Things are really getting interesting now.

 

South Korea plans to ban cryptocurrency trading, rattles market

 

https://in.reuters.com/article/us-southkorea-bitcoin/south-korea-plans-to-ban-cryptocurrency-trading-rattles-market-idINKBN1F002B

 

I bet their friends to the north had something to do with that.

 

^The core problem is that cryptocurrencies aren't really solving any existing problem with traditional money.  But if they get really big they will damage traditional money, and we will all be the worse for it. 

 

Sure it does. A specific cryptocurrency cannot be counterfeited and its value is the same no matter where in the world it is. See:

https://www.technologyreview.com/s/609481/why-americas-biggest-bank-digs-anonymous-cryptocurrency/

 

It also reduces the number of steps for making large, international monetary transfers between banks and businesses.

 

It's still not a "currency" until people hold their savings in it and use it for day-to-day transactions. As long as people have a "buy low, sell high" mentality and still need to sell their bitcoin (convert it to dollars) in order to buy goods and services, bitcoin isn't a currency, it's an investment vehicle.

 

Travel some more. Cryptocurrencies are used as a currency in day to day shopping all over the world, especially in the Pacific Rim and in Chinatowns all over the USA and Canada.  Go back and read my post above with the article from Japan linked in it.

Things are really getting interesting now.

 

South Korea plans to ban cryptocurrency trading, rattles market

 

https://in.reuters.com/article/us-southkorea-bitcoin/south-korea-plans-to-ban-cryptocurrency-trading-rattles-market-idINKBN1F002B

 

I bet their friends to the north had something to do with that.

 

 

All of my alt-coins are shooting up in value after a week of declines.

MoneyGram Jumps After Saying It'll Test Ripple's Digital Coins

https://www.bloomberg.com/news/articles/2018-01-11/ripple-says-moneygram-will-test-its-digital-asset-for-payments

Faces of Bitcoin...the two guys in this photo have been friends with my brother for over ten years.  The guy on the left is up $20,000 this year (he put in $1,000 in March) and the guy on the right is the guy I mentioned earlier who is up $120,000 (put $5,000 in Ethereum in March). 

 

So on one hand we've got all these anonymous guys out there who made a ton of money in 2017...then we're going to have all the guys who are down $50k in 2019.  The idiots taking out loans to get into crypto in 2018. 

 

 

Have to admit I'm a little envious. I made my first trade early December after 5 months paper trading and kind of developed a strategy with pharmaceutical stock. After a month it's been flirting with making a profit but feel it will make some nice capital gain in the long run because of catalyst's coming up. I thought of crypto but don't understand it and heard you really need to know what you're doing to get in that game.

aww you didn't bring it home -- so when they were up on paper, or should i say bits, did they cash out on top? still in riding that tiger? what???

 

 

+++

 

 

does anybody think this is a good idea?

 

http://mentalfloss.com/article/55414/7-cities-have-their-own-currencies

 

 

also, i keep reading retail and the like are heading toward not just accepting, but starting their own currencies as well. hmm, where does that lead?

 

https://www.retaildive.com/news/amazon-takes-a-step-toward-cryptocurrency/509967/

 

 

 

 

Yeah, cryptocurrencies for each retailer will kill off credit cards.  Right now credit cards charge a fee and they're slow to pay.  Amex has like a 3-day delay in paying, which is why many retailers have not accepted it.  But the delay is what enables Amex's huge float and they make their money completely off the float. 

 

So if credit cards are eliminated, retailers will save about 2% AND they'll get paid immediately. 

Yep, I feel sorry for those who are debt-financing their crypto investing. Invest only cash into the alt coins with significant backing, like IBM's Stellar. But crypto is only getting started. Right now, only 15% of banks are using blockchain. IBM expects about two-thirds of banks to be implementing the technology within just four years...

 

https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GBP03467USEN

 

And speaking of IBM (and WalMart, Oracle, Visa, etc) and future growth....

