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  • darren232002
    darren232002 Forumite Posts: 299
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    edited 10 April 2021 at 11:43AM
    benbay001 said:
    But I would strongly encourage people to look in to this space because it will be the greatest wealth creation event of my generation. Its literally the internet version 2.0.
    How can crypto generate wealth? The only thing it enables that cannot be done with a credit card is the untraceable purchase of things that are illegal. Fantastic.
    "In the age of information, ignorance is a choice."

    Did you hear me say that I'm currently getting 100%+ APY on some of my money in crypto? Paid and compounded whenever I want (hourly if I choose). I think that counts as generating wealth.

    I can loan out my crypto in decentralised finance protocols and those networks will pay me 80% of the profits they make from using my capital. Your bank currently has access to essentially free money from the central bank, charges people 3% (mortgages), 7-10% (personal loans) or 20%+ (CCs) and yet gives you 0.1% interest... All that profit the banks make - crypto is going to eat it all.

    Other crypto protocols charge fees for their use and give a portion of these fees back to the owners of the token like a dividend. Some of these protocols are on course to generate billions of $'s in transaction fees this calendar year.

    An automated yield strategy vault will move your money around and get the best return on it via code. That's what a money manager does, except this is open to everyone and charges a fraction of the cost of a managed fund all whilst giving returns that traditional finance thinks can only be achieved in fantasy land.

    In a few years, we will tokenise land & houses as NFTs and enable the transaction of land via smart contracts and oracles. Estate agents fees and solicitors costs trend to zero because it can all, largely, be automated. That value accrues to the protocol that enables this instead.

    There are more exotic options or more vanilla options; 10% interest is thoroughly pedestrian in the crypto world. I believe I've given you and others enough crumbs to go down the rabbit hole and figure it out from here though, so I will no longer be posting ITT. Good luck.
  • HansOndabush
    HansOndabush Forumite Posts: 470
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    benbay001 said:
    But I would strongly encourage people to look in to this space because it will be the greatest wealth creation event of my generation. Its literally the internet version 2.0.
    If you had stuck to the "great store of value" line then yes, i could understand you keeping some of your wealth in crypto, but you didnt, you claimed its going to generate wealth.

    How can crypto generate wealth? The only thing it enables that cannot be done with a credit card is the untraceable purchase of things that are illegal. Fantastic.
    It doesn't even have that dubious 'advantage':



  • Scottex99
    Scottex99 Forumite Posts: 629
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    benbay001 said:
    But I would strongly encourage people to look in to this space because it will be the greatest wealth creation event of my generation. Its literally the internet version 2.0.
    If you had stuck to the "great store of value" line then yes, i could understand you keeping some of your wealth in crypto, but you didnt, you claimed its going to generate wealth.

    How can crypto generate wealth? The only thing it enables that cannot be done with a credit card is the untraceable purchase of things that are illegal. Fantastic.
    This makes no sense.

    What do you mean how can it generate wealth? Uhhh the value of assets could go up? Or people could innovate and build projects on the blockchain? Or crypto can help bank the unbanked? Or DeFI could massively revolution the banking sector including lending/borrowing? etc etc.

    Anybody impartial can easily see here that the crypto enthusiasts give a variety of reasons why we like the space, what we think is cool about it, how we've invested and how we've made money (probably the least important). I don't think we really shill it, as someone else commented, we don't need retail noob buyers to pump our bags anyway.

    And not all, but a good chunk of the no coiners just write it off in 10 minutes saying daft stuff like you are. Do some research and you might learn something.

    HFSP
  • HansOndabush
    HansOndabush Forumite Posts: 470
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    Crypto can't generate wealth. It is just a pseudo currency. What generates wealth is people working to provide goods and services.
  • Scottex99
    Scottex99 Forumite Posts: 629
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    edited 10 April 2021 at 5:33PM
    fwor said:
    Scottex99 said:

    if you’re going to say dumb stuff, maybe just be quiet
    I think you must be misunderstanding what he says. Essentially he is talking about a "productive" industry - where you take components and combine them to add value, resulting in a higher-value product you can then sell - versus a "non-productive" endeavour such as foreign exchange trading, where there is no fundamental change to the underlying asset.
    In that sense, cryptocurrency trading doesn't generate wealth.
    It may make some people richer, but bear in mind that there are two sides to every cryptocurrency trade...
    I doubt he means that but yeah like you said, that means that FX trading is bad? or CFDs? Or trillions of dollars of derivatives?

    It can create value same as any other industry. Outside of the values of the native tokens for each project, people are building super cool !!!!!!. Stuff that MAY revolutionise many other sectors too. Crypro is sucking up talent from coders, traders, Wall Street. I'm form traditional banking, I would never go back to it having seen the way things can be done instead.

    darren232002 said it a lot better than me.

    As always each to their own. There's smart people here that should know better than to write something off before you actually understand what it can do.


  • fwor
    fwor Forumite Posts: 6,786
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    edited 11 April 2021 at 1:12PM
    Scottex99 said:
    I doubt he means that but yeah like you said, that means that FX trading is bad? or CFDs? Or trillions of dollars of derivatives?

