Do you invest in Bitcoin / Cryptocurrency?
New to Real Estate · Plantation, FL · Member since 2018 · 41 posts · 46 votes
I'm just curious how many other active REI also invest in cryptocurrencies? And if you do, what kind?
I am personally a fan of cryptocurrencies and what they are all about. I have put some money towards it, and will continue to do so, so I always get a laugh when I hear Brandon talk about bitcoin "investing" on the podcast! But I do understand where he is coming from as there really is no tangible asset to cryptocurrencies (or stocks for that matter) compared to REI in addition to it's long long standing history, research, and studies, etc.
That said, with what I now know and continue to learn about this fascinating and lucrative world of REI, majority of my investing will be here. But I'm still curious about everyone else.
Hi,
I'm new on biggerpockets.
I am interested in real estate, and I'm quite experienced in cryptocurrency.
There are actually a number of cryptos that are very useful to me on a practical level. Things like paying rent, and paying for all the internal costs and many administrative costs I have to pay to run my small business. With crypto, i'm saving on a bunch of fees that way.
Of course, there is tons of speculation in crypto. No doubt. But not all that's crypto is bad or a gamble. And not all speculation is bad. Some are much more realistic than others. Just like any other things you can put your money into, buying into the crypto market is a matter of doing your own research. and being thorough about it. don't invest in things you don't understand or don't care about. Invest in things you know and care about.
For example, in the real estate space, there are crypto coins already on the market like Swiss Real Coin (SRC) (launched), Atlant (ATL) (launched) and Chelle Coin (CHL) (soon to be launching their own ICO), that are all focusing on different kinds of real estate deals. The differences include geolocation, coin type or token type, the different types of things that can be done with the crypto, the sequence of operations carried out on the blockchain, the smart contract, etc.
So even at the high level, although they're all real estate-based cryptocurrencies, they are not all the same. While SRC is all about real estate in Switzerland, ATL is all about real estate in the Atlanta area. And CHL is built to serve real estate across metropolitan areas throughout North America.
The crypto real estate space is really one of the areas in crypto where I see tons of development and interest among both investors and buyers on the market who are looking to save more than a little when they buy a property with digital money.
If you have any questions about crypto I'm happy to share whatever I know. I'm sure I'll have many questions about real estate that you all know the answers to.
~~~ Keep on Keepin' it Real (Estate)!
I plan to do some trading among the top 3 to 5 highest volume cryptocurrencies. I like the opportunities provided by the volatility and would do it essentially as a day trading operation. I would commit a small amount of money, and very speculative, also not passive, since trading requires a close eye on the market, unless you are willing to trust an auto-trader. Very much in the "getting educated" phase with this, learning candlestick patterns, etc. Also need to get a better understanding/ trading model of the tax impacts.
There is another more passive opportunity that I haven't really looked at but intend to explore eventually. On the Binance exchange, you can act as the lending bank for other speculators buying on margin. You get paid your fee automatically, whether their trade gains or loses, and your money is only out of pocket for a few days, or the length of their trade. Any margin calls for the speculator happen automatically, so your principal should be protected.
Buying cryptos is not investing. Intelligently investing money into something requires that the asset you are investing in will pay you back in some form in the future. With a stock, it is dividend payments and increased shareholder value with reinvested cash into the business. With REI, it is monthly cash flow via rents minus expenses. With a dollar, which is an actual currency, you can buy "risk free" assets like Treasury bills, notes and bonds, which yield coupon payments (interest) plus the present value of the principle that is paid back at maturity, etc.
You cannot (to my knowledge) buy any kind of bond or get any kind of yield out of cryptos. Therefore, it is not an asset, and it is not an investment. It is strictly a gamble. Please keep this in mind when you are putting any money into these so-called "investments". No crypto owns the blockchain. There's no way for you to get any kind of positive yield or return unless it goes up in value because of others saying it is worth more. That is a very dangerous game to play. It is nothing more than a sophisticated Chuck E. Cheese token.
@Daniel Hanson Volatility and speculative is very right, as are the opportunities for trading if you have the risk tolerance for it. At any moment, literally anything can happen. I have not heard about acting as a lending bank through Binance, that sounds very interesting. Where's downside/risk to that?