 

Blockchain Is Pumping New Life Into Old-School Companies Like IBM and Visa

http://fortune.com/2017/12/26/blockchain-tech-companies-ibm/

i think amex also charges retailers more as well and thats also why they dont use it. i dk about the other lower rung cards. i guess they charge less and pay quicker and make their $ on people not paying off their balances right away. so retail doing their own thing will certainly throw the credit racket for a loop.

 

i think the problems start if and when they stop accepting traditional currency. thats already happening on a case by case basis with small businesses in hipster neighborhoods. its just the usual annoying monied/gentrifyer/racist/fascism at the moment, but it could get normalized for everyone if it expands. one of my local coffee shops stopped using actual stamped customer cards and now you have to use your debit card to earn a free coffee. any day now i fully expect them to say sorry they cant take a bank debit card, we can only use their e-currency. or some crypto-currency if not their own.

 

maybe i’m getting way ahead of it here, but it does seem to be the direction we are headed in. and since i went there, why not go further — that looks a prelude to or something in conjunction with the breakup of the usa, and perhaps elsewhere in the world, into city-states.

The credit card companies all go through a middleman that has a major office in...Cincinnati (actually Mason).  It's a totally unnecessary legacy from how credit cards were originally established back in the 1960s, and adds to the cost of all credit/debit transactions. 

 

Right now Macy's and other companies with their own credit cards make a huge amount of money from them because they get to keep all of the credit card fees they would instead be paying to Capitol One or Wells Fargo or whoever for themselves. 

 

For places like Macy's and Amazon, switching to a blockchain system would further reduce those costs because they'd completely circumvent Visa, MasterCard, and that obscure middleman in suburban Cincinnati.

 

 

 

 

The peer-to-peer transactions within the financial industry is just the tip of the iceberg. Blockchain's ultimate purpose is to replace fiat currencies. So the next step is for everyday money transfers among everyday citizens, then comes bill payments. The last step is merchants will start accepting cryptocurrency as payment. This is already happening throughout the Orient. You'll see Bitcoin or Monero signs in many store windows there and in Chinatowns in North America. And it's happening with Tron (TRX) and game.com, as well as Apple wanting retailers to accept Apple Pay. The trillion-dollar-dollar market cap that now exists in cryptoland is a drop in the bucket, Jake. Tell your brother's buddies to reinvest (if they haven't already) their pocket change they've made thus far into well-supported alt coins.

Proprietary blockchains will reduce fees and floats and improve security, but those improvements won't really trickle down to the ordinary person.  $500 in annual savings won't change the life of someone making $30,000. 

 

Meanwhile, there is absolutely nothing to look forward to in a world chaos triggered by scam unregulated currencies.  Everyone will be way worse off other than a handful of fascist overlords.  There aren't any fundamental problems with the U.S. Dollar, Canadian Dollar, British Pound, Euro, etc.  Cryptocurrency is a solution in search of a problem.   

 

 

Also, it should be pointed out that the IRS *DOES* expect everyone to report their capital gains, and that holding crypto for less than 1 full year is a short-term capital gain which means you must pay your regular earned rate, which is likely 25% or higher.  If you wait a full year then you pay 15%, assuming that you made under $450k or something like that. 

 

The IRS is no doubt watching this stuff closely and you'd be a fool not to report. 

What you don't know about cryptocurrencies and their potential utilities could fill infinity. It's a revolutionary technology and, like all new technologies, has its upsides and downsides. I take it you or someone you know works in a field that will replaced by it?

What you don't know about cryptocurrencies and their potential utilities could fill infinity. It's a revolutionary technology

 

Well I've been following this for almost 10 years.  I knew A LOT of people who were buying and selling drugs with it circa 2012 and knew one guy who mined 6 bitcoins with his personal computer back then and another guy who mined 166 litecoins.  I never bought any because I had no use for them because...I don't do drugs.  There was no anticipation back then that bitcoin was going to skyrocket in value, especially after the price collapsed following the Mt. Gox incident. 

 

The big question is why, suddenly, in 2017 this all took off after Bitcoin having existed since 2009 and various alt coins including the fake Dogecoin.  Blockchain hasn't been a new idea since 2010~, so why is it all suddenly a new idea?  People were actually using bitcoin as currency back in the drug years.  Now it's just a speculative object. 

