Cryptocurrencies

[tede02]

Visa and Mastercard have got to be pretty nervous. 

[Castanza]

39 minutes ago, SharperDingaan said:

Whether digital, or paper, the country fiat will be backed by the CB and freely exchangeable on a 1:1 basis. You will just have 2 accounts - the account at your bank, and the wallet at the CB. Most will pay using their wallet, simply because it is faster, cheaper, and the amounts are guaranteed. Existing payment plumbing rapidly displaced over time.

When a vendor can accept CBDC as legal tender, vs sh1te coin, the sh1te coin becomes worthless. Of course, if the market believes the coin has value (BTC, ETH, etc.), the outcome might be different - but what the participants think is irrelevant.   

Comes back to the great winnowing, and ability to short. We'll all learn something new

SD

To pick your brain:

Is the current "plumbing" so bad that it needs to be replaced? What are the primary factors of limitation when it comes to transaction speed? I use tap pay and it's pretty much instant. If I transfer money from one of my bank accounts to another, it's pretty much instant as well. If I choose to pay off my credit card early, Capital One will credit me the amount immediately until my payment posts the following day. 

If transactions become so efficient and fast, would this also subject them to real time value change? In other words, I don't worry about inflation or the value of the dollar when I'm checking out a Home Depot. However, if it's possible for a currency to be so efficient that we have to worry about value changes in real time; I wonder if that is really a benefit or not? I guess you could argue that a global currency would be extremely stable and the value wouldn't really change much? 

 

 

39 minutes ago, SharperDingaan said:

 

 

 

 

[SharperDingaan]

Existing payment rails are truly sh1te, and work only because we have laarnt how to make them work - patches upon patches, upon patches. CBDC is essentially everyone/everything in the country with an account at the same place, a payment is simply debit account X, credit account Y. Same output; just done very, very differently. Cheaper, faster, more reliable, more secure, yada, yada ...

Fixed at 1 diigital fiat ($CAD) = 1 paper fiat ($CAD), there is zero value change. No different to your bank account today, where 'digital/cash conversion' takes place at either the ATM or tellers desk. CBDC has been live tested (eKrone) for some time now, and acceptance has been demonstrated to not be an issue.

FX is problematic because there are different flows; tourism, trade payments, capital, etc. It becomes a lot simpler if capital flows can be shifted to a RBDC (Reserve Currency). The days FX rate then becomes the ratio that settles the days trade and tourism flows at zero. RBDC mechanics a work-in-progress

There will still be payment intermediaries, but now they have to prove their value add. No getting paid anymore for simply making a payment happen, or being an order taker. Paying for alpha, is not a bad thing.

SD

 

Edited May 6, 2021 by SharperDingaan

[aws]

It seems like yesterday that I was thinking it was absurd that Tesla had a higher market cap than Ford.  Today, Elon's favorite meme crypto Dogecoin, passed Ford in market cap.  It doesn't matter much of course, but I just wanted to mention it for posterity's sake just in case this happens to be the moment of peak ridiculousness.

[Jurgis]

How is Dogecoin different from any other crypto coin?

[JRM]

7 hours ago, Jurgis said:

How is Dogecoin different from any other crypto coin?

There is no hard cap on the number of doge coins that can be mined.  

[Fly]

19 hours ago, Jurgis said:

How is Dogecoin different from any other crypto coin?

It is not that different technically speaking, but it has a wide audience of twitter/YouTube/social media followers who talk about it. It is also very "cheap" in terms of price per coin, which I suppose has a psychological attraction vs buying a tiny fraction of a Bitcoin. "I bought 1,000 Dogecoins!" sounds better than "I bought .00464 Bitcoin!"

Edited April 18, 2021 by Fly

[Castanza]

On 4/14/2021 at 5:44 PM, SharperDingaan said:

Existing payment rails are truly sh1te, and work only because we have laarnt how to make them work - patches upon patches, upon patches. CBDC is essentially everyone/everything in the country with an account at the same place, a payment is simply debit account X, credit account Y. Same output; just done very, very differently. Cheaper, faster, more reliable, more secure, yada, yada ...

Fixed at 1 diigital fiat ($CAD) = 1 paper fiat ($CAD), there is zero value change. No different to your bank account today, where 'digital/cash conversion' takes place at either the ATM or tellers desk. CBDC has been live trailed (eKrone) for some time now, and acceptance has been demonstrated to not be an issue.

FX is problematic because there are different flows; tourism, trade payments, capital, etc. It becomes a lot simpler if capital flows can be shifted to a RBDC (Reserve Currency). The days FX rate then becomes the ratio that settles the days trade and tourism flows at zero. RBDC mechanics a work-in-progress

There will still be payment intermediaries, but now they have to prove their value add. No getting paid anymore for simply making a payment happen, or being an order taker. Paying for alpha, is not a bad thing.