@Dylan Barnard I can agree to that to a certain degree, hence the double quotes, "invest". If you are mining your own crypto via mining hardware, you can get a daily/weekly/monthly yield if you convert your coin to fiat - electricity costs / conversion fees with the option to sell your hardware if you would so choose. Strictly trading is another story, and is much more of a gamble on the current / future state of crypto. And who doesn't like Chuck E. Cheese?
Yes, you can make money mining on the backend, but that business's profitability is measured in USD, not BTC. Plus, you have a highly variable top line, so you can swing from operating at a profit to operating at a loss within minutes. The model is not sustainable and very risky long term.
At least you realize what you are getting into, because so many people that I talk to are betting their entire retirements on this stuff and they don't even understand it. That is exactly what happened in The Netherlands in the 1600s with tulip bulbs, and the laws of economics have not changed since then. "Tulipmania" is as real as it ever was.
Hi,
I'm new on biggerpockets.
I am interested in real estate, and I'm quite experienced in cryptocurrency.
There are actually a number of cryptos that are very useful to me on a practical level. Things like paying rent, and paying for all the internal costs and many administrative costs I have to pay to run my small business. With crypto, i'm saving on a bunch of fees that way.
Of course, there is tons of speculation in crypto. No doubt. But not all that's crypto is bad or a gamble. And not all speculation is bad. Some are much more realistic than others. Just like any other things you can put your money into, buying into the crypto market is a matter of doing your own research. and being thorough about it. don't invest in things you don't understand or don't care about. Invest in things you know and care about.
For example, in the real estate space, there are crypto coins already on the market like Swiss Real Coin (SRC) (launched), Atlant (ATL) (launched) and Chelle Coin (CHL) (soon to be launching their own ICO), that are all focusing on different kinds of real estate deals. The differences include geolocation, coin type or token type, the different types of things that can be done with the crypto, the sequence of operations carried out on the blockchain, the smart contract, etc.
So even at the high level, although they're all real estate-based cryptocurrencies, they are not all the same. While SRC is all about real estate in Switzerland, ATL is all about real estate in the Atlanta area. And CHL is built to serve real estate across metropolitan areas throughout North America.
The crypto real estate space is really one of the areas in crypto where I see tons of development and interest among both investors and buyers on the market who are looking to save more than a little when they buy a property with digital money.
If you have any questions about crypto I'm happy to share whatever I know. I'm sure I'll have many questions about real estate that you all know the answers to.
~~~ Keep on Keepin' it Real (Estate)!
Volatility and speculative is very right, as are the opportunities for trading if you have the risk tolerance for it. At any moment, literally anything can happen. I have not heard about acting as a lending bank through Binance, that sounds very interesting. Where's downside/risk to that?
@Mitchell T.
I haven't really investigated it yet. I would assume the biggest downside is that the loan is short term, measured in days, therefore there is a percentage of time where part of your money is not fully lent out and not earning a return. That would mean the return on the loans that are active would need to mathematically average out at a certain level in order to be an attractive rate of return compared with other alternative investments. Also at a general level there is what I call Exchange Platform risk, the platforms in general have some risk of being hacked or closing down. I haven't put any effort into quantifying that risk.
Buying cryptos is not investing. Intelligently investing money into something requires that the asset you are investing in will pay you back in some form in the future. With a stock, it is dividend payments and increased shareholder value with reinvested cash into the business. With REI, it is monthly cash flow via rents minus expenses. With a dollar, which is an actual currency, you can buy "risk free" assets like Treasury bills, notes and bonds, which yield coupon payments (interest) plus the present value of the principle that is paid back at maturity, etc.
You cannot (to my knowledge) buy any kind of bond or get any kind of yield out of cryptos. Therefore, it is not an asset, and it is not an investment. It is strictly a gamble. Please keep this in mind when you are putting any money into these so-called "investments". No crypto owns the blockchain. There's no way for you to get any kind of positive yield or return unless it goes up in value because of others saying it is worth more. That is a very dangerous game to play. It is nothing more than a sophisticated Chuck E. Cheese token.
@Dylan Barnard do you still stand by your statement above? I think you misunderstood the technology, just like the boomers who misunderstood "internet".
Cryptocurrencies, be it Cardano, Rippple, Litecoin, whatever... are all just "startups" leveraging blockchain technology. And just like startups, 99% of these projects will fail. But that doesn't mean these projects have no value - they've paved the way for improved technology... from Smart Contracts to Tokenization to Staking.