 

By 2020 this is all going to be a comical memory.  As I explained already, blockchains will have some useful applications.  Unregulated currencies can't do anything of any significance that is legal that traditional currencies can't.  Countries with unstable currencies, where a crypto currency might be of use, don't have large economies.  Their economies are like a fraction of Wyoming's.  So their impact in legitimizing crypto as real worldwide currency will be nill. 

 

 

^ this is the dot com bubble all over again. 

Well, I sold my Bitcoin for cash, and invested the money in a market fund. My gut feeling was that Bitcoin was valued too high. 

 

Last month, I had to send $ to a man in Singapore.  And by everyone's talk you would think cryptocurrency would be the way to go.  But it turned out the PayPal was the easiest option. That made me think that yes, bitcoin is solving a problem that doesn't exist, so I sold.  Maybe I am making a big mistake.  Time will tell, but I think lots of people buying something just for the increase in price, not for the actual use of the coin is the definition of bubble. 

 

And yes, I will be reporting my capital gains and pay 15% to the IRS.

I heard the same talk in the 1990s that the Internet was a solution in search of a problem and that it would all go away soon. The only benefit it seemed was that initial stock offerings of companies with dot.com in the name was making a few people rich. Then the "tech bubble" happened and everyone said "I told you so." But what followed the "bubble" wasn't a crash but a correction. Today, the tech market is far larger than it was 20 years ago and is so interwoven into our daily lives we couldn't imagine life without it. How will blockchain affect us? In ways none of us can predict. But to brush it off as irrelevant or dangerous is as presumptuous as me telling you that I know what the future will be like as a result of blockchain. I know only one thing -- that I'll see you all on the other side of our expectations.

You can't invest in "blockchain".  There is no such thing as a "blockchain company".  It's simply a way to use existing computers and the existing internet.  Blockchains have been around for 10 years.  As I have already mentioned, they should be useful for reducing fees and increasing digital security.  For consumers, it will mostly be used for petty stuff.  We're 20 years into the internet and people are using it mostly to gossip and take photos of themselves. 

 

 

What you don't know about cryptocurrencies and their potential utilities could fill infinity. It's a revolutionary technology

 

Well I've been following this for almost 10 years.  I knew A LOT of people who were buying and selling drugs with it circa 2012 and knew one guy who mined 6 bitcoins with his personal computer back then and another guy who mined 166 litecoins.  I never bought any because I had no use for them because...I don't do drugs.  There was no anticipation back then that bitcoin was going to skyrocket in value, especially after the price collapsed following the Mt. Gox incident. 

 

The big question is why, suddenly, in 2017 this all took off after Bitcoin having existed since 2009 and various alt coins including the fake Dogecoin.  Blockchain hasn't been a new idea since 2010~, so why is it all suddenly a new idea?  People were actually using bitcoin as currency back in the drug years.  Now it's just a speculative object. 

 

By 2020 this is all going to be a comical memory.  As I explained already, blockchains will have some useful applications.  Unregulated currencies can't do anything of any significance that is legal that traditional currencies can't.  Countries with unstable currencies, where a crypto currency might be of use, don't have large economies.  Their economies are like a fraction of Wyoming's.  So their impact in legitimizing crypto as real worldwide currency will be nill.

 

Doge is the best!  It will soon overtake all of the world's currencies!

BTW seems that alot of this block chain shit will not even be currency, but rewards points like what Hooters is doing. I can see that taking off, having apps to store your Hooterscoin points and Starbucks latte bits etc.

^ To the moon!

You can't invest in "blockchain".  There is no such thing as a "blockchain company".  It's simply a way to use existing computers and the existing internet.  Blockchains have been around for 10 years.  As I have already mentioned, they should be useful for reducing fees and increasing digital security.  For consumers, it will mostly be used for petty stuff.  We're 20 years into the internet and people are using it mostly to gossip and take photos of themselves. 

