BITCOIN

Scottex99

Could be right but I highly doubt they are taking that gamble on the fallout of BTC going to zero without doing their own DD. Despite the massive amount of fees on offer. Risk/reward right.

Similar to getting involved in a less than 2 decade old industry for me.

It can be dangerous to hold assets in crypto yes, but its also highly discouraged. Not your keys not your coins.

Plus risk reward again. Your assets aren't protected the way they would be in HL or whatever platform.

But you also make 600% this year holding Solana.

I don't particularly like just bringing it back to gains or returns to prove points as its kind of futile but I was thinking about optics or benchmarks. We can of course just agree to disagree and I would ALWAYS advocate for proper bankroll management (especially to my friends/family looking for info on the space).

At what point do we a declare a "winner"?

When BTC is dead and trading at $100? Buy the Dip lol

When BTC is at $100k? Did you sell though, who did you have to convince to buy from you to make that trade haha

MacPingu1986

User232002 said:

Thanks. This is only the 300th time this has been posted in this thread. Just because you keep repeating something doesnt make it correct. 

Many crypto protocols are incredibly profitable businesses that have yearly revenue in the billions with almost zero overheads. 

MacPingu1986 said:

Whilst you've made a substantial gain so far, my own experiences with cryptocurrency (not bitcoin) resulted in over an 80% loss. Fortunately it was only a very small part of my savings and investments but many others have faired far worse and as its zero sum without others making losses you *can't* make your gains.

I found the problem....

No, no no, you're misunderstanding. Bitcoin *isn't* a business, or rather its no more a business than buying sterling is. When you buy a bitcoin you are buying a piece of currency that you can sell at a later date. There's no underyling "business", no rights to other assets, no rights to infrastructure on a winding up, no other revenue streams, it's a currency. That's it. Currency trading is zero sum - in order for you to win, someone else must lose.

Secondly - your post very glibly sidesteps a real-life example (me) being a cryptocurrency loser because it wasn't bitcoin. Fair enough, but your post above (and many other posters) speak very highly about investing into cryptocurrencies generally - indeed your post above talks about how profitable "many crypto protocols". You can't responsibly say this whilst at the same time dismissing anyone losing money on cryptocurrency as being a fool because they didn't pick the right one. There's real people at the other end of this.

Ultimately in my case, it didn't matter. It was a tiny part of a wider portfolio, chalk it up to experience and move on.

 Many others are not so lucky - when you're posting online pumping up cryptocurrency investments as being incredibly profitable and that we need to get in big, NOW, you need to remember that there are real people at the other end reading these posts - and we owe it to others to behave responsibly and not irresponsibly promote incredibly high risk assets in a sector that's full of pitfalls, traps and scams for the unwary, with little to no regulatory protection.

Cryptocurrency trading is only suitable for those willing to take very high risks, with very limited regulatory protection and who already have a very sophisticated knowledge or interest in that specialist market. That's why promoting it on a general mainstream money saving board is understandably going to be met with a critical eye.

Scottex99

We’re all adults here, you’d probably find the odd tongue in cheek comment about how rich we’re making it on the pro-crypto side but nobody is angling to get their bags pumped by a £100 buy from John on the MSE forum.

Price is just one aspect and probably the most boring one too.

A critical eye is fair enough, that’s one of the reasons I like the thread, calling it a ponzi isn’t IMO.

Everyone is free to make their own choices and figure out their own tolerance to risk, I guess I told you so’s will come either way 

Aegis

Scottex99 said:

We’re all adults here, you’d probably find the odd tongue in cheek comment about how rich we’re making it on the pro-crypto side but nobody is angling to get their bags pumped by a £100 buy from John on the MSE forum.

Price is just one aspect and probably the most boring one too.

A critical eye is fair enough, that’s one of the reasons I like the thread, calling it a ponzi isn’t IMO.

