Is Bitcoin the Next Big Thing?

[Admin]

Don't worry, it takes a lot to stamp out "irrational exuberance" (the clue being the first word in the expression)

It's true. This has affected me but bitcoin is unmoved by the news. I see 25k-30k by end of March.

 

[Systreg]

some coins have a total daily transaction volume under $1,000,000 so it's obvious that any purchase of significant size (e.g. $10,000+) will dramatically affect the value of the currency (that won't help you get rich, because it will plunge equally fast if not faster if you attempt to sell a large position).

@Edwin, not having done any sort of trading before, and not knowing the ins and outs of what makes prices fluctuate, it wouldn't have occurred to me about someone buying a load of coins if the daily transaction volume was under $1,000,000, or why that would make the price go up and down, those aren't things I think about, at most, I look at the graphs to see what the coin has done since it was started.

My simplistic approach would be to buy 50K of whatever coin at around $0.01 each, hold on to them and hope they get to $1.00 each, if so, sell them or exchange them using something like shapeshift, for something that's easier to exchange for cash.

Don't worry, it takes a lot to stamp out "irrational exuberance" (the clue being the first word in the expression)

Sorry, you lost me there, Edwin, that went right over my head

 

[websaway]

This whole issue reminds me of sh*t politicians who mould your thinking to assist their objectives, regardless of your best interests. If you own Bitcoin now, you are likely to encourage others to invest, self interest before thought for others. I always said that domain names were worth what you could do with them and get from them, while others said they were only worth what someone else would pay for them. A domain can be used and the value enhanced regardless of what someone else will pay for it. Bitcoin has no underlying value other than what someone else will pay for it, the only product behind this pyramid scheme seems to be the mechanism of it's production.

 

[ian]

As a proof of work blockchain, Bitcoin works to the point where it has to handle a lot of traffic, at which point it falls over. It desperately needs a lightning network to help, not just all these hard folks. Bitcoin is going to struggle to get us all eventually buying in satoshis (the only way in which it would be understandable to the layman how much something costs), but as a haven for funds, it will probably always be at the top. The last few days has proven that after a massive run of alt coins, the money then filters back in to BTC as a 'store of wealth'. I never really got my head around this until yesterday!

 

[Systreg]

I only just noticed on the https://coinmarketcap.com/all/views/all/ site that it mentions coins and tokens, I wasn't aware there were 2 things you could buy, I thought Golem and the others listed were all coins. I searched to find what the difference between them is and found this:

https://masterthecrypto.com/differences-between-cryptocurrency-coins-and-tokens
https://masterthecrypto.com/differences-between-cryptocurrency-coins-and-tokens

The main difference between altcoins and tokens is in their structure; altcoins are separate currencies with their own separate blockchain while tokens operate on top of a blockchain that facilitates the creation of decentralized applications.

What's best to buy, tokens or coins? Does anyone here invest in tokens, or are you just interested in coins?

 

[Edwin]

Think there are currently 40 odd billion xrp in circulation, with an additional 60 billion still with creators ( they were planning to put them in escrow and release at 5 billion a year so as not to flood market) All the tokens are pre mined and there will never be more created. CEO Chris Larson became the 5th richest person alongside Zuckerberg this week it seems. On paper anyway, as he co founded and owns largest amount of ripple.

Doesn't that scream "dodgy"? He's not started a company employing 10,000s of people and earning $billions. He's merely the cocreator of one of over 2,000 cryptocurrencies. Yet his creation is somehow "worth" the same.

It's as if a bag of air and a bag of gold were being equally valued by investors. Nuts!

 

[Edwin]

In fact, that is something else to consider.

If (big BIG if) cryptocurrencies keep attracting larger and larger pools of investment, where's the incentive for anyone smart to create the next "normal" startup, i.e. one which actually makes something or offers some sort of tangible service? And what happens to the job creation impulse that goes along with that. If a handful of people in a garage can create the next cryptocoin and see it valued at the same level as 10+ year old, massive companies, nobody's going to do anything other than crypto going forward.

It's like the story of the planet where all the shops eventually ended up being shoe shops (one of the volumes in Douglas Adams' Hitchhiker's Guide series) - they all did ok and then they all collapsed and took the economy permanently with them as they went.

Perhaps the "doom" of humanity isn't rogue AI or anything as exotic as that. Perhaps it's a disintegration of normal business and economic drives - fragmented and shredded by the mad gold-rush-on-steroids-to-the-nth-degree crypto markets.

There may come a tipping point beyond which redressing the balance becomes impossible. What happens when normal companies start pouring their funds and resources into crypto instead (already starting, but for the flaky ones only)? And what happens if other companies chase them down that particular rabbit hole for fear of missing out on the quick hit of a currency appreciation?

 

[Edwin]

Also worth noting: unlike Bitcoin, a lot of the later coins have been created with huge reserved pools of currency for a handful of insiders (whether supposedly safeguarded for them in some way, or flat-out handed over to them at the beginning)

So that means they will always be open to manipulation by a tiny, tiny cabal of people. If a currency has 40% of coins in circulation and 60% held by a few people, then those holding the 60% have total control over the coin's future. They can crash the currency at will any time they like by liquidating their holdings - and there's nothing that people investing in the "external" pool of coins (the only ones made available) can do about it.

At the very very least, that should serve to divide the crypto universe into 2 categories: the "fair" currencies (everyone has a chance at all/most of the coins, e.g. by mining) and the "loaded" currencies (insiders filled their boots then allowed the scraps to be traded).

 

[websaway]

The tipping point Edwin, as with when labour MP's became landlords, is when the NUM invest their pension fund in crypto currencies. I congratulate anyone who has made money in Bitcoin. I am still of the opinion that it is a pyramid scheme, albeit a legal one, so far anyway.