 

 

 

Wow. I'm sorry Jake, but that kind of response is so ignorant (yes, there are many blockchain companies that are legal entities, have staff, boards of directors, etc -- Google "blockchain companies" sometime) and off-base (the Internet hasn't changed our lives?? -- it simply is the most powerful information sharing and commercial platform ever created, from Google searching, to how we watch TV/listen to music/get instant news, to replacing bricks-and-mortar stores) that I strongly encourage you to stick to what you know. I'm astonished that you feel informed enough to have an opinion about something over which you obviously know absolutely nothing. Well, my mind is blown...

If the guy invented Dogecoin as a joke (which he did), the in-house guys at any of the big banks can set up their own blockchain stuff and no doubt are. 

 

Are all these nascent blockchain companies only accepting payment in crypto?  Hell no. 

 

 

Why should banks set up their own blockchain if there's no future in it?  I hope you know the answer -- because there is a future. And why should there be separate, legit blockchain/channel companies? I trust you know the answer to that as well -- because it's easier to capitalize the whole delivery/support infrastructure of blockchain by issuing a digital coin than it is by issuing stock.

 

This isn't an orthodox religion, Jake. Nor does blockchain have enough infrastructure support or educational awareness (as this thread has revealed). Should the president of General Motors in the 1920s have refused to use a train or streetcar? When the GMs of blockchain develop the support/infrastructure and familiarity to maximize their utilization, the only people left using fiat and traditional record keeping will be the same people who don't know how to use the Internet for anything more than gossip or sharing pics.

You guys sound like a bunch of crypto-fiends. If I invested in this stuff I know there's a good chance I'd make a bunch of money but I think I would go mad, obsessing over it.

It's no different than any other investment. Do your research, invest your own money and then check back in a month or two, and make adjustments as additional research warrants. Unlike other investments, the fact that regulation has yet to catch up with the crypto world means it is an especially brutal business. That only means you need to be more disciplined and stand pat if you have invested in something that your research says is worthwhile. Most new cryptos take several years for them to mature into higher-utility, higher-revenue product.

Is a Ripple IPO Coming in 2018?

http://m.nasdaq.com/article/is-a-ripple-ipo-coming-in-2018-cm905153

I heard something about regulation coming to the crypto's. Don't have a link but wondering if you had any insight on that Ken?

I heard something about regulation coming to the crypto's. Don't have a link but wondering if you had any insight on that Ken?

 

I think South Korea is looking into this. 

is that going to bring the market down to more rational levels or do you think nothing will come of it or nothing will change?

I have no idea.  I know nothing about crypto.  I avoid it like the plague.

Why should banks set up their own blockchain if there's no future in it?  I hope you know the answer -- because there is a future. And why should there be separate, legit blockchain/channel companies? I trust you know the answer to that as well -- because it's easier to capitalize the whole delivery/support infrastructure of blockchain by issuing a digital coin than it is by issuing stock.

 

This isn't an orthodox religion, Jake. Nor does blockchain have enough infrastructure support or educational awareness (as this thread has revealed). Should the president of General Motors in the 1920s have refused to use a train or streetcar? When the GMs of blockchain develop the support/infrastructure and familiarity to maximize their utilization, the only people left using fiat and traditional record keeping will be the same people who don't know how to use the Internet for anything more than gossip or sharing pics.

 

I don't agree with Jake's characterization of the internet, but his take on blockchain and crypto currencies makes a lot of sense.  I see a whole lot of conflation of (1) a technology or method of record keeping (blockchain) (2) companies that offer services using that technology/method, and (3) crypto currencies. Aren't these three separate things?

South Korea has considered banning cryptocurrencies entirely. But for now they're considering regulations on the rampant speculation. South Koreans are protesting...

 

https://qz.com/1180342/south-koreans-petition-against-the-government-cryptocurrency-crackdown/

 

Jake knows as much about blockchain as he knows about the internet. He didn't even know that many blockchains are being incubated by companies. C'mon...

^ So as an active investor, what is your take? Personally, I know very little about them but there are a lot of people at my office who are into them. Was curious if you had any insight into this and whether it may disrupt the market or if it is just a blip. I know it is your opinion but, you seem to be the resident expert on this board on this topic so interested in hearing it.