Everyone is free to make their own choices and figure out their own tolerance to risk, I guess I told you so’s will come either way 

I'm sure Bernie Madoff would have hated having his investment business called a Ponzi scheme too, and would undoubtedly have shouted to anyone listening that it most definitely wasn't one. It was.  Fact is, all cryptocurrencies are functionally identical to chain letters or pyramid schemes, in that price rises come approximately logarithmically from increasing the user base.  At best, they end up being equivalent to Multi-Level Marketing schemes, where there is some argument of utility, but it's very much ancillary to the recruitment of new distributors and converts. Eventually you get to a point where there are no more users coming in to drive the price up, and at that point people realise that the gravy train has come to an end and the price collapses.

MeteredOut

As usual with these threads across the internet, as soon as a statement challenged, the ad-hominem attacks appear. And, in the noise, the underlying question "What percentage of people who have ever owned bitcoin are in profit, or have sold with a profit?" remains unanswered.

Scottex99

Aegis said:

Scottex99 said:

We’re all adults here, you’d probably find the odd tongue in cheek comment about how rich we’re making it on the pro-crypto side but nobody is angling to get their bags pumped by a £100 buy from John on the MSE forum.

Price is just one aspect and probably the most boring one too.

A critical eye is fair enough, that’s one of the reasons I like the thread, calling it a ponzi isn’t IMO.

Everyone is free to make their own choices and figure out their own tolerance to risk, I guess I told you so’s will come either way 

I'm sure Bernie Madoff would have hated having his investment business called a Ponzi scheme too, and would undoubtedly have shouted to anyone listening that it most definitely wasn't one. It was.  Fact is, all cryptocurrencies are functionally identical to chain letters or pyramid schemes, in that price rises come approximately logarithmically from increasing the user base.  At best, they end up being equivalent to Multi-Level Marketing schemes, where there is some argument of utility, but it's very much ancillary to the recruitment of new distributors and converts. Eventually you get to a point where there are no more users coming in to drive the price up, and at that point people realise that the gravy train has come to an end and the price collapses.

You’re wrong, In my humble opinion.

But let’s agree to disagree and save ourselves the time and energy.

I think it’s absolutely crazy not to have some exposure to crypto at this present time, at whatever % of your overall portfolio.

Each to their own

Aegis

Scottex99 said:

Aegis said:

Scottex99 said:

We’re all adults here, you’d probably find the odd tongue in cheek comment about how rich we’re making it on the pro-crypto side but nobody is angling to get their bags pumped by a £100 buy from John on the MSE forum.

Price is just one aspect and probably the most boring one too.

A critical eye is fair enough, that’s one of the reasons I like the thread, calling it a ponzi isn’t IMO.

Everyone is free to make their own choices and figure out their own tolerance to risk, I guess I told you so’s will come either way 

I'm sure Bernie Madoff would have hated having his investment business called a Ponzi scheme too, and would undoubtedly have shouted to anyone listening that it most definitely wasn't one. It was.  Fact is, all cryptocurrencies are functionally identical to chain letters or pyramid schemes, in that price rises come approximately logarithmically from increasing the user base.  At best, they end up being equivalent to Multi-Level Marketing schemes, where there is some argument of utility, but it's very much ancillary to the recruitment of new distributors and converts. Eventually you get to a point where there are no more users coming in to drive the price up, and at that point people realise that the gravy train has come to an end and the price collapses.

You’re wrong, In my humble opinion.

But let’s agree to disagree and save ourselves the time and energy.

I think it’s absolutely crazy not to have some exposure to crypto at this present time, at whatever % of your overall portfolio.

Each to their own

You've said this many, many times, but I still haven't seen a reason to hold crypto from a fundamentals perspective. Largely because I don't believe any such fundamentals exist.  So to you I will continue being crazy.

User232002

MeteredOut said:

As usual with these threads across the internet, as soon as a statement challenged, the ad-hominem attacks appear. 

As usual with these threads across the internet, as soon as [actual quantitative data is presented], the users [conveniently find a reason to disengage from the discussion]. 

MeteredOut said:

the ad-hominem attacks 

You made a really rather obvious error between A|B and B|A. This is Statistics 101. Thats not hyperbole; Bayes Theorem is literally taught in Stats 101 and this will be one of the first things that will be discussed. Its the type of error that nobody who has actually studied Statistics at a reasonable level would make, and so it immediately identifies you as being someone that lacks technical knowledge here.

