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Bought Bitcoin and can't stop !!!

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  • The White Coat Investor The White Coat Investor 
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    Status: Physician
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    Joined: 05/13/2011

    https://www.wired.com/story/firefox-vulnerability-coinbase-ransomware-border-hack/

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #225346 Reply
    Liked by Zaphod
    Avatar Doc Spouse 
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    Is there a trusted or place that you can actually trust to invest with? This has been by far the biggest hurdle for me, besides not wanting to watch my money burn.

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    Coinbase, Binance, Bitstamp (EU), and to a lesser extent Gemini are the most well known.  Coinbase allows fiat – USD to BTC and a number of other tokens.  After that, most people transfer their crypto to either their own wallet, or one of the larger exchanges like Binance.  As the old crypto saying goes – If you don’t own your keys, you don’t own your coins.  Meaning that unless your crypto is on a wallet you own, there’s always a risk of someone else getting them.

    I use coinbase

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    Weren’t they the ones who got hacked?

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    Virtually all of the exchanges have been hacked or had issues with accounts being compromised.  That being said, Binance has been great about fully insuring funds lost to hacks and Coinbase as well.  These exchanges are making billions.  $30 million to cover hacking losses is nothing to them.

    Just keep in mind this is still pure speculation. Definitely wouldn’t recommend anyone put investment money towards it.  On the other hand, if you’re the type to throw down a few grand in Vegas, there’s some decent picks out there.  Just understand you’re gambling, not investing. 😉

    #225410 Reply
    Avatar Kamban 
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    Joined: 08/01/2016

    I think that bitcoin is an amazingly interesting technology, however $0 of mine will be invested in it.

    Click to expand…

    Maybe some of the smart folks here answer this-

    OK, bit coin uses blockchain technology which is very useful to authenticate transactions. I get it that the tech underlying it is tremendously useful.

    But what about bitcoin as a currency. Normally you would expect the currency to be used for day to day transactions and thus not have tremendous fluctuations in price or value unless it is a country like Venezuela with rampant inflation. So a can of Coke should be $1 at a vending machine and not become $2 the next day or $0.25 the next. Or that 2 days later I insert $1 and I get 200 cans of coke for the same one dollar.

    Bitcoin is like that. Who wants to use it and buy a latte for one bitcoin and feel like a chump a couple of years later when the same bitcoin could have gotten you a 3000 sq feet house. It is rampant inflation in the opposite direction. So I will hoard it and not use it as a currency. In which case it does nothing of the sort what is intended to be for when it was created. It is just blind speculation with no underlying basis or real use as a currency.

    And with so many of the me-too crypto like Etherium coming out what makes one sure that Bitcoin should be the main one to be used for speculation and not others.

    #225417 Reply
    Liked by Lordosis
    Avatar docnews 
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    @tangler “I think people are buying this because people are buying this. I really doubt the average investor understands it, thus classic bubble behavior.”

    Same could be said of VTSAX at this point, but doesn’t mean it’s the wrong move.

    #225438 Reply
    Avatar docnews 
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    @thewhitecoatinvestor about coinbase hack: did you read the article? They weren’t successfully hacked. Plus you can buy on coinbase or another exchange and move to your own wallet (always recommended).

    #225446 Reply
    Avatar docnews 
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    @kamban once widely adopted bitcoin would stabilize but currently it is not the best for transactions hence the idea of a stable coin with Libra being the newest proposal (others already exist). Bitcoin is now being considered as a store of value or “gold” that would not be devalued by inflation. The main reason a crypto could go up in value is that the dollar goes down in value every day.

    You are right to note the biggest threat to bitcoin is a better crypto but the first to market advantage is now hard to beat and those who are innovating within crypto are building on top of the bitcoin network. Bitcoin has been tested longer than others and most innovations of other cryptos have been incorporated into the bitcoin network.

    #225449 Reply
    Avatar Doc Spouse 
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    Maybe some of the smart folks here answer this- OK, bit coin uses blockchain technology which is very useful to authenticate transactions. I get it that the tech underlying it is tremendously useful. But what about bitcoin as a currency. Normally you would expect the currency to be used for day to day transactions and thus not have tremendous fluctuations in price or value unless it is a country like Venezuela with rampant inflation. So a can of Coke should be $1 at a vending machine and not become $2 the next day or $0.25 the next. Or that 2 days later I insert $1 and I get 200 cans of coke for the same one dollar. Bitcoin is like that. Who wants to use it and buy a latte for one bitcoin and feel like a chump a couple of years later when the same bitcoin could have gotten you a 3000 sq feet house. It is rampant inflation in the opposite direction. So I will hoard it and not use it as a currency. In which case it does nothing of the sort what is intended to be for when it was created. It is just blind speculation with no underlying basis or real use as a currency. And with so many of the me-too crypto like Etherium coming out what makes one sure that Bitcoin should be the main one to be used for speculation and not others.

