Crypto Dabble.

User232002

Linton said:

This does not sound like money generated by the cryptocurrencies but rather commission from trades. ie it is paid for by the people trading.   So it is just people within crypto-world paying each other for services.  The generator of profit is the exchange, not the currency.  The fact that the item being traded is crypto currency is incidental. 

 This is very dfferent to a Tesco share which represents your part-ownership of Tesco and so entitles you to some of Tescos profits.  It is new money from the point of view of the share market.
  

Its exactly the same as a share in Tesco. Or rather, its exactly the same as a share in something like Thomas Cook FX (are they even around anymore? who knows). You own a share in the exchange by providing liquidity to it and get a share of the profits.

You provide liquidity to the exchange, you are given tokens representing your part ownership in the pool of tokens available. When people come to use the pool and trade between the two tokens you provided, the protocol takes a % to facilitate the trade. The share given back to you is proportional to the share of ownership you have of the pool.

There is no difference between this business model and operating a high street FX exchange for holidaymakers, except that the items being converted are cryptocurrencies - which as you said, "The fact the item being traded is crypto currency is incidental."

Hansplace

Just a reminder to all on NFT. When NFT falls there will be almost zero liquidity.

Also NFT is introducing so many new rubbish ICO based on NFT.

Got one new ICO called Rinnegan listed today. Based on Naruto etc blah blah blah.

 Who is crazy enough to buy these sh*t.

And it is these sh*t that will drag the whole crypto market down when NFT fails

Again just my humble opinion and suggest that people should stay away for NFT.

Linton

darren232002 said:

Linton said:

This does not sound like money generated by the cryptocurrencies but rather commission from trades. ie it is paid for by the people trading.   So it is just people within crypto-world paying each other for services.  The generator of profit is the exchange, not the currency.  The fact that the item being traded is crypto currency is incidental. 

 This is very dfferent to a Tesco share which represents your part-ownership of Tesco and so entitles you to some of Tescos profits.  It is new money from the point of view of the share market.
  

Its exactly the same as a share in Tesco. Or rather, its exactly the same as a share in something like Thomas Cook FX (are they even around anymore? who knows). You own a share in the exchange by providing liquidity to it and get a share of the profits.

You provide liquidity to the exchange, you are given tokens representing your part ownership in the pool of tokens available. When people come to use the pool and trade between the two tokens you provided, the protocol takes a % to facilitate the trade. The share given back to you is proportional to the share of ownership you have of the pool.

There is no difference between this business model and operating a high street FX exchange for holidaymakers, except that the items being converted are cryptocurrencies - which as you said, "The fact the item being traded is crypto currency is incidental."

We agree.  The equivalent of a Tesco share is a loan to the exchange.  It is not the cryptocurrency which is in this case is just a commodity.  

My point remains - an approximate fair price of the Tesco share can be determined from its profits or dividends per share.  So one can make a judgement on whether to buy.  Unlike a crypto currency where there is no calculable fair price.  If the market chooses to trade Bitcoin at £1 or £1M one cannot say whether it is a bargain or expensive.  EIther way the exchange can carry on making 8% or whatever for its tokens.

Malthusian

Linton said:

This does not sound like money generated by the cryptocurrencies but rather commission from trades. ie it is paid for by the people trading.   So it is just people within crypto-world paying each other for services.  The generator of profit is the exchange, not the currency.  The fact that the item being traded is crypto currency is incidental.

The argument is essentially equivalent to saying that a game of roulette must be a positive sum game, because the casino always makes a profit.

When you point out the profit comes from punters' money, and punters' money in still == punters' money out, the response is "but it's not because we call it something different".

Anyway, the real point of issue is not whether crypto bros can conceivably generate gross earnings of 7-8% from shuffling tokens from punter A to punter B. If they can then good for them, but this is a forum about passive investment and none of us are interested in taking a job as a money handler. The issue is whether lending your tokens to a bro so he can attempt to generate returns of 7-8%pa from arbitrage (anyone remember MJS Capital?) or transaction fees is "risk-free". From Darren's own description it appears to be as risk-free as lending your money to Thomas Cook or a high street bureau de change.

User232002

Linton said:

We agree.  The equivalent of a Tesco share is a loan to the exchange.  It is not the cryptocurrency which is in this case is just a commodity.  

My point remains - an approximate fair price of the Tesco share can be determined from its profits or dividends per share.  So one can make a judgement on whether to buy.  Unlike a crypto currency where there is no calculable fair price.  If the market chooses to trade Bitcoin at £1 or £1M one cannot say whether it is a bargain or expensive.  EIther way the exchange can carry on making 8% or whatever for its tokens.

I really think you are misunderstanding the difference between tokens and currencies or you are misunderstanding the mechanics of what I am describing. Not every project in crypto is attempting to be a currency and for these projects, the actual price of the asset being traded doesn't matter. You don't need to calculate the fair price of bitcoin if you are just acting as an exchange; Thomas Cook FX makes money regardless of the price of USD/GBP/EUR.

Parking the discussion on Uniswap for a moment, consider Sushiswap - this operates in exactly the same way except that a portion of the fee for every transaction goes to the holders of the sushi token. You don't need to provide liquidity here, you can generate a return simply for owning a share of the protocol. Yesterday, the fees returned 12.15% APR to sushi holders. This is updated in real time and you can see data on how it has performed over the last year. Why is this figure not comparable to your Tesco dividend figure? Just like we can assess Thomas Cook vs Tesco, we can assess Tesco vs Sushiswap.

Holding the sushi token = the share in tesco
The 12.15% APR paid out to holders = the dividend

Almost all of these tokens are valued using common price/earnings ratio's and their PEs compare very favourably to traditional companies. 