SD

 

Thanks for sharing 

[TwoCitiesCapital]

On 4/17/2021 at 8:38 PM, Fly said:

It is not that different technically speaking, but it has a wide audience of twitter/YouTube/social media followers who talk about it. It is also very "cheap" in terms of price per coin, which I suppose has a psychological attraction vs buying a tiny fraction of a Bitcoin. "I bought 1,000 Dogecoins!" sounds better than "I bought .00464 Bitcoin!"

Would also add there is no designed utility. It wasn't created to serve a purpose or fulfill a need - it was created only to show how stupid the proliferation of shit-coins was in 2017 and here we are ...

Edited May 3, 2021 by TwoCitiesCapital

[tede02]

Question - Aren't exchanges, like Coinbase, in conflict with the concept of peer to peer/decentralized finance? Aren't these exchanges very much centralized and just more big financial intermediaries that crypto was supposed to displace? 

Edited April 19, 2021 by tede02
edit text

[rkbabang]

58 minutes ago, tede02 said:

Question - Aren't exchanges, like Coinbase, in conflict with the concept of peer to peer/decentralized finance? Aren't these exchanges very much centralized and just more big financial intermediaries that crypto was supposed to displace? 

In short: yes.  They serve a purpose for buying crypto with fiat by bringing buyers and sellers together in a marketplace, but they are centralized trusted 3rd party services.  You should not store your crypto there.  Import your crypto for trading and remove your crypto to your own wallet for storage.  I think long-term there will be a move to a more decentralized solution for crypto-fiat exchanges or maybe as more people use crypto there will not be as much of a need for crypto-fiat exchanges at all.  We are still in the early innings, think the internet in the 1980s.

 

[tede02]

I appreciate the comment. The internet analogy resonates with me. I really struggle to see where this is going beyond what looks like wild speculation. But I'm sure many people felt the same in the mid to late nineties regarding the internet. I've spent a fair amount of time reading about crypto to keep an open mind and understand it better. The more I learn the more questions I have. Digital central bank currencies and good old fashion regulation appear to pose some real hurdles. But the blockchain technology itself is interesting and seems to have utility even outside of finance.  

 

 

[SharperDingaan]

Blockchain/smart-contracts are the invention, everything else is just an application of the invention. Hurdles are par for the course, and ultimately 'bend' over time - to go with the flow.

SD

 

[Castanza]

5 hours ago, tede02 said:

I appreciate the comment. The internet analogy resonates with me. I really struggle to see where this is going beyond what looks like wild speculation. But I'm sure many people felt the same in the mid to late nineties regarding the internet. I've spent a fair amount of time reading about crypto to keep an open mind and understand it better. The more I learn the more questions I have. Digital central bank currencies and good old fashion regulation appear to pose some real hurdles. But the blockchain technology itself is interesting and seems to have utility even outside of finance.  

 

 

You can get paid to learn! At least that’s what Coinbase is saying. 

[K2SO]

On 3/29/2021 at 2:24 PM, Krapdivad said:

What do people think of taking on debt, such as a home equity loan to put into equities or cryptocurrencies now?

To buy reasonably valued equities with a secure FCF yield, and hopefully dividends that can help you finance the debt... maybe. Depends on your situation, experience, and risk tolerance. 

Crypto? Great idea if you feel like playing Russian roulette with your home equity. In other words, horrible idea. 

[hasilp89]

I’ve listened to a few interesting podcasts on blockchain technology and they got me thinking. 
I’m not a tech person so am stepping outside of my zone here. I find the use cases for these decentralized networks quite interesting and reasonable.

Am I understanding something like ethereum correctly when I say it is an open source network where transactions happen with no central body that can change the rules of how it works? 

how you value something like that. Yes it doesn’t produce cash flows but the network itself has value if people can use it for personal and business needs and therefore the currency attached to it must have some value.

if you would expect the usage on said network to increase nonlinearly over the next 10 years would you not also expect the value of the currency to do so as well?

then I’m asking what is the best network - why won’t millions be created - well there would be typical network effects and first mover advantages so the early ones that scale and work well should gain traction?

Interested to hear from someone who actually understands this stuff.

 

 

Edited May 4, 2021 by hasilp89

[SharperDingaan]

You need to distinguish between the native coin (ETH), and the apps running on it.

ETH benefits from network effect, but greater volume and gas usage dilutes over more coin issued. ETH was designed to be 'used' - not as an investment, and it does that very well. It is the deevelopers, coders, etc,  building the apps that use ETH - that make most of the money. 