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    That fluctuation is both the benefit and bane of btc (or any crypto that’s not a stablecoin).

    First off, it’s important to remember there’s only 17 million Bitcoin that have been mined so far.  Almost 2k btc are mined each day, but there will only be 21 million bitcoin total. It gets twice as hard to mine btc every time it halves, but after it hits 21 million, there’s no more new btc that’s possible to be mined.  That means there’s only another 3 million btc left.  There are estimates that of the 17 million already mined, over 5 million btc have been lost, either due to people tossing old hard drives with wallets, stolen btc that can’t be moved without giving away the perpetrators, etc.

    A lot of the speculation that goes on today is betting against future value rather than utility today.  You have people holding onto btc instead of purchasing things with it.  That causes fluctuation, and yes.. it’ll hinder adoption until it settles down.  The true test for btc will come after it’s all mined.  I predict the price will plummet, but it’ll still be valuable and used much more often than it is today as the utility becomes the value rather than speculation.

    If that kind of thing interests you, keep reading.  Otherwise, you can stop.

    What’s fascinating to me, is that even the crypto that provides utility right now, suffers from people holding and speculating.  I’m a huge fan of BAT (Basic Attention Token).  It was created by Brendan Eich (creator of Javascript/co-founder of Mozilla) and aims to disrupt Google’s stranglehold on online advertising.  The same team created the Brave browser, which is a privacy browser that blocks ads and stops Google and others from tracking your movements online.   I’m laying that out to show that this is a token with an actual product, used today by hundreds of thousands of people.  It has real-world utility.

    How BAT works is that advertisers buy BAT to show their ads on Brave (the browser), the BAT gets paid to the user who sees the ad, and in turn, that BAT can be tipped to the websites you visit most often.. sort of an automatic Patreon to your favorite sites.  It’s not crazy money, but I usually make around $20 worth of BAT each month which then goes to various websites I visit frequently.  BAT needs that constant circulation (Exchange > Advertiser > User > Website Owner > Exchange) to work successfully.

    Enter speculation… Google makes $100 million a day with adwords. That’s almost $40 billion a year.  People look at Brave/BAT and see them carving off a chunk of that; so they buy/earn BAT and, instead of tipping their favorite websites, they hold onto it.   They’re speculating it’ll go up massively in the future as Brave gains online ad market share, but by holding onto BAT, they’re actually hurting the utility of the coin, as large amounts are not being circulated.  I think BAT will be a success, but it’s going to be a wild ride, primarily because of that speculation.

    That’s one token out of thousands, each with its own niche.  Some are vaporware, some are jokes (Doge), some have actual utility.  All have prices that are all over the place from one day to the next.  It’s a fascinating thing.

    But it’s still gambling.

    #225451 Reply
    Liked by Kamban
    jfoxcpacfp jfoxcpacfp 
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    Let’s not forget that the way to make a profit is to buy low and sell high rather than getting excited when an “investment” (I use that word very loosely) has headed north. Dollar-cost averaging is still probably the easiest and best way to invest for almost everybody. Speculation is fun as long as you understand that it’s purely speculation and you buy only as much as you can afford to lose without impacting your lifestyle and goals.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #225461 Reply
    IntensiveCareBear IntensiveCareBear 
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    @tangler “I think people are buying this because people are buying this. I really doubt the average investor understands it, thus classic bubble behavior.”

    Same could be said of VTSAX at this point, but doesn’t mean it’s the wrong move.

    Click to expand…

    Those are two entirely different things.