    I didn't say that foreign exchange trading is bad, and I don't think the other poster did either.
    I think what he is alluding to is the difference between "investment" and "speculation".
    Plenty of people see shades of grey in the distinction between the two, but for me the main difference is that there is a reason to believe that a "productive" endeavour will increase in value, provided the people running the business don't mess up.
    Speculation is different because the trading element is a zero sum game. For every winner there is a loser.
    Please don't treat this as a criticism of cryptocurrencies - I am neither a fanboy nor a hater. I'm just pointing out the basic differences, and not saying that one is "right" and the other "wrong".

  • whatstheplan
    whatstheplan Forumite Posts: 158
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    I'm maybe missing something here, however in answer to those saying crypto doesn't generate wealth etc, neither does fiat currency unless we do stuff with it to generate the wealth.  Take Bitcoin as an example.  Let's imagine you were given a physical coin for each Bitcoin investment you made.  Now, let's imagine you bought a full coin in April 2018 and proceed to leave it in a drawer from then until now.  That coin cost you £5k.  At the same time, you put £5k cash in the same drawer and left it until now.

    Today, how much is the Bitcoin worth?  And how much is the cash worth?  Which has appreciated more in value?  I call that a version of wealth generation.  Of course, it's also possible the Bitcoin might have been worthless as of today, whereas the cash would still hold value.  However that can happen with many forms of investing, no?  As for what defines 'value', that means different things to different people.  You might think NFTs are a joke, worthless, flash in the pan etc.  However if I create NFTs today for cost x and sell for cost y (where y is greater) then NFTs have generated wealth for me, no?  If the person that bought them from me then sells them 6 months later for cost z (where z is greater than y) they've in turn generated wealth from NFTs, or am I missing something?

    Assuming they're not telling porkies, some other posters on here are also giving real life examples as to how they use their crypto investments to generate additional wealth over and above any basic value appreciation.  Is that not a form of wealth generation?

    I sit in both camps, I see the value in traditional fiat investing, however I no longer think of crypto as being a flash in the pan.  How the industry will settle down over the coming years remains to be seen, however I don't think it's going anywhere unless governments start to make concerted efforts to make all forms of trading and holding crypto illegal as a means to protect fiat.
  • Scottex99
    Scottex99 Forumite Posts: 629
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    fwor said:
    Scottex99 said:
    I doubt he means that but yeah like you said, that means that FX trading is bad? or CFDs? Or trillions of dollars of derivatives?

    I didn't say that foreign exchange trading is bad, and I don't think the other poster did either.
    I think what he is alluding to is the difference between "investment" and "speculation".
    Plenty of people see shades of grey in the distinction between the two, but for me the main difference is that there is a reason to believe that a "productive" endeavour will increase in value, provided the people running the business don't mess up.
    Speculation is different because the trading element is a zero sum game. For every winner there is a loser.
    Please don't treat this as a criticism of cryptocurrencies - I am neither a fanboy nor a hater. I'm just pointing out the basic differences, and not saying that one is "right" and the other "wrong".

    Yeah I didn't write that in the best way, my fault.

    Of course it's pure speculation at some point, I've bought maybe 100 different crypto assets in the last year. Some after weeks of research into the team, the project, the tokenomics, maybe even some charting. Other just on a pure punt, they might do a 10x gain in a month and I dont even know what the project does. (Extreme example).

    But there is loads and loads of building and innovation in the space, from some very smart and talented people, that is miles away from "hey lets create 1 billion tokens out of nowhere and flog them for 10c each".

    Please don't treat this as a criticism of cryptocurrencies - criticism absolutely fine, I'm clearly in the FOR camp and happy to hear the opposing views anytime, assuming they actually make sense and are more advanced than "Bitcoins are for drugs on the internet, durrr" 
  • Scottex99
    Scottex99 Forumite Posts: 629
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    Assuming they're not telling porkies, some other posters on here are also giving real life examples as to how they use their crypto investments to generate additional wealth over and above any basic value appreciation.  Is that not a form of wealth generation?


    Yep exactly. And you can probably see from the detail given from me and a couple others that it would be pretty unlikely we'd made it all up.

    I've parked $50k ish of a few different assets in one of the lending platforms since around November 20. Taking interest in their native token (add some extra APY in interest) and have made $1,193.22 in that time. Some assets have higher returns than others, the APY on the native token has compounding interest too. Of course all the assets are moving around so a volatile thing to keep track of. But if I want to be long on these anyway, I might as well make money doing so.

    There's counterparty risk of course. But the platform I use has around $10bn AUM, so pretty sure they wont be stealing my piddly amount anytime soon.

    I can get all the assets out into cold storage at 24 hours notice too. For this one, I'm happy with the risk to put my "money" to work. £50k in the bank for that length of time would have generated me about 50p.
  • fwor
    fwor Forumite Posts: 6,786
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    Scottex99 said:
    There's smart people here that should know better than to write something off before you actually understand what it can do.

    I don't think that "lack of understanding" is the issue here. There have been numerous threads on here about cryptocurrencies in general and Bitcoin specifically. The lack of interest among experienced investors is not, from what I've seen in the many, many previous threads, due to a lack of understanding.
    I see the value in traditional fiat investing

    What exactly is "traditional fiat investing"? I guess you probably realise that an investment in a conventional fund can be valued in pounds Sterling, but it could equally well be valued in Bitcoin or Zlotys or some other currency. Most people don't (as far as I'm aware) invest in fiat itself - that's what you convert it back into when you want to buy some milk at Sainsburys?
    Sometimes you can take the cryptocurrency=good, fiat=bad mantra too far.
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