In many ways, investing in crypto assets has proven to be a safer bet than the dollar, which as of writing this post, loses 1% in value every 30 days - how's that for dumb money?
Buying cryptos is not investing. Intelligently investing money into something requires that the asset you are investing in will pay you back in some form in the future. With a stock, it is dividend payments and increased shareholder value with reinvested cash into the business. With REI, it is monthly cash flow via rents minus expenses. With a dollar, which is an actual currency, you can buy "risk free" assets like Treasury bills, notes and bonds, which yield coupon payments (interest) plus the present value of the principle that is paid back at maturity, etc.
You cannot (to my knowledge) buy any kind of bond or get any kind of yield out of cryptos. Therefore, it is not an asset, and it is not an investment. It is strictly a gamble. Please keep this in mind when you are putting any money into these so-called "investments". No crypto owns the blockchain. There's no way for you to get any kind of positive yield or return unless it goes up in value because of others saying it is worth more. That is a very dangerous game to play. It is nothing more than a sophisticated Chuck E. Cheese token.
@Dylan Barnard do you still stand by your statement above? I think you misunderstood the technology, just like the boomers who misunderstood "internet".
Cryptocurrencies, be it Cardano, Rippple, Litecoin, whatever... are all just "startups" leveraging blockchain technology. And just like startups, 99% of these projects will fail. But that doesn't mean these projects have no value - they've paved the way for improved technology... from Smart Contracts to Tokenization to Staking.
In many ways, investing in crypto assets has proven to be a safer bet than the dollar, which as of writing this post, loses 1% in value every 30 days - how's that for dumb money?
Still stand buy it. I still have to pay my bills in dollars, so I don't see how it is any better than buying a house in the meta verse that I can't actually live in but just pretend to live in.
I prefer to focus on cash flow with real assets like property and fundamentally sound stocks with healthy dividends than gamble on someone in the future paying me more for a piece of computer code. That just makes more sense to me. If someone wants to make that gamble, go for it. It just doesn't fall within my personal risk parameters. If I miss out on crazy gains, I am okay with that. Risk = reward, so you can't have immense returns without immense risk.
@Dylan Barnard
Google, Amazon, Facebook, windows, ios, PayPal, Visa, just pieces of computer code.
Those are all established companies with underlying cash flow and profits that increase over time. I don't understand how that is analogous to crypto. I've never once seen a crypto income statement or cash flow statement.
Established companies? Bitcoin's market cap alone is larger than all of the US banks. Countries have legalized it, US States have bills to legalize it, and right now, the Ukrainian government is soliciting donations to be made in bitcoin.
If you haven't seen a cash flow statement then you haven't done enough research. Bitcoin has beat your real estate appreciation for the past 10 years. And yes, you can get a dividend.
Established companies? Bitcoin's market cap alone is larger than all of the US banks. Countries have legalized it, US States have bills to legalize it, and right now, the Ukrainian government is soliciting donations to be made in bitcoin.
If you haven't seen a cash flow statement then you haven't done enough research. Bitcoin has beat your real estate appreciation for the past 10 years. And yes, you can get a dividend.
I already said I am okay with missing out on potentially immense returns. Just realize that the crazy returns you expect means that you are taking on more risk than I am.
And yeah I guess I haven't done enough research if I haven't been able to find the profit margin of Bitcoin, or a cash flow statement showing it's free cash flow per year. Can you provide me with some resources?
Established companies? Bitcoin's market cap alone is larger than all of the US banks. Countries have legalized it, US States have bills to legalize it, and right now, the Ukrainian government is soliciting donations to be made in bitcoin.
If you haven't seen a cash flow statement then you haven't done enough research. Bitcoin has beat your real estate appreciation for the past 10 years. And yes, you can get a dividend.
I already said I am okay with missing out on potentially immense returns. Just realize that the crazy returns you expect means that you are taking on more risk than I am.
And yeah I guess I haven't done enough research if I haven't been able to find the profit margin of Bitcoin, or a cash flow statement showing it's free cash flow per year. Can you provide me with some resources?