The app itself (running on ETH) is like any other businress, when succussfull - the owners make most of the money. When unsuccessfull the supporting infrastructure (developers, coders, consultants) makes the money. As 90%+ of apps will ultimately not be successfull; to make money from this - you really need to be a developer/coder. 

Very different if a existing business replaces existing infrastructure with a ETH app. The cost savings flow immediatly and directly to the owners of the business - and they are material. Benefits take longer to arrive, but are both larger and more enduring - if ETH is bypassed entirely, in favour of the scaleable and faster hyperledger application. Only the big kids play in the big sandbox, the small/medium kids play with ETH. 

As an 'investment', the choices are really either BTC of a crypto ETF. ETH is used primarily as a hedgeable diversifier within the crypto 'asset class'. There have been some successes amongst the existing small/medium private businesses, but it is invitation only.

Good luck.

SD

 

Edited May 4, 2021 by SharperDingaan

[Simba]

DOGECOIN

What started off as a meme, is now close to a $100B currency. What is everyone's thoughts of DOGE as an investable asset class. Is it prudent to start allocating capital to DOGE? A buy the dip opportunity? It looks like DOGE is slowly becoming the new BITCOIN. What are everyone's thoughts? LONG? SHORT? STAY ON THE SIDELINES? 

I think the biggest issue is the 5% inflation - that affects the share count just like SBC. 

What is Dogecoin? Dogecoin features the face of the Shiba Inu dog from the "Doge" meme as its logo and namesake. It is used as a tipping system

Supply: Initial 100 Billion coins, growing at 5 billion a year (5% inflation) - i.e. will take 20 years to double supply (currently 129.5B dogecoins in supply)

Timeline:

• Dec 2013: Dogecoin was born
• Jan 2018: Dogecoin hits $2B market cap, peaking at $0.017 during the height of the crypto bubble
• July 2020: Doge gets hype on Tiktok and price starts to spike 
• Jan-March 2021: Elon/Snoop Dogg/Gene Simmons encourage Doge
• April 2021: Coinbase IPO
• May 2021: Dogecoin hits $85B+ market cap

Price Statistics:

• Dogecoin Price: $0.68
• Market Cap: $88.0B
• 52-Week Low / High: $0.002277 - $0.7376

Edited May 8, 2021 by Simba

[Spekulatius]

John Hampton posted something interesting on Twitter. Type in the Google window:

“ How to buy “ and see what comes up.

Here is mine:

 

 

Edited May 8, 2021 by Spekulatius

[SharperDingaan]

Doge is a meme, not an investment. Currently not shortable, but it is only a matter of time - there are just not enough bunnies in the trap yet

SD

Edited May 9, 2021 by SharperDingaan

[Simba]

39 minutes ago, SharperDingaan said:

Doge is a meme, not an investment. Currently not shortable, but it is only a matter of time - there are just not enough bunnies in the trap yet

SD

I understand DOGE is a meme investment with no inherent value, but I still feel there is money to be made, be it long or short.

What's the difference between bitcoin, dogecoin and gold? To me BTC / DOGE are nearly interchangeable save for the network effects of bitcoin and the non constant dilution of DOGE? 

 

Edited May 9, 2021 by Simba

[rkbabang]

Dodge is like BTC except for the dilution and aluminum is like gold except for how much of it there is.

[TwoCitiesCapital]

5 hours ago, Simba said:

I understand DOGE is a meme investment with no inherent value, but I still feel there is money to be made, be it long or short.

What's the difference between bitcoin, dogecoin and gold? To me BTC / DOGE are nearly interchangeable save for the network effects of bitcoin and the non constant dilution of DOGE? 

 

The unlimited inflation cap and 10,000 DOGE mined every minute vs 900 BTC mined per day and a hard cap of 21 million is a VERY, VERY significant difference when it comes to potential price appreciation as a result of network growth. 

[Spekulatius]

6 hours ago, rkbabang said:

Dodge is like BTC except for the dilution and aluminum is like gold except for how much of it there is.

It is easier to create new cryptos than it is to create new elements. If you are a celebrity (Kardishan) or an organization (think NFL) or a company (Tesla) to name some examples, is there really a downside to create to create your own crypto currency and promote the hell out of it?

The technical barriers to entry are nil. Dodge coin has proven to get to $100B in market value. That’s larger than the entire US airline industry in terms of market cap.

Edited May 9, 2021 by Spekulatius

[Jurgis]

2 hours ago, Spekulatius said:

The technical barriers to entry are nil. Dodge coin has proven to get to $100B in market value. That’s larger than the entire US airline industry in terms of market cap.

US airlines should accept Doge coins for tickets. Their stonks would go , they could buy more Doge coins and use them to buy more of their stonks. This would be Space X on steroids.