User232002

Malthusian said:

The argument is essentially equivalent to saying that a game of roulette must be a positive sum game, because the casino always makes a profit.

When you point out the profit comes from punters' money, and punters' money in still == punters' money out, the response is "but it's not because we call it something different".

There are plenty of ponzi's in crypto, but there are plenty of value creating protocols all over the place as well. AAVE takes in capital from A and loans it out to B. It charges B 6% interest and gives A 4% interest. It does all this without the need for a city centre HO and an army of employees but simply by using open source code. This is the business model of, like, every bank in existence. I think we can agree that making capital available to other people in society is a value creating process, and not a zero sum game. I think we can all agree that being able to deliver a product that the market clearly needs whilst drastically reducing the costs (HO/Employees) creates value via reduced costs, and is not therefore a zero sum game.

You're the type of person that thinks international trade is zero sum. It isn't. A rising tide lifts all boats.

Malthusian said:

Anyway, the real point of issue is not whether crypto bros can conceivably generate gross earnings of 7-8% from shuffling tokens from punter A to punter B. If they can then good for them, but this is a forum about passive investment and none of us are interested in taking a job as a money handler. 

Oh, so now we have accepted that it 'might' be possible. I guess that's progress.

But now it 'doesnt count' because it doesnt fit your particular brand of investing... On what basis do you think this forum is for 'passive investing' only? There seem to be plenty of threads here that aren't exclusively about negative yielding current accounts, NS&I and index fund investing. Who made you king of the forum to decide that everyone here is only interested in these investment vehicles?

Malthusian said:

The issue is whether lending your tokens to a bro so he can attempt to generate returns of 7-8%pa from arbitrage (anyone remember MJS Capital?) or transaction fees is "risk-free".From Darren's own description it appears to be as risk-free as lending your money to Thomas Cook or a high street bureau de change.

Again, comprehension seems to be a problem here. Would you like to point out where I said that investing in a high street BdC was risk free? I'd also like to point out that at no point have I said that lending tokens to another party or making money from transaction fees was 'risk-free.' In fact, I specifically mentioned counter party risk regarding the former and said it was not.

But continue putting words in my mouth that fit your narrative... That's all you can do I guess when you can't actually argue on substance alone.

User232002

Hansplace said:

Just a reminder to all on NFT. When NFT falls there will be almost zero liquidity.

Also NFT is introducing so many new rubbish ICO based on NFT.

Got one new ICO called Rinnegan listed today. Based on Naruto etc blah blah blah.

 Who is crazy enough to buy these sh*t.

And it is these sh*t that will drag the whole crypto market down when NFT fails

Again just my humble opinion and suggest that people should stay away for NFT.

Agree on all fronts here. The floor price is the price you can buy at, not the price you can sell at.

NFTs are a very useful piece of technology that will do interesting things in the future (much like ETH in 2017 basically did nothing, but now is very useful because people built stuff on top of it), but the world doesn't need umpteen collections of 10k profile pics of random animals.

Punks, Apes, some of the Artblocks stuff will always be valuable; but most of it will go to zero.

IanManc

darren232002 said:

You're the type of person that thinks international trade is zero sum. It isn't. A rising tide lifts all boats.

A rising tide doesn't lift all boats if some boats have got holes in them.   😉

HCIMbtw

Just to provide a little context, not even a couple of years back this forum a couple of threads around P2P lendings opportunities to try and generate some better returns above crappy interest rates 

We have had speculative investment threads and as we all know money in S&S and funds is not without risk.

I really do not think it is reasonable to claim this thread does not belong, or is misplaced when such content has preceded it..  

Most of the commentary i've seen from people investing in crypto in this thread has been backed up by considered points and I don't think it could be constituted as an attempt to be misleading or shilling any kind of scam.  

I am a relative crypto novice, don't invest in it at all (would like to a little bit, but trying to work my head around platforms, wallets and cost barriers)... but even with my relatively basic knowledge I can tell there is a lot of misunderstanding from people who are trying to shoot down what is genuinely quite educational content about different formats of crypto and different systems of investing in it... 

Was interested if there was any recommendations on different wallets to look at for use on Binance? 

Scottex99

HCIMbtw said:

Just to provide a little context, not even a couple of years back this forum a couple of threads around P2P lendings opportunities to try and generate some better returns above crappy interest rates 

We have had speculative investment threads and as we all know money in S&S and funds is not without risk.

I really do not think it is reasonable to claim this thread does not belong, or is misplaced when such content has preceded it..  

Most of the commentary i've seen from people investing in crypto in this thread has been backed up by considered points and I don't think it could be constituted as an attempt to be misleading or shilling any kind of scam.  

I am a relative crypto novice, don't invest in it at all (would like to a little bit, but trying to work my head around platforms, wallets and cost barriers)... but even with my relatively basic knowledge I can tell there is a lot of misunderstanding from people who are trying to shoot down what is genuinely quite educational content about different formats of crypto and different systems of investing in it... 

Was interested if there was any recommendations on different wallets to look at for use on Binance? 

Agreed. Nice post.

Binance is great for variety, ridiculous amounts of assets there but as you are new you may want to just stick to BTC/ETH and a few other large cap projects before you go right down the rabbit hole.

So in that sense Coinbase isn't a bad place to start as you earn a few quid watching the explainer vids too. Although I find the UI horrible and the fees are terrible too. Coinbase Pro much more reasonable. Kraken worth a look but I'm also personally not a fan.

I like Swissborg for a fiat (GBP) onramp from my bank and then I'll chop and change crypto through various platforms after that, staking, saving, liquidity pools etc.

Probably the most simple basic way is to "buy" crypto on Revolut but again the fees won't be great and it's not physical crypto that you can withdraw, just a CFD.

Cheers