 

[Edwin]

BTW, it should be possible to use the data from https://coinmarketcap.com/all/views/all/ to get at least a vague idea of which coins are liquid or illiquid.

You can tell from the current price and the volume how many coins of that cryptocurrency were traded in the past 24h (won't be exact because of price fluctuations, but it's at least ballpark). If that's a low number then it's pretty illiquid (and if it's a low number but the number of coins in circulation is high, then it's VERY illiquid).

You can also look at the total trade volume vs the total market cap to get another view onto the same issue. If the market cap is high but the trade volume is low, it's pretty illiquid. If the market cap is huge but the trade volume is tiny, it's VERY illiquid.

That may or may not matter, depending on what you want to do with the coin in question. But it's at least a good thing to know in case you need to get out of a position in a hurry - will be very tough to do so if the currency's illiquid, much easier to do so if there's tons of trading activity.

 

[Edwin]

The tipping point Edwin, as with when labour MP's became landlords, is when the NUM invest their pension fund in crypto currencies. I congratulate anyone who has made money in Bitcoin. I am still of the opinion that it is a pyramid scheme, albeit a legal one, so far anyway.

Like local councils dumped their money into Iceland (the country - though they would have probably done better buying stock in the stores) and then lost a ton when the financial crash rolled around.

 

[ian]

What's best to buy, tokens or coins? Does anyone here invest in tokens, or are you just interested in coins?

Coins are typically best to invest in because they are operators of blockchains. At the moment, tokens are operating on blockchains that are still trying to figure themselves out. Those blockchains that prove to be real world workable solutions will ultimately see the biggest successes. On paper, of the heavy hitters, Litecoin with their fast transfers and cheap transfers should win out, but newer blockchains like Stellar are proving that the game moves fast, and there are many more coming.

 

[Edwin]

To take a couple of examples...

DigitaNote (XDN) has a $564,492,781 market cap and $155,113,000 worth of currency traded in the last 24 hours, so that means that 27.48% of all currency was traded (ok, it's probably many of the same coins being traded again and again, but that's still great liquidity).

Cryptonex (CNX) has a $245,671,689 market cap and $251,868 worth of currency traded in the last 24 hours, so that means that just 0.10% of all currency was traded.

So it's clear that XDN is much, much more liquid than CNX.

Does that make it a good (or better) investment? Who knows? Is it a data point worth knowing? Probably.

 

[Edwin]

Looking at current price and trade volume, something like Tao (XTO) has 32,709,745 coins in circulation but only 34 of them were traded! So that means it would be almost impossible to build up or get out of a position in any reasonable amount of time.

Digibyte (DGB) on the other hand has 9,657,930,531 coins in circulation but 1,420,000,000 of them were traded. So it should be incredibly easy to close a position.

 

[dee]

Doesn't that scream "dodgy"? He's not started a company employing 10,000s of people and earning $billions. He's merely the cocreator of one of over 2,000 cryptocurrencies. Yet his creation is somehow "worth" the same.

It's as if a bag of air and a bag of gold were being equally valued by investors. Nuts!

@Edwin. WIth ripple the XRP is almost secondary to their business model I believe. The company seem pretty transparent in what they are doing. They sell the technology for cross border transactions, of which XRP is the blockchain mechanism. The quickest way to get 10,000 dollars from New York to Paris right now is to put it in a suitcase, get on a plane and fly it in. Their system allows interbank , cross border transfers in approx 4 secs. All completely traceable and audited within blockchain ( exactly what its good for) The infrastructure also allows for a huge transaction volume , of the order needed for companies like visa etc per second. A LOT more than bitcoin for example.

The 60 Billion XRP they hold is being put in escrow and released at a rate of 5 billion a year I believe. All of which was set out ages ago. I have to say they are the only ones I bought into to as I believe in what they are doing as a company. They have a good use of the technology coupled with a need thay have filled.

 

[dee]

nothing here..... posted in wrong thread. Sorry

 

[Edwin]

If the banks really, really feel threatened, they’ll come up with an instant payment mechanism. At the moment they’re happy to pocket the fat fee and the interest incurred during such transfers. But when push comes to shove it’s not difficult (given enough willpower and resources)

And when that happens it will be for fiat currency, without any intermediation via crypto required.

 

[dee]

If the banks really, really feel threatened, they’ll come up with an instant payment mechanism. At the moment they’re happy to pocket the fat fee and the interest incurred during such transfers. But when push comes to shove it’s not difficult (given enough willpower and resources)

And when that happens it will be for fiat currency, without any intermediation via crypto required.

Agreed... although whatever ripple labs are doing seem to be working. They have over 100 banks/institutions already signed up it seems. Again though, xrp is just part of the equation. They have a suite of systems that they sell for various uses. I think you can basically set it up to trade any asset using XRP as the intermediary.

 

[martin-s]

I'm starting to look at blockchain dapps as basically maturing into web 3.0. My bet for Ethereum is that it'll reach $5k during 2018.

 

[Systreg]

Ok, I'm almost ready to roll, registered on CoinBase, uploaded my passport, but now I have to go in front of my webcam, show my passport again and take a photo of myself.

Once that's done I can transfer money in from my bank, but then it's a right feck about to be able to buy something elsewhere.

First, I need to buy Bitcoin on CoinBase, register on Gdax.com, transfer my Bitcoin to there from CoinBase, then I was supposed to register at Binance.com and transfer the Bitcoin to there from Gdax, but Binance aren't taking any new registrations, so, any suggestions for trading sites that list all the cryptos to buy?

All the crypto's went a bit mental since yesterday, most of them crashing loads, so it's probably a good time for buying at the moment.