Hey Dylan - Bitcoin is a decade and a half old technology which is really only the start of how blockchains will be implemented into our daily lives. You're right unless you are a miner you are not going to find a cash flow analysis for BTC, but would you have found one for the internet in the 90s? This is akin to that. We are not investing in companies but protocols, foundational systems that will be built upon. Thus while many have attempted to map protocols using FCF or DCF, there's always some assumptions that take it astray.
ETH is a bit better to think about since most of the crypto activity is occurring there, I found this article from Ryan Allis on how is company models ETH:
https://coinstack.substack.com...
Hope this helps swallow crypto a bit easier.@Dylan Barnard
Google, Amazon, Facebook, windows, ios, PayPal, Visa, just pieces of computer code.
These are not examples of code. They are companies with physical assets, intellectual property, human resources (employees), cash reserves, investments and many revenue streams. They sell products, services or advertising that people pay for. I hope you made this comment off the cuff and don't actually believe that Google is the same Bitcoin.
My day job is with a company that makes electrical infrastructure for data centers. We sell to Google, Amazon. Microsoft and Visa. They invest hundreds of millions in their infrastructure. Massive data centers on a scale that would take years to replicate. We also sell hardware for crypto mining and the business model is different. Many mining operators are venture capital funds that just deploy for 12-24 month ROI. They look to get a fast return and get out. They may reinvest or move to something else. There are also established companies that are miners like Bitdeer. These are actual companies committed long term to the crypto larger defi business model. They are much more than just Bitcoin. Bitdeer is a company and a business, like Google.
Just understand when you buy Bitcoin that you do not own part of Bitdeer or any miner. You are paying them a fee to transact, so you are their customer. This is part of the risk with crypto. The businesses that actually support crypto are paid with mining and transaction fees. When prices are moving up, there is massive incentive for these companies. When prices plunge, the ROI disappears and miners start shutting down. Smart companies like Bitdeer are diversifying, so even if Bitcoin failed, the can shift the business to other use of blockchain technology.
A better analogy to Bitcoin would be currency trading or futures trading. You are buying something that isn't physical and banking on appreciation by the time you sell it.
Even just comparing software like Windows to Bitcoin, is a bad comparison. Windows is copywrite code owned by Microsoft. People pay to use the code. Bitcoin was released open source and owned by nobody. Anyone can copy, modify or use the code. Had the creator of Bitcoin secured copyright and patent protections, then Bitcoin would be more valuable. There are now considerable patents in the blockchain space, so there are people scrambling to protect IP. You mentioned PayPal, who is one company that does have blockchain patents. It just goes back to my original point that there are companies dealing with Bitcoin, but Bitcoin by itself is not a company.
@Dylan Barnard
Google, Amazon, Facebook, windows, ios, PayPal, Visa, just pieces of computer code.
These are not examples of code. They are companies with physical assets, intellectual property, human resources (employees), cash reserves, investments and many revenue streams. They sell products, services or advertising that people pay for. I hope you made this comment off the cuff and don't actually believe that Google is the same Bitcoin.
My day job is with a company that makes electrical infrastructure for data centers. We sell to Google, Amazon. Microsoft and Visa. They invest hundreds of millions in their infrastructure. Massive data centers on a scale that would take years to replicate. We also sell hardware for crypto mining and the business model is different. Many mining operators are venture capital funds that just deploy for 12-24 month ROI. They look to get a fast return and get out. They may reinvest or move to something else. There are also established companies that are miners like Bitdeer. These are actual companies committed long term to the crypto larger defi business model. They are much more than just Bitcoin. Bitdeer is a company and a business, like Google.
Just understand when you buy Bitcoin that you do not own part of Bitdeer or any miner. You are paying them a fee to transact, so you are their customer. This is part of the risk with crypto. The businesses that actually support crypto are paid with mining and transaction fees. When prices are moving up, there is massive incentive for these companies. When prices plunge, the ROI disappears and miners start shutting down. Smart companies like Bitdeer are diversifying, so even if Bitcoin failed, the can shift the business to other use of blockchain technology.
A better analogy to Bitcoin would be currency trading or futures trading. You are buying something that isn't physical and banking on appreciation by the time you sell it.
