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Cryptocurrency

Discussion in 'Channel Zero' started by JesusMachine, Dec 13, 2017.

  1. misteraven

    misteraven Administrator

    Joined: May 7, 1999 Messages: 8,901 Likes Received: 376
    This response and the original you’re replying to is done of th best shit I’ve seen on the forum in a while. Awesome to see someone post a thought provoking comment and really enjoy seeing someone come along and addressit point by point with well informed facts and logical opinion.

    Two thumbs up.

    Rest of everyone reading this... take note.
     
  2. LastBoyScout

    LastBoyScout Dirty Dozen Crew

    Joined: Jun 5, 2003 Messages: 2,194 Likes Received: 37
  3. Mercer

    Mercer Moderator Crew

    Joined: May 2, 2007 Messages: 10,649 Likes Received: 1,064
    Thanks, just cleaned the grammar up in that post a little. It's funny going back and reading it, didn't think I was that passionate about this topic. Reminds me of the days I'd try to convince non believers graffiti was the most important art movement of all times. I had this shpiel that included "You're wrong, what get's destroyed? If anything, the train cars will only rust slower."
     
    LastBoyScout and misteraven like this.
  4. LastBoyScout

    LastBoyScout Dirty Dozen Crew

    Joined: Jun 5, 2003 Messages: 2,194 Likes Received: 37
  5. misteraven

    misteraven Administrator

    Joined: May 7, 1999 Messages: 8,901 Likes Received: 376
    "We’re talking about income tax, so your goal is to figure out your income from bitcoin in 2017. For the purposes of the IRS, that means bitcoin assets that were converted into non-bitcoin assets like cash or goods and services. Your bitcoin holdings aren’t taxable (at least not yet), but any time you sold bitcoin or used it to buy something, you were accruing taxable income."

    Suggest dudes not convert to fiat. Said it before, if you want to trade it out, might as well buy silver or gold with it. Take this how you want, but fact is that its actually a plan to that the Federal Reserve targets what they say is a 4% inflation rate. I've seen many trusted sources say in most years it's more realistic to say its actually in the 6 - 8% range when you audit the purchasing power for what Americans buy most (and much of which is not factored into the Feds equation for inflation) like fuel and groceries. That means every dollar you have saved in fiat, buys you 4% less every year (if you believe the Fed) or 6 - 8% less (if you believe the other sources). Note if you hold that over years, this is a compounding depreciation in the purchasing power (8% of $100 leaves you $92. Year 2 with 8% more inflation leaves you with $84.64. Year 3 with 8% more leaves you with $77.87 and on and on. If you don't want to believe the other sources, then go by what the Government tells you (Because after all, they'd never light right?!) and halve that compounding depreciation.

    No doubt many will point to the fluctuation of precious metals and be like, "thats way risky". But I'd argue that its not so much the metals fluctuating as it is is the fiat its being valued in. When the Fed expands or contracts the economy or the President signs a bill to spend a ton of money in one regard or another, you see metals swing in value. But once you start thinking of value in terms of other commodity with no regard to fiat, you'll see that metals have been very consistent for most of recorded history. (Keeping in mind that market is also heavily manipulated as well). An example is that if you look at the value of a quarter in 1964 (the last year it was largely made up of silver - plus other alloys) and then search eBay for junk silver quarters, you'll note that they sell for approximately the cost of a gallon of gas today. In 1964, that about what that quarter bought you. Likewise, if you look at the median home price during most of American history and instead converted that value to metals, you'll also note that the median house of today costs about the same if paid in the same amount / kind of metals.

    This is why people refer to precious metals as a hedge and not an investment. It circumvents the "invisible tax" placed on your savings by allowing you to preserve the purchasing power of your wealth of long periods of time, unlike fiat which is purposely engineered to slowly transfer your wealth out of your hands.

    Anyhow, I wont go into the advantages of remaining discreet by buying metals and holding your wealth in hand and available to convert back into whatever it is you want with very little effort or attention, but you can connect those dots.