As it said, its not a case of 'its not quite right, but its near enough.' Its flat out wrong. And its very relevant to casual observers of this thread that the people dismissing Bitcoin are not actually technically capable. 

MeteredOut said:

And, in the noise, the underlying question "What percentage of people who have ever owned bitcoin are in profit, or have sold with a profit?" remains unanswered.

Do you really believe it to be 50%? Or even worse, under 50%? Its a rather trivial thought experiment to show that its > 50%.

Person A buys Bitcoin at $10k
Person B buys Bitcoin from A at $70k
Person C buys Bitcoin from B at $44k (current price).

Then, A is in profit, B is at a loss and C is break even whilst looking for a greater fool to bag dump on. This is the ponzinomics that many on this thread would have us believe exist in Bitcoin. However, if we roll this clock back in time, we begin to see the problem with this. If we divided all the prices by 10, but current price is still $44k then both A and C are in profit, whilst B locked in a loss. Thus the percentage of wallets in profit is now 67%. 

This occurs simply as a result of price moving upwards. If the price of Bitcoin has gone up, it doesn't make any sense to say that the mean average returns of someone buying Bitcoin is 0. It has to be greater than zero. And if the mean average return of an underlying asset is > 0, then the number of people in profit from that asset will be > 50%. Further, the longer the asset exists and continues to go up in price, the closer to 100% that number becomes. TL;DR This shouldn't be rocket science - its exactly what happens in the stock market and we see it every time in Bitcoin bull runs that the number of wallets in profit goes up. For the avoidance of doubt, this even includes those wallets that have locked in their loss long ago never to touch Bitcoin again. Because the number of wallets that have done this is fixed and as price appreciates it can only convert currently underwater wallets in to profitable wallets and therefore the percentage must trend upwards. In our example, if Bitcoin goes to $50k and C sells at a profit to D and then Bitcoin goes to $60k, we now have 75% of wallets in profit. Mathematically, if price is going up, the number of people in profit is an increasing function.

You might want to argue that the long term return of Bitcoin is 0, even if the current observable mean return is > 0. Its a frequent belief of many here that Bitcoin will eventually crash, go to zero or whatever else and at that point people will realise that it was a zero sum game. The problem with this argument is threefold;

(1) If you assume a mean return of zero for Bitcoin at inception, it gets pretty impossible to argue for any standard deviation value that would get us to the price levels that we have observed in a random walk. Or, if you put in a reasonable value for the standard deviation, the outcome we are witnessing is something almost impossible. Occams razor leads us to conclude then that the mean can't be zero.

(2) When you model ponzi's (yes, this is done), one of the variables that makes a crucial difference is the interest rate paid out to the participants. Pay 5% and your ponzi will last longer than one that pays 15%. Well, Bitcoin has been paying out a CAGR of 100% for 13 years. That should not be mathematically possible, which again must lead to the conclusion that the premise (its a ponzi) is flawed.

(3) Ponzi's implode quickly. They do not go through cycles and reinflate over and over again. There is no model for a reinflating ponzi in a closed monetary system because untapped capital decreases geometrically. Now, you might, might be able to argue that the first say two Bitcoin cycles were small and thus the awareness of the third cycle constituted an increased in untapped capital for the ponzi. But really, in 2017 Bitcoin was mainstream news and in 2021 the worlds richest man was on prime time TV shilling a dog token. I think the argument is dead on this ground alone, but if we hit another new ATH you have to start to question your premise. 


I'm also ignoring, in this post, the rather obvious argument that its not a ponzi because it provides value, as has already been pointed out several times in the last few pages. My point here is that its simply mathematically very difficult to fit a model that explains Bitcoin price that fits in with the beliefs many people have here. When your model doesnt fit the facts, its time to change the model, not the facts.

Cus

'Person A buys Bitcoin at $10k
Person B buys Bitcoin from A at $70k'

So person A now has more rubbish $, but A used to own a bitcoin but now doesn't have it anymore. And it would cost him $70k if he wanted it back. So is he really up?

User232002

Absolutely not in my opinion. But sometimes you need a measuring stick, even if its flawed.

There is a number in my head where I sell some Bitcoin. You can attack the currency in other, more traditional, ways where you can still be wrong and make money.