The question is whether you believe in the technology, the people behind it, and its future applications. We're ultimately dealing with the future and there are no experts on the future. Investing in new technologies requires information, faith, balls, patience, vision. As for the sideshow frauds, real and perceived threat regulation, ignorance, fear -- it's just noise. If you can focus on the fundamentals, ride out the wild fluctuations and be patient over the next few years, it may well be worth it.

^ I don't doubt your long view of the market and think in 10+ years your projections are likely to be true, but I don't want to tie up my money into this amount of volatility waiting for the long game to play out. I am not a day trader either so I don't invest in this. I find it fascinating but not necessarily for me, but do appreciate your perspective on this

The question is whether you believe in the technology, the people behind it, and its future applications. We're ultimately dealing with the future and there are no experts on the future. Investing in new technologies requires information, faith, balls, patience, vision. As for the sideshow frauds, real and perceived threat regulation, ignorance, fear -- it's just noise. If you can focus on the fundamentals, ride out the wild fluctuations and be patient over the next few years, it may well be worth it.

 

That's not the only question! You also have to ask whether the companies you are investing in have a sustainable edge in monetizing the technology, whether through IP, first mover advantage, network effects, etc. And you also have to separate the technology from the "currency" aspect. The fact that the technology might be great has no real bearing on the valuation of alt coins as an asset, as opposed to shares in companies delivering the tech.

^ I don't doubt your long view of the market and think in 10+ years your projections are likely to be true, but I don't want to tie up my money into this amount of volatility waiting for the long game to play out. I am not a day trader either so I don't invest in this. I find it fascinating but not necessarily for me, but do appreciate your perspective on this

 

I only take a long view on investments. I'll never beat a algorithm at day-trading. So the trick is to find a young blockchain with a well-funded management team (ie: funded by venture capitalists, not by cryptocurrencies), is affordable because it's still new, has some early interest by major players (ie: established tech firms, credit card companies, major money transfer firms, large retailers, etc), and the tech is fast, scalable, decentralized, and if it includes channel infrastructure is a real plus.

 

On that score, I like Ripple/XRP, Stellar Lumens/XLM, Cardano/ADA and even Tron/TRX is worth a small investment considering its low price. I'm also willing to take a stab at a few others because I can afford to, like EOS. (BTW: I still think Ethereum has room to run even though ADA may give it a challenge). All of these (except ETH) are affordable, so if you don't have a lot of money, you don't have to invest a lot of money to establish a meaningful position. Once you put your money in, put your coins/tokens in a crypto vault and save it offline. Then walk away for a few months or years (better) like that treasury bond your grandmother gave you years ago.

 

That's not the only question! You also have to ask whether the companies you are investing in have a sustainable edge in monetizing the technology, whether through IP, first mover advantage, network effects, etc. And you also have to separate the technology from the "currency" aspect. The fact that the technology might be great has no real bearing on the valuation of alt coins as an asset, as opposed to shares in companies delivering the tech.

 

Hence the need to measure the fundamentals once you decide to get into the market.

  I see a whole lot of conflation of (1) a technology or method of record keeping (blockchain) (2) companies that offer services using that technology/method, and (3) crypto currencies. Aren't these three separate things?

 

Correct.  An "investment" in a cryptocurrency is not an investment in "blockchain".  Pretending that buying a cryptocurrency to buy into "blockchain" is like saying an airline stock is an investment in air or a shipping stock is an investment in sea water. 

 

There is no reason why a "blockchain" company would have to be separate from any other business software company. 

 

No, they can be the same thing, but not always. For example, Ripple is a channel that has offices worldwide and XRP is their coin, but they're part of the same company. Bitcoin is a coin only which makes it vulnerable -- its greatest asset is its familiarity and utility. But not likely to be sustainable over the long term. When Bitcoin succumbs to its more well-grounded, structurally integrated (management, support, channel, digital products, etc) competition, I'm sure many casual observers will claim its the demise of crypto and not realize that Bitcoin's demise will represent a maturation of the sector.

