here's the world reserve for the past 500 years or so...why would the next one not be digital? Especially in the current age of globalization.
Jysin
Ahn'Qiraj Raider
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I said the same thing at $350, yet here we are.
But generally no, you don't buy at the peaks. That is bad investing 101 right there.
Ravishing
Uninspiring Title
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I have no idea what will happen, it's a huge risk, but I think it's fun to own some digital currency and with the surge in China it's getting to be less risky. I'm pretty happy with the markets right now but am buying a small amount of bitcoin/mth for giggles.
Scoresby
Trakanon Raider
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This is exactly how I look at it. It may all go away in a puff of smoke, but that's why you don't go all in (although had I done that I would be retired now...hindsight and all). I'm sure the initial investors in Microsoft didn't see where that was going either. Which brings up another interesting side to digital currency. You have a few major applications of it:
1) Use it as an alternative save haven asset.
2) Buy low, sell high day trading <--- I actually feel there is some legitimate money to be made as there is a huge "technical analysis" following for digital currency. While I don't believe technical analysis amounts to anything, I do believe that masses of people believe it and will follow what the math appears to tell them.
3) Usable as a currency, especially between countries.
4) Play a long position, hope the world burns and digital currency reigns.
I by no means hope for #4, but that is my investment strategy. The interesting part for me, I am certainly not the only person doing this and if everyone held onto all of their coins it is actually counter to the growth of the medium. At what point along the way will the "whales" dump their coins for capital, real estate, or other alternative investments? Will be interesting to see it all play out, but not in an "OMG honey, I just ruined our retirement way".
Ravishing
Uninspiring Title
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I think your #4 would tank the digital market, you'd want tangibles like gold/silver. Digital becomes valuable in a global flourishing economy imo.
I also believe the bitcoin rise is tied to the markets a little bit and if you see the markets start to drop, bitcoin will follow.
I don't know all the factors, who does? But I gotta believe a lot of people are sheltering some money in bitcoin while the markets are sky-high. I wouldn't count on bitcoin doing anything you are predicting for a long... long... time... (50+ years) and if digital currency ever becomes a reserve currency, I would think it would be something other than bitcoin.
What I do think will happen, and is already happening, is more vendors start to accept bitcoins, and eventually the USA accepts bitcoins, and you could deposit them in a US bank, but then there will be a slew of regulations & taxes & whatever.
Only way for a currency to really takeoff is if you can secure & regulate it.
Scoresby
Trakanon Raider
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Maybe, maybe not. There is already a lot of interest in countries where economies are being wrecked. I could see an aggregate of countries in similar situations enjoy the freedom of a non-regulated, but intrinsically fixed currency.
Four Countries Priming Bitcoin Demand Worldwide - Bitcoin News
Regarding adoption, I for sure can't see the future but most of the major shifts in the past didn't happen gradually but because of major world events (typically war). I don't think anyone will see it coming.
World Reserve Currencies: What Happened During Previous Periods of Transition?
Regarding the long-invest strategy (#4 in my previous post), I hypothesize that many of those investors would not ride the value all the way up and would "cash out", for lack of a better term, long before it reached full reserve status. Making some conservative assumptions, lets say there is $10 trillion in actual cash out there. Assuming all 21,000,000 bitcoins are mined (sometime around 2040) then each coin is worth ~$500,000.
As @a_skeleton_03 mentioned earlier, many early adopters had dozens if not hundreds of these. Some have already cashed out, but who would ride that wave all the way up from the current value without hopping off? So I suspect in the long run, very few people will keep large quantities and many will liquidate their coin, thus preserving the integrity of the market.
I also think there will be a hybrid market. Bitcoin may very well prove to be too sluggish for its own good to truly serve as a world currency (energy requirements per hash are steep). However, you could still use it as a store of value and shift into a more nimble currency like Ether for day-to-day purchases. The smart contracts in Ether are potentially game changing; as an example, pay your kids allowance in Ether AND you can dictate what they can (or can't) spend it on.
Bitcoin vs. Ether: We Will Invest In and Transact with Ether Differently, Here is Why
The downside there is the more complexity (i.e. features) you add to a system, the more likely it will have holes. Like the DAO attack that ultimately fractured the Ether market into ETH and ETC.
Classic and the DAO: What Drove Ether Prices in 2016 - CoinDesk
It'll be an interesting ride for sure.
Four Countries Priming Bitcoin Demand Worldwide - Bitcoin News
Regarding adoption, I for sure can't see the future but most of the major shifts in the past didn't happen gradually but because of major world events (typically war). I don't think anyone will see it coming.
World Reserve Currencies: What Happened During Previous Periods of Transition?
Regarding the long-invest strategy (#4 in my previous post), I hypothesize that many of those investors would not ride the value all the way up and would "cash out", for lack of a better term, long before it reached full reserve status. Making some conservative assumptions, lets say there is $10 trillion in actual cash out there. Assuming all 21,000,000 bitcoins are mined (sometime around 2040) then each coin is worth ~$500,000.
As @a_skeleton_03 mentioned earlier, many early adopters had dozens if not hundreds of these. Some have already cashed out, but who would ride that wave all the way up from the current value without hopping off? So I suspect in the long run, very few people will keep large quantities and many will liquidate their coin, thus preserving the integrity of the market.
I also think there will be a hybrid market. Bitcoin may very well prove to be too sluggish for its own good to truly serve as a world currency (energy requirements per hash are steep). However, you could still use it as a store of value and shift into a more nimble currency like Ether for day-to-day purchases. The smart contracts in Ether are potentially game changing; as an example, pay your kids allowance in Ether AND you can dictate what they can (or can't) spend it on.
Bitcoin vs. Ether: We Will Invest In and Transact with Ether Differently, Here is Why
The downside there is the more complexity (i.e. features) you add to a system, the more likely it will have holes. Like the DAO attack that ultimately fractured the Ether market into ETH and ETC.
Classic and the DAO: What Drove Ether Prices in 2016 - CoinDesk
It'll be an interesting ride for sure.
Ravishing
Uninspiring Title
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Regarding your 1st point here: These 4 countries all suffer from a failing national currency so looking at bitcoin does make some sense, but again, we're in a global age. I do not believe the "world will burn" as you say, so it's safe to assume digital will remain relevant, especially for countries that have a failing national currency.
Ambiturner
Ssraeszha Raider
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Except you have no way of knowing when you're at a peak without hindsight
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Chris
Potato del Grande
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Fuck you, this shit is why I didn't mine bitcoins back on the old forums. I'd be rich by now.
agripa
Molten Core Raider
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Hindsight is 20/20 and this is why you can't beat the market over a period of time.
If you are interested in mining you should check out monero.
https://www.reddit.com/r/Monero/comments/5zgail/rmonero_newcomers_please_read_everything_you_need/
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Yeah, I flipped Ether a few times to make a couple grand. I'm kicking myself because I had some back when it was 30 bucks and now its up, but whatever. Coinbase picked up Litecoins now though, and they've been bouncing around in the 20's and 30's. Made some money there, and playing with it now.
Arative
Ahn'Qiraj Raider
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