BITCOIN

thegentleway

ZingPowZing said:

Atlas234 said:

ZingPowZing said:

What is the difference between losing money in bitcoin and losing money?
Im thinking none but I’m ready for the masterclass.

Much the same as when the stock markets are down, you don't lose anything until you sell your investment

Yes of course you do. 
“You don’t lose anything until you sell your investment,” is the same as saying You don’t gain anything until you sell your investment; in which case someone ought to review Warren Buffet’s credit rating.

How Crystallization Works

When an investor buys a capital asset, an increase (or decrease) in the value of the security does not translate to a profit (or loss). The investor can only claim a profit (or loss) after he has sold the security. Selling the security at a profit is referred to as crystallizing a capital gain.
https://www.investopedia.com/terms/c/crystallization.asp

lozzy1965

ZingPowZing said:

Yes of course you do. 
“You don’t lose anything until you sell your investment,” is the same as saying You don’t gain anything until you sell your investment; in which case someone ought to review Warren Buffet’s credit rating.

Err, actually, gain and loss usually refer to monetary profit, so you don't lose, or gain anything until you sell your investment, or until the underlying asset 'goes bust'.  It gets a bit confusing when the 'monetary asset' is a new form of money I guess - as in BITCOIN rather than other blockchain use assets.
Warren Buffet's credit rating is based on the fact that he has so much invested and in enough of a wide range of assets that if he does go bust then the world is about to end.

[Deleted User]

But you are still richer or poorer according to the fluctuating value of the asset. If you have half your money under the mattress and half in bitcoin, it makes no difference overall which half you lose, you’re worth exactly the same either way. 

thegentleway

ZingPowZing said:

But you are still richer or poorer according to the fluctuating value of the asset. If you have half your money under the mattress and half in bitcoin, it makes no difference overall which half you lose, you’re worth exactly the same either way. 

Sounds like you're talking about net worth as opposed to profits.

Thrugelmir

Atlas234 said:

ZingPowZing said:

What is the difference between losing money in bitcoin and losing money?
Im thinking none but I’m ready for the masterclass.

Much the same as when the stock markets are down, you don't lose anything until you sell your investment

Hence the expression. Stock markets can remain irrational longer than you can stay solvent. 

TimSynths

Well that was a bit brutal! I've been through this before and its never nice but i'm not as panicked as I was the first time.

HansOndabush

Michael Saylor and Microstrategy imploding; pass the popcorn.

[Deleted User]

thegentleway said:

ZingPowZing said:

But you are still richer or poorer according to the fluctuating value of the asset. If you have half your money under the mattress and half in bitcoin, it makes no difference overall which half you lose, you’re worth exactly the same either way. 

Sounds like you're talking about net worth as opposed to profits.

Yes, I suppose so, Gentleway. I think it a more useful measure.

If all your money, say £1 million, was invested and the value of those investments should fall then - I hate to break it to some of you - you would no longer be a millionaire. But you can sit there thinking you are until you sell if it helps.

When you come to sell your investment nobody (bar your tax accountant) cares at what price you bought in. Just as you had no interest then in how much the seller paid for the same investment. The only thing that counts to anyone else is the current price.

 If you lose £20,000 today "on paper", that is as real as a tax-bill or losing a suitcase with £20,000 in it, or a small inheritance. We would react very differently but there is no quantifiable difference. 

thegentleway

ZingPowZing said:

thegentleway said:

ZingPowZing said:

But you are still richer or poorer according to the fluctuating value of the asset. If you have half your money under the mattress and half in bitcoin, it makes no difference overall which half you lose, you’re worth exactly the same either way. 

Sounds like you're talking about net worth as opposed to profits.

Yes, I suppose so, Gentleway. I think it a more useful measure.

If all your money, say £1 million, was invested and the value of those investments should fall then - I hate to break it to some of you - you would no longer be a millionaire. But you can sit there thinking you are until you sell if it helps.

When you come to sell your investment nobody (bar your tax accountant) cares at what price you bought in. Just as you had no interest then in how much the seller paid for the same investment. The only thing that counts to anyone else is the current price.

 If you lose £20,000 today "on paper", that is as real as a tax-bill or losing a suitcase with £20,000 in it, or a small inheritance. We would react very differently but there is no quantifiable difference.

net worth is just a snap shot of your net economic position which does indeed depend on the current price. But who cares about net worth? What difference does it make if your investments have gone down by £20k today if you aren't going to sell them for x number of years? What matters it the price when you sell, that will determine how much money you make/lose and what you can do with it. Money isn't for looking at!

Malthusian

ZingPowZing said:

 If you lose £20,000 today "on paper", that is as real as a tax-bill or losing a suitcase with £20,000 in it, or a small inheritance. We would react very differently but there is no quantifiable difference. 

There is a difference between a loss of £20,000 in a diversified non-geared investment in the global stockmarket, that will recover providing the world economy hasn't entered a new Dark Age, and a loss of £20,000 in a crypto token, that will recover if and only if you can find a bro willing to buy your tokens off you for £20,000 higher than the current value. (Which only leaves you back where you started.)

Unless of course you are a bro who believes that the possibility of all global stocks collapsing is as likely as the possibility of being caught on the sharp end of the mathematics of a zero-sum game. In which case carry on stobbling your chunkbuckets and BMFRing and whatever other made-up words are currently being bandied about on Reddit to pretend that Bitcoin is different from every other zero sum game that has gone before.

You asked "What is the difference between losing money in bitcoin and losing money", that's the difference. If you meant to ask "What's the difference in £s between losing £20,000 in Bitcoin and £20,000 in shares" that's a different question.