Even just comparing software like Windows to Bitcoin, is a bad comparison. Windows is copywrite code owned by Microsoft. People pay to use the code. Bitcoin was released open source and owned by nobody. Anyone can copy, modify or use the code. Had the creator of Bitcoin secured copyright and patent protections, then Bitcoin would be more valuable. There are now considerable patents in the blockchain space, so there are people scrambling to protect IP. You mentioned PayPal, who is one company that does have blockchain patents. It just goes back to my original point that there are companies dealing with Bitcoin, but Bitcoin by itself is not a company.
I think it'd be naive to be so dismissive of cryptocurrencies and blockchain technology. I understand the idea behind being skeptical about change, or anything that you're unfamiliar with, but it's pretty obvious there's a lot of value there.
At the end of the day, all investments are risks. Whether it's in real estate, stocks, business, cryptocurrency etc. What you decide to do should be based on your own situation and your own sense of risk management, not any one else's.
I think blockchain technology will be well apart of our future.
Established companies? Bitcoin's market cap alone is larger than all of the US banks. Countries have legalized it, US States have bills to legalize it, and right now, the Ukrainian government is soliciting donations to be made in bitcoin.
If you haven't seen a cash flow statement then you haven't done enough research. Bitcoin has beat your real estate appreciation for the past 10 years. And yes, you can get a dividend.
I already said I am okay with missing out on potentially immense returns. Just realize that the crazy returns you expect means that you are taking on more risk than I am.
And yeah I guess I haven't done enough research if I haven't been able to find the profit margin of Bitcoin, or a cash flow statement showing it's free cash flow per year. Can you provide me with some resources?
Hey Dylan - Bitcoin is a decade and a half old technology which is really only the start of how blockchains will be implemented into our daily lives. You're right unless you are a miner you are not going to find a cash flow analysis for BTC, but would you have found one for the internet in the 90s? This is akin to that. We are not investing in companies but protocols, foundational systems that will be built upon. Thus while many have attempted to map protocols using FCF or DCF, there's always some assumptions that take it astray.
ETH is a bit better to think about since most of the crypto activity is occurring there, I found this article from Ryan Allis on how is company models ETH:
https://coinstack.substack.com...
Hope this helps swallow crypto a bit easier.Thank you! Yes, I like the idea of ETH better (seems like the WordPress of the Blockchain), but I still can't bring myself to invest in the actual coin. Yes, let's say I was somehow able to buy a piece of the internet, that's still not where the value is. The value is in the companies that harvest it and make it useful. So buying a virtual coin still just feels like gambling to me, not investing.
I think it'd be naive to be so dismissive of cryptocurrencies and blockchain technology. I understand the idea behind being skeptical about change, or anything that you're unfamiliar with, but it's pretty obvious there's a lot of value there.
At the end of the day, all investments are risks. Whether it's in real estate, stocks, business, cryptocurrency etc. What you decide to do should be based on your own situation and your own sense of risk management, not any one else's.
I think blockchain technology will be well apart of our future.
No one is dismissing the value of the technology, just the value of the coin itself. Like someone mentioned above, PayPal is using Blockchain - I can get behind that idea because they are a company with underlying cash flow and profits. But buying a coin just because you think it will go up in value is reckless in my opinion. There is a fine line between investing and gambling and buying a coin falls on the gambling side IMO.
I think it'd be naive to be so dismissive of cryptocurrencies and blockchain technology. I understand the idea behind being skeptical about change, or anything that you're unfamiliar with, but it's pretty obvious there's a lot of value there.
At the end of the day, all investments are risks. Whether it's in real estate, stocks, business, cryptocurrency etc. What you decide to do should be based on your own situation and your own sense of risk management, not any one else's.
I think blockchain technology will be well apart of our future.
No one is dismissing the value of the technology, just the value of the coin itself. Like someone mentioned above, PayPal is using Blockchain - I can get behind that idea because they are a company with underlying cash flow and profits. But buying a coin just because you think it will go up in value is reckless in my opinion. There is a fine line between investing and gambling and buying a coin falls on the gambling side IMO.
Everyone is welcome to their opinion
What does PayPal do? It facilitates purchases and monetary transfers. Also does so using bitcoin.
What does bitcoin do? It is an immutable ledger on the most secure network on the planet, is censorship resistant, can't be manipulated or confiscated, hardest form of money ever known. And it facilitates purchases and instant instant money transfers - for free. And gives a person total ownership of their wealth. Seems pretty damn valuable to me.