    Perhaps we can also revive the Buying Gold and other investments thread as I find the two discussions very related. Link: http://forum.12ozprophet.com/threads/buying-gold-and-other-investments.124157/
     
  6. Mercer

    Mercer Moderator Crew

    Joined: May 2, 2007 Messages: 10,649 Likes Received: 1,064
    I'd probably invest in gold, and especially silver as part of my savings if it weren't for the further return on investment I'm anticipating on cryptocurrencies over the next couple of years. Once you go down the rabbit hole of investing, you start to see things in different ways. Noticed when I was in a fiat only frame of mind, I didn't really have a strong urge to save money. Once I got some crypto gains my entire thought process changed both consciously, and subconsciously.

    The entire time I was in the fiat frame of mind, I'd see very poor returns on my savings accounts. This got worse after 911, then diminished even further after the financial collapse of 2008. Since then, money has been practically given away for free. You can almost take out a loan with low enough interest to invest in something safe like bonds and make money. At the same time, you subconsciously understand that because of inflation, your saved dollar will buy less next year than it would this year. There's basically very little incentive to save, especially for people in middle, lower income brackets. It's smart, but it feels like trying to walk up a down escalator.

    I think this is the main reason why Americans have become so poor economically. Why store your fiat currency when basically anything you buy is worth more than the dollars you have. How many of you know people that actually saved their own downpayment for a house, without contributions from family? It's becoming almost unheard of. My zip code requires about $100,000 in savings just to make the bare minimum of a 20% down payment (on a small 1 bedroom apartment mind you). It's a tough sell to a young person who's trying to actually enjoy life.

    I see our economy as being built on this inflation, and debt. People spending every penny they make, as fast as they make them. Why hold that fiat, it's going to be worth less the longer you hold it, even cheap Chinese made plastic goods are worth more than that dollar you were considering stashing away. Oddly enough, I see the good side of this. By spending money on shit we don't need, we've inadvertently made China a 1st world nation, and somehow also kept our own economic system growing (for the rich that is). We work harder because we wanted that new iPhone, and that car we borrowed money to buy, and if we don't make the payments we'll lose it. This is what drives our economy. The downsides of this is so many people not being able to figure out why they're miserable, while missing out on life by chasing that next toy. At the same time it's slowly improving the world and providing economic opportunities for others.

    Now, Circling back to Cryptocurrencies. They are essentially deflationary since some is inevitably lost to people losing their keys/passwords all the time. I think by nature, they will always be deflationary and go up in value. Thus, people like me that HODL choose not to spend money on cheap Chinese shit, and save knowing next year I'll be able to buy a lambo if I pass on the range rover today (I def don't HODL that much BTW, just using it as an example). I don't think our economy could function in a cryptocentric currency system. Inflation, IMHO isn't such a bad thing looking at the big picture, and probably essential for modern economies to continue to grow. They'll have to figure this inflation/deflation problem out before Crypto is ever successful as a mainstream currency. Not good news for the next generation of HODLers. Why would anyone actually spend a dime on something that wasn't absolutely essential, when it's guaranteed that dime will be worth a quarter in the near future.
     
    Last edited: Jan 30, 2018
  7. misteraven

    misteraven Administrator

    Joined: May 7, 1999 Messages: 8,901 Likes Received: 376
    Definitely agree with all your saying. I'd go on to say its engineered as such. We live in a debt based economy. That's not a figure of speech or cliche, but is actually the model our economy is built on. Crazy part is that its engineered to be impossible to ever pay off and is only healthy when more debt is accumulated. Saving money is actually a negative since one of the key benchmarks in the overall health is a stable high market velocity, which means everybody needs to keep spending money or the system falls in danger of collapse. This is part of why interest rates have been held low fo so long. Its to discourage savings and help keep market velocity high (a fancy word for spending money as fast as you can get your hands on it). The Fed lends banks money for virtually no interest and in some case borrows it back via a third party at a slightly higher interest rate and then all that gets dumped into the economy so we can keep shifting it all over the place accumulating additional debt along the way.

    And no doubt that most people are miserable. Seems almost like a drug addiction chasing that next high that becomes increasingly elusive and never lasts quite as long. Recall taking note on the subway and streets when taking my kids to work, just how miserable everyone looked. Profound difference from the general disposition of the people where I now live.

    In regards to your last paragraph, the interesting thing to me are the early adopters that managed to stack up enough crypto that they can live a good (if not awesome) life selling back small increments while the bulk of their crypto wealth appreciates at a rate faster than the value of what they're cashing in. That's a hell of a nice spot to be in and I do believe there is still opportunity to pull this off.

