Bitcoin

RichTips

masonic said:

RichTips said:

Would now be a good time to introduce the topic of decentralized and trustless lending protocols currently giving interest rates in the double digits on fiat-pegged cryptocurrencies?

Is this the decenralised equivalent of investing in junk bonds, or lending someone some money to trade with? Can the borrower default on the loan?

You're lending money to people who, in general, will then change that fiat-pegged asset to a volatile crypto that they think will go up in price at a faster rate than the interest they're paying on the borrowed amount (there are other use cases but this is the most common). Eg. If somebody borrowed a fiat-pegged cryptocurrency from me on January1st 2020 at 100% APY and bought Bitcoin then they'd have made more in Bitcoin's rise in value versus the interest accrued on the 'capital' borrowed. This expectation of greater returns means people are willing to pay very high interest rates.
Platforms such as Aave.com require borrowers to secure their loans with an array of cryptocurrencies at a collatorization ratio that means if it's value were to decline beyond a certain point (that remains beyond full collateralization) then part of their position is liquidated to ensure that no default occurs. This process is managed using smart contracts.
Bear in mind, even these fiat-pegged assets in relatively well-known crypto platforms are at risk of total loss due to smart contract hacks and other hijinks. None of this is for the feint of heart and it all requires a huge amount of research to satisfy due diligence.  

masonic

RichTips said:

masonic said:

RichTips said:

Would now be a good time to introduce the topic of decentralized and trustless lending protocols currently giving interest rates in the double digits on fiat-pegged cryptocurrencies?

Is this the decenralised equivalent of investing in junk bonds, or lending someone some money to trade with? Can the borrower default on the loan?

You're lending money to people who, in general, will then change that fiat-pegged asset to a volatile crypto that they think will go up in price at a faster rate than the interest they're paying on the borrowed amount (there are other use cases but this is the most common). Eg. If somebody borrowed a fiat-pegged cryptocurrency from me on January1st 2020 at 100% APY and bought Bitcoin then they'd have made more in Bitcoin's rise in value versus the interest accrued on the 'capital' borrowed. This expectation of greater returns means people are willing to pay very high interest rates.
Platforms such as Aave.com require borrowers to secure their loans with an array of cryptocurrencies at a collatorization ratio that means if it's value were to decline beyond a certain point (that remains beyond full collateralization) then part of their position is liquidated to ensure that no default occurs. This process is managed using smart contracts.
Bear in mind, even these fiat-pegged assets in relatively well-known crypto platforms are at risk of total loss due to smart contract hacks and other hijinks. None of this is for the feint of heart and it all requires a huge amount of research to satisfy due diligence.  

Hmm, yes, sounds like an interesting application of the technology, but I'll let someone else blaze that trail.

Reaper

I haven't been following this thread recently as it had descended into name calling but I just looked at the price of crypto and wow, it's gone exponential. However my tip for those holding would be to get out now or very soon. As a general rule you should be very wary of exponential growth, it tends to switch to massive drops with no warning.

But hey, everyone has to make their own decisions and my advice should be taken with a pinch of salt as I cashed out a few weeks back. Not that I regret it. It was the right decision for me.

Retireby40

Reaper said:

I haven't been following this thread recently as it had descended into name calling but I just looked at the price of crypto and wow, it's gone exponential. However my tip for those holding would be to get out now or very soon. As a general rule you should be very wary of exponential growth, it tends to switch to massive drops with no warning.

But hey, everyone has to make their own decisions and my advice should be taken with a pinch of salt as I cashed out a few weeks back. Not that I regret it. It was the right decision for me.

I looked at it back in April may around 4000-6000 bitcoin and just couldn't part with enough money to make it worth while. 

Kicking myself now. And wondering what the Donald duck is happening. 

jimpwarsop

Retireby40 said:

Kicking myself now. And wondering what the Donald duck is happening. 

So long as more is being piled in than is being taken out, the rise should continue.

Attributed to PT Barnum, "theres is a sucker born every minute.................................and two to take him."

He didnt say it.

The earliest form of the phrase in print comes from The European magazine: and London review, published by the Philological Society of Great Britain, 1806:

It was the observation of one of the tribe of Levi, [that is, a Jew] to whom some person had expressed his astonishment at his being able to sell his damaged and worthless commodities, "That there vash von fool born every minute".

Retireby40

So in the middle of a pandemic where people are out of work and straight after Christmas everyone is buying bitcoin and ethereum and litecoin etc. There's that much being put in that there's near a 40% increase in 1 day. 

masonic

Retireby40 said:

So in the middle of a pandemic where people are out of work and straight after Christmas everyone is buying bitcoin and ethereum and litecoin etc. There's that much being put in that there's near a 40% increase in 1 day. 

Where are you getting your numbers from? It went up by about 12% in the two days after Christmas, there have been days where it has gone up 10%. It has taken about 2 weeks to rise 40%. The rises have been rapid, but not near 40% in one day as you suggest. As I've discussed in previous posts, the price tells you little about how much is being put in.

[Deleted User]

masonic said:

Retireby40 said:

So in the middle of a pandemic where people are out of work and straight after Christmas everyone is buying bitcoin and ethereum and litecoin etc. There's that much being put in that there's near a 40% increase in 1 day. 

Where are you getting your numbers from? It went up by about 12% in the two days after Christmas, there have been days where it has gone up 10%. It has taken about 2 weeks to rise 40%. The rises have been rapid, but not near 40% in one day as you suggest. As I've discussed in previous posts, the price tells you little about how much is being put in.

Cryptocurrency prices:

BTC price: £24134
1d:  £24659 (-2%)
7d:  £19818 (21%)
1mo: £13926 (73%)
3mo: £8281 (191%)
6mo: £7264 (232%)

ETH price: £800
1d:  £575 (39%)
7d:  £524 (52%)
1mo: £423 (89%)
3mo: £274 (191%)
6mo: £181 (341%)

LTC price: £121
1d:  £101 (19%)
7d:  £95 (27%)
1mo: £59 (105%)
3mo: £36 (236%)
6mo: £33 (266%)

As of 0600hrs this morning, 24/7 rolling calculation.

masonic

[Deleted User] said:

masonic said:

Retireby40 said:

So in the middle of a pandemic where people are out of work and straight after Christmas everyone is buying bitcoin and ethereum and litecoin etc. There's that much being put in that there's near a 40% increase in 1 day. 

Where are you getting your numbers from? It went up by about 12% in the two days after Christmas, there have been days where it has gone up 10%. It has taken about 2 weeks to rise 40%. The rises have been rapid, but not near 40% in one day as you suggest. As I've discussed in previous posts, the price tells you little about how much is being put in.

Cryptocurrency prices:

BTC price: £24134
1d:  £24659 (-2%)
7d:  £19818 (21%)
1mo: £13926 (73%)
3mo: £8281 (191%)
6mo: £7264 (232%)

ETH price: £800
1d:  £575 (39%)
7d:  £524 (52%)
1mo: £423 (89%)
3mo: £274 (191%)
6mo: £181 (341%)

LTC price: £121
1d:  £101 (19%)
7d:  £95 (27%)
1mo: £59 (105%)
3mo: £36 (236%)
6mo: £33 (266%)

As of 0600hrs this morning, 24h rolling calculation.

Thanks, thought the post was referring to bitcoin rather than ethereum.

[Deleted User]

Yeah post wasn't perfectly clear. I pull these stats from Telegram channel  https://t.me/s/CryptocurrencyPricesChannel gives clear picture and it's 24/7 rolling calculation with post every 6 hours.