The Internet is only valuable because of the company's I mentioned? I disagree. The Internet has value because it is valuable. For one, it allows people to send messages, music, pictures, instantly, video chat, and basically for free. Sound familiar?
And if it wasn't Google, Amazon, and the rest, it would be someone else. The Internet has always had inherent value.
However, there were people like Paul Krugman, who thought the Internet was a passing fad. There were lots of people and "analysts" and "investors" who thought Amazon would never survive. I believe most of the world thought that a stranger would never get into someone else's car nor rent someone's house over the Internet.
Do you see a pattern?
If you still don't believe owning a piece of the Internet is more valuable than a company that is built on top of it... Would you rather own a building in times square, or the entire block that everything is built on top of?
I think it'd be naive to be so dismissive of cryptocurrencies and blockchain technology. I understand the idea behind being skeptical about change, or anything that you're unfamiliar with, but it's pretty obvious there's a lot of value there.
At the end of the day, all investments are risks. Whether it's in real estate, stocks, business, cryptocurrency etc. What you decide to do should be based on your own situation and your own sense of risk management, not any one else's.
I think blockchain technology will be well apart of our future.
No one is dismissing the value of the technology, just the value of the coin itself. Like someone mentioned above, PayPal is using Blockchain - I can get behind that idea because they are a company with underlying cash flow and profits. But buying a coin just because you think it will go up in value is reckless in my opinion. There is a fine line between investing and gambling and buying a coin falls on the gambling side IMO.
Everyone is welcome to their opinion
What does PayPal do? It facilitates purchases and monetary transfers. Also does so using bitcoin.
What does bitcoin do? It is an immutable ledger on the most secure network on the planet, is censorship resistant, can't be manipulated or confiscated, hardest form of money ever known. And it facilitates purchases and instant instant money transfers - for free. And gives a person total ownership of their wealth. Seems pretty damn valuable to me.
The Internet is only valuable because of the company's I mentioned? I disagree. The Internet has value because it is valuable. For one, it allows people to send messages, music, pictures, instantly, video chat, and basically for free. Sound familiar?
And if it wasn't Google, Amazon, and the rest, it would be someone else. The Internet has always had inherent value.
However, there were people like Paul Krugman, who thought the Internet was a passing fad. There were lots of people and "analysts" and "investors" who thought Amazon would never survive. I believe most of the world thought that a stranger would never get into someone else's car nor rent someone's house over the Internet.
Do you see a pattern?
If you still don't believe owning a piece of the Internet is more valuable than a company that is built on top of it... Would you rather own a building in times square, or the entire block that everything is built on top of?
We are going to have to agree to disagree here man. You are talking in abstracts, I am talking in investment terms. I may be wrong and miss out on Bitcoin going to $1m, but you are deluding yourself if you don't think that comes with immense risk.
I think crypto enthusiasts need to decide whether they want it to be a currency or a technology. If it's a currency, massive appreciation is a recipe for massive deflation and a shrinking economy where people hoard money and don't invest it and nothing gets done. If it's a technology, then they need to provide some kind of return to the people that buy it. It can't be free for everyone to use like you are suggesting.
I think it'd be naive to be so dismissive of cryptocurrencies and blockchain technology. I understand the idea behind being skeptical about change, or anything that you're unfamiliar with, but it's pretty obvious there's a lot of value there.
At the end of the day, all investments are risks. Whether it's in real estate, stocks, business, cryptocurrency etc. What you decide to do should be based on your own situation and your own sense of risk management, not any one else's.
I think blockchain technology will be well apart of our future.
No one is dismissing the value of the technology, just the value of the coin itself. Like someone mentioned above, PayPal is using Blockchain - I can get behind that idea because they are a company with underlying cash flow and profits. But buying a coin just because you think it will go up in value is reckless in my opinion. There is a fine line between investing and gambling and buying a coin falls on the gambling side IMO.
Everyone is welcome to their opinion
What does PayPal do? It facilitates purchases and monetary transfers. Also does so using bitcoin.
What does bitcoin do? It is an immutable ledger on the most secure network on the planet, is censorship resistant, can't be manipulated or confiscated, hardest form of money ever known. And it facilitates purchases and instant instant money transfers - for free. And gives a person total ownership of their wealth. Seems pretty damn valuable to me.