^But you can't buy Ripple (the company), correct?

 

Is a Ripple IPO Coming in 2018?

http://m.nasdaq.com/article/is-a-ripple-ipo-coming-in-2018-cm905153

^But you can't buy Ripple (the company), correct?

 

Is a Ripple IPO Coming in 2018?

http://m.nasdaq.com/article/is-a-ripple-ipo-coming-in-2018-cm905153

 

Correct. Not unless you buy out an existing investor. But XRP and the Ripple channel are inseparable. XRP is one of the few largely centralized cryptos and isn't technically a coin either. It's a token based on fiat currencies. Plus, its use is limited -- but that use (international transfers) can be done faster and cheaper using XRP than any other digital currency and even better than fiat currencies. So if you want to speculate on the future of Ripple, you buy XRP. A lot of people see the price of Ripple now at $1-$3 and think Ripple is going to be at Ethereum levels ($1,000+) or higher, so they they think they're going to be rich. But if Ripple climbs above $10, I'll be surprised. That hasn't kept me from increasing my positions in it every time there's a panic. A potential 3- to 10-times return on my investment is worth the money I'm willing to risk.

https://seekingalpha.com/article/4137721-ripple-tokens-worthless

Just like anything else, if nobody is using or intends to use XRP, then it is worthless.

 

This white paper is a great source of info for why a bank would want to use XRP along with Ripple technology, they show diagrams of why it's better for a bank to use XRP as well. Doesn't mean they have to, but liquidity is key and XRP gives banks faster access to their funds:

 

https://ripple.com/files/xrp_cost_model_paper.pdf

 

Furthermore, look into whether or not XRP has applications beyond its advertised use with bank settlements. Turns out that XRP can easily be turned around to be a consumer currency with a very small investment (money that Ripple has) and can be turned into a Bitcoin cash crusher. It is just not wise to do that right now. If Ripple had to they could. Smarter to go long game, conquer the bank back office and establish your foundation first. Ripple has the time and resources to do both.

Bitcoin has lost about 25% of its value today and is currently trading at around $10,500.

This piece touches on a few of the things I've been saying here:

https://www.nytimes.com/2018/01/16/magazine/beyond-the-bitcoin-bubble.html?action=click&contentCollection=Opinion&module=Trending&version=Full&region=Marginalia&pgtype=article

 

1. blockchains and cryptocurrencies are two completely different subjects, even though all cryptocurrencies (to date) use decentralized blockchains. 

2. Ripple is an actual company -- the ripple coin is a completely separate issue

3. Ethereum is open source with nobody in charge and no profit motive -- the Ether coin is a separate issue

 

The dangling of coins by all of these companies or non-profit projects is basically just an advertisement that may or might not go up in value.  If it does rise in value, at some future date it will crash. 

 

Bitcoin has lost about 25% of its value today and is currently trading at around $10,500.

 

Yeah they all bombed today.  They all hit lows at basically the same moment around 6pm and all turned around at the same moment, and in the same proportion.  These endless flash crashes and flash recoveries are pretty indicative of institutional trading. 

 

See farther up in this thread. A ban was discussed but doesn't appear to be in the cards.

 

BTW....

 

Maersk, IBM to launch #BlockChain-based platform for global trade https://t.co/EUwkdI7Dr9

It's no different than any other investment. Do your research, invest your own money and then check back in a month or two, and make adjustments as additional research warrants. Unlike other investments, the fact that regulation has yet to catch up with the crypto world means it is an especially brutal business. That only means you need to be more disciplined and stand pat if you have invested in something that your research says is worthwhile. Most new cryptos take several years for them to mature into higher-utility, higher-revenue product.

 

It's no different...except that if I decide to cash out of XYZ stock for $500,000, I get my money when the transaction clears.  Is this even possible in crytpo-world?  I was told you have to cash out at less than $10,000 per transaction, sometimes even less???

I finally got well-positioned in Ripple over the weekend, apparently just in time for the next big move up. Let's go, XRP!!!

 

Care to share with us how much you've lost since January 4?