    Kudos to you @Mercer for having your shit together.
     
  8. Mercer

    Mercer Moderator Crew

    Joined: May 2, 2007 Messages: 10,649 Likes Received: 1,064
    Currently, very happy the portfolio is ETH heavy. Ether was 51% of my portfolio last week, haven't moved anything and it's at 61% today.

    Found this article today, stroked my brains own confirmation biases pretty well.
     
  9. misteraven

    misteraven Administrator

    Joined: May 7, 1999 Messages: 8,901 Likes Received: 376
    Wild ride these last few days. Assume everyone is HODLing like a motherfucker.

    Wish I had like $50k to be dropping right freakin now.

    Anyhow, how's everyone looking? Thought I was slick when I dropped $500 at $9.9k. Saw my portfolio balance out later that day and then more FUD sent shit way back down to new lows.

    Honestly seeing this as an opportunity to make up for lost time. Anyone else going in?

    Thoughts?
     
  10. theprotester

    theprotester Moderator Crew

    Joined: Dec 8, 2006 Messages: 10,950 Likes Received: 887
  11. Mercer

    Mercer Moderator Crew

    Joined: May 2, 2007 Messages: 10,649 Likes Received: 1,064
    I'm suffering through only tripling last year's investment now. Someone pass me a kleenex.

    On a serious note, outside of the bitcoin I bought in November 2016, I got in on the first major ETH pump up to $380 ish in June last year. Dropped about 8 grand (my entire savings) starting in May as it rose from $180, then $250, then $300. I watched it rise to almost $400 in June then boom, flash crash. It literally dropped to less than $10 in seconds. It bounced back up to like 300 right after but I was shook. I held as it slowly worked it's way down following the flash crash, then, my dumbass panic sold at around $150 before it bounced fafter dipping to $130. I took a loss of close to $4000 on ETH. From what I understand now, my story isn't too uncommon. You're more likely to get into this shit during a major run up, it just takes balls of steel to not panic sell.

    As any good gambling addict will tell you, the only way to make your losses back it to keep rolling the dice, so I put back what I had left back in in July, and dropped another $5 grand or so leading up until the August boom. Till this day that panic sell was one of the dumbest decisions I've ever made, my girl was pissed until it started pumping back up and I admitted I put a bunch more back in again, lol. I'm only sharing this painful, and embarrassing story because I'm sure there's someone on here with a panic sell gnawing away at the back of their head. If I wouldn't have panic sold I'd be around $15,000 ahead of where I'm at right now. That's like a fully loaded Hyundai Santa Fe with 10,000 miles on it.

    Moral of the story, don't buy high, then sell low. If anything take profits after a major pump to cover your initial investment, then these dips are easy to shrug off and feel like losing monopoly money.
     
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  12. theprotester

    theprotester Moderator Crew

    Joined: Dec 8, 2006 Messages: 10,950 Likes Received: 887
    I'm just putting it out of my mind, it's a lot of money for me but I'm surviving fine without it
    Hodl
     
  13. theprotester

    theprotester Moderator Crew

    Joined: Dec 8, 2006 Messages: 10,950 Likes Received: 887
    I bought low and am still nowhere near in the red anyway

    Just greedy
     
    misteraven likes this.
  14. misteraven

    misteraven Administrator

    Joined: May 7, 1999 Messages: 8,901 Likes Received: 376
    When did you get down, if you don't mind my asking?
     
  15. misteraven

    misteraven Administrator

    Joined: May 7, 1999 Messages: 8,901 Likes Received: 376
    I'm really seeing this as an opportunity to make up for lost time. I'm now pretty well into the red, but not concerned. Honestly wish I had $50k to drop right now.

    Where do you think the floor is? Honestly thought it was at about $10k. Now wondering if we'll see it kiss $3.5 - $5k which seems to represent where it was before the crazy run up.

    Any shit coins you looking at right now? Really want to start putting $100 towards a handful of sub $0.01 altcoins just to see if anything runs up.

    Also, do you keep your crypto in action? In other words do you keep open sell orders and adjust according to what you see happening daily?
     
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