The Internet is only valuable because of the company's I mentioned? I disagree. The Internet has value because it is valuable. For one, it allows people to send messages, music, pictures, instantly, video chat, and basically for free. Sound familiar?
And if it wasn't Google, Amazon, and the rest, it would be someone else. The Internet has always had inherent value.
However, there were people like Paul Krugman, who thought the Internet was a passing fad. There were lots of people and "analysts" and "investors" who thought Amazon would never survive. I believe most of the world thought that a stranger would never get into someone else's car nor rent someone's house over the Internet.
Do you see a pattern?
If you still don't believe owning a piece of the Internet is more valuable than a company that is built on top of it... Would you rather own a building in times square, or the entire block that everything is built on top of?
We are going to have to agree to disagree here man. You are talking in abstracts, I am talking in investment terms. I may be wrong and miss out on Bitcoin going to $1m, but you are deluding yourself if you don't think that comes with immense risk.
I think crypto enthusiasts need to decide whether they want it to be a currency or a technology. If it's a currency, massive appreciation is a recipe for massive deflation and a shrinking economy where people hoard money and don't invest it and nothing gets done. If it's a technology, then they need to provide some kind of return to the people that buy it. It can't be free for everyone to use like you are suggesting.
The purpose of a debate, for me, is not to hammer everyone into thinking my way.
So I'm definitely not trying to change your mind. Anyone who comes across this can read our thoughts here and make up their own.
I disagree that I'm speaking in abstracts. Buildings have a maintenance cost, yes? Some estimate 10% per year. They also require capital expenditures. They also become physically obsolescent over enough time. So the land underneath those buildings don't have maintenance costs. It doesn't become obsolete and it doesn't depreciate. If 10 buildings on times square fell down one day, that would be a major loss for the owners of those buildings. But if you owned the land underneath, you haven't lost anything.
Let's say in 5 years something better than Google comes along and Google is seen as obsolete. Does that make the Internet less valuable? No.
Yes, technology is deflationary. Inherently so.
Does it cost you 32 cents, or whatever a stamp costs, every time you send an email? I guess we could say to some degree that email has demonetized the USPS. I can name a 100 ways that technology has taken jobs, destroyed entire industries, made products and services cheaper and more abundant, and removed middlemen.
That's what people want. Convenience. And property ownership.
Somewhere around 2 or 3 months ago, someone sent $2Billion worth of bitcoin from one point to another. The total cost was $1.75. And done instantly, from the privacy of their own home, or whatever they wanted to be. They didn't have to drive to a bank branch, wait in line, fill out paperwork or send a fax, or discuss the details of a private transaction with a bank employee, and then wait a week for the money to arrive. imagine how difficult it would be to send 2 billion dollars over a bank wire. What do you think something like that would have cost?
People can decide whatever they want about it. Whether it's a currency or an asset. I look at it as property. And over the last 12 years, the greatest appreciating property that's ever existed. So I wouldn't spend it on PayPal or to buy coffee just as I wouldn't try to slice off a piece of an apartment building to pay for the same. Nor would I refinance to take money out and buy a car.
When did I say it comes without risk? Nor have I ever said it should be free to everyone.
There are many uses for it, including an actual cash return.
I think it'd be naive to be so dismissive of cryptocurrencies and blockchain technology. I understand the idea behind being skeptical about change, or anything that you're unfamiliar with, but it's pretty obvious there's a lot of value there.
At the end of the day, all investments are risks. Whether it's in real estate, stocks, business, cryptocurrency etc. What you decide to do should be based on your own situation and your own sense of risk management, not any one else's.
I think blockchain technology will be well apart of our future.
No one is dismissing the value of the technology, just the value of the coin itself. Like someone mentioned above, PayPal is using Blockchain - I can get behind that idea because they are a company with underlying cash flow and profits. But buying a coin just because you think it will go up in value is reckless in my opinion. There is a fine line between investing and gambling and buying a coin falls on the gambling side IMO.
Everyone is welcome to their opinion
What does PayPal do? It facilitates purchases and monetary transfers. Also does so using bitcoin.
What does bitcoin do? It is an immutable ledger on the most secure network on the planet, is censorship resistant, can't be manipulated or confiscated, hardest form of money ever known. And it facilitates purchases and instant instant money transfers - for free. And gives a person total ownership of their wealth. Seems pretty damn valuable to me.
The Internet is only valuable because of the company's I mentioned? I disagree. The Internet has value because it is valuable. For one, it allows people to send messages, music, pictures, instantly, video chat, and basically for free. Sound familiar?
And if it wasn't Google, Amazon, and the rest, it would be someone else. The Internet has always had inherent value.
However, there were people like Paul Krugman, who thought the Internet was a passing fad. There were lots of people and "analysts" and "investors" who thought Amazon would never survive. I believe most of the world thought that a stranger would never get into someone else's car nor rent someone's house over the Internet.
Do you see a pattern?
If you still don't believe owning a piece of the Internet is more valuable than a company that is built on top of it... Would you rather own a building in times square, or the entire block that everything is built on top of?
We are going to have to agree to disagree here man. You are talking in abstracts, I am talking in investment terms. I may be wrong and miss out on Bitcoin going to $1m, but you are deluding yourself if you don't think that comes with immense risk.
I think crypto enthusiasts need to decide whether they want it to be a currency or a technology. If it's a currency, massive appreciation is a recipe for massive deflation and a shrinking economy where people hoard money and don't invest it and nothing gets done. If it's a technology, then they need to provide some kind of return to the people that buy it. It can't be free for everyone to use like you are suggesting.
So I'm definitely not trying to change your mind. Anyone who comes across this can read our thoughts here and make up their own.
I disagree that I'm speaking in abstracts. Buildings have a maintenance cost, yes? Some estimate 10% per year. They also require capital expenditures. They also become physically obsolescent over enough time. So the land underneath those buildings don't have maintenance costs. It doesn't become obsolete and it doesn't depreciate. If 10 buildings on times square fell down one day, that would be a major loss for the owners of those buildings. But if you owned the land underneath, you haven't lost anything.
Let's say in 5 years something better than Google comes along and Google is seen as obsolete. Does that make the Internet less valuable? No.
Yes, technology is deflationary. Inherently so.
Does it cost you 32 cents, or whatever a stamp costs, every time you send an email? I guess we could say to some degree that email has demonetized the USPS. I can name a 100 ways that technology has taken jobs, destroyed entire industries, made products and services cheaper and more abundant, and removed middlemen.
That's what people want. Convenience. And property ownership.
Somewhere around 2 or 3 months ago, someone sent $2Billion worth of bitcoin from one point to another. The total cost was $1.75. And done instantly, from the privacy of their own home, or whatever they wanted to be. They didn't have to drive to a bank branch, wait in line, fill out paperwork or send a fax, or discuss the details of a private transaction with a bank employee, and then wait a week for the money to arrive. imagine how difficult it would be to send 2 billion dollars over a bank wire. What do you think something like that would have cost?
That $2B transfer was done anonymously and was most certainly a taxable event. I saw the same article and nobody ever talks about the tax burden, probably because tax evasion was involved. A wire transfer costs around $20 within the US and $50 internationally and would require proof of identity plus IRS reporting of the transaction (if the US is involved). It is not that Bitcoin transactions don't cost money, it is just how the miners are compensated. The miners get paid with crypto, but in the case of Bitcoin the rewards diminish over time. That forced scarcity makes the system get more expensive to operate and eventually will have an impact on transaction cost.
The Russian invasion of Ukraine is a great example of why Bitcoin faces challenges. The Russian banks were cut off from Swift, which allows international wire transfers. Russians are buying crypto to bypass and evade detection. People argue this helps crypto, but I would argue a system that attracts criminals (including tax evasion) is not sustainable. The exact reasons people love Bitcoin are its weakness.
I think blockchain and crypto are here to stay, but I am just not sure Bitcoin will be the winner. You use the analogy of Amazon, but it is easy to predict a winner looking back. There were hundreds of other dot com companies that failed. You are just conveniently only citing the one that succeeded. Book Stacks Unlimited was selling books online several years before Amazon through BBS went online at Books.com. They were eventually acquired by Barnes and Noble. We all know how the story ends. In 1994 there was a guy just like you telling people that Book Stacks was the future of book sales. In this story it is important to understand why Amazon succeeded. It wasn't because they had a superior website and they were not first. It was how Jeff Bezos built the company and deployed a strategy.