    Greater fool theory in econ is where you buy with only the intention to sell to someone else. You might know it is worthless, but as long as it has profit potential, you can buy. The majority are mainly or exclusively buying on greed. Bitcoin serves no real utility and has no real value as a commodity, income producer, etc. It has no yield and no function… solves no problem that isn’t already solved. A ton of people buy it on greater fool theory. The last good example was a lot of the tech stocks which had never shown profitability and were mostly created quick creations just to IPO until the dot com bubble of 2000. Many people lost on them, but the IPO sellers and plenty of investors also flipped them on their rise up the charts for quick profit using greater fool theory. George Soros has famously written on how he loved diving into bubbles, esp in foreign markets and often using margin to amplify his impacts, “When I see a bubble forming I rush in to buy, adding fuel to the fire. That is not irrational,” before liquidating his sizable holdings… and usually starting the crash/correction. Bitcoin is just the latest thing to see similar price fluctuations; I’m a little amazed the sharks are back to pump and dump BTC again after taking a huge chomp out in the first go-round, but if there is still enough open interest and volume still in that market, it will probably work again.

    Something like a USA total market index mutual fund (or, for anyone who has joined the 21st century, an index ETF), are mainly based on the QE profits and dividends and growth and book value (land, machinery, commodities, patents, management and production systems, etc) of corporations. Whenever people doubt the stock market being “real,” I encourage them to drive to headquarters of a few companies, take the tour, view the assembly lines, shake hands with some employees. You can’t tell me the thousands of fantastic land corner locations McDonalds owns, engine patents at Boeing and GE, thousands of acres of forests that Weyerhauser owns, the Rx and agriculture patents that Bayer controls, the metric tons of copper wire and sizable quarterly cash dividends AT&T pays, ore mines that Cliff Natural Resources hold, or many hundreds of high level programming genius employees at Microsoft aren’t significantly valuable. On the contrary, I can tell you I wouldn’t pay a dime for fundamentals of Bitcoin… except to sell it right away (greater fool theory).

    Is the US market overvalued? Probably at some times, but nobody in their right mind would debate that there is real underlying value there. Sure, it is only valuable if there are buyers, but anything with a yield and underlying assets will have buyers. People from all over the world aren’t “buying [index funds] because people are buying this;” they are buying because it is one of the best investments you can make right now… good returns on minimal research, and high liquidity. The majority of ppl buying on fundamentals is not “classic bubble behavior.”

    Again, I’m not saying BTC can’t outperform other markets for awhile, but they are just not comparable. Some things have fundamental value, some are GRQ schemes.

    "Hmm, that sounds risky." - motto of the middle class

    #225463 Reply
    Avatar docnews 
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    @intensivecarebear I agree a lot of times crypto is a victim of FOMO just like the dotcoms, but underlying it was some value (apple/google/amazon). I still don’t buy the theory that Facebook, Uber, MasterCard, Visa are creating Libra if cryptocurrency has no value. We can debate the true level of value but to state there is none I believe is ignorance.

    #225511 Reply
    Avatar Jack_Sparrow 
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    Joined: 01/09/2019

    Is there a trusted or place that you can actually trust to invest with? This has been by far the biggest hurdle for me, besides not wanting to watch my money burn.

    Click to expand…

    You can get the robin hood app and buy Bitcoin through that… Less than 15 minutes.

    I bought $300 bucks of Bitcoin yesterday and already sold today for 7% return…  So just to be clear, I think Bitcoin is a total ponzi scheme and is a fools approach as IntensiveCareBear Mentioned. However I think the price of bitcoin has skyrocketed because of people like me who keep throwing a few bucks in ring similar to throwing $100 bucks down on a sports team or horse race. I’m obviously throw in wait a week and pull my bitcoin out for a quick 20%.

    But i also think Bitcoin has a little more backbone to it and a chance to hang around because of countries/people like Iran, North Korea, Venezuela, crime bosses, etc. There inflation rate is through the roof and there currency is garbage, not to mention they have sanctions and need to transfer payment through hidden means. (Take a guess on who probably is hacking all those servers.). Those folks can easily access bitcoin and its pretty much a universal currency. If you’ve ever been to parts of Asia you can book hotels using Bitcoin and buy things with it like food so its not like a gold bar or just some digital media to everybody in the world.

    I know Bitcoin is older and is pretty much the Windows 95s of crypto currency, but hey if 100 million people people are buying it and you can convince another 10 million to buy it, its just going to keep going up.

     

     

    #225522 Reply
    Liked by Zaphod
    Avatar Infinity 
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    Up 12% one day and down 8% the next day without apparent reason, is too much for me to handle.  Just like a slot mechine to me.

    #226264 Reply
    Avatar Raddoc123 
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    Up 12% one day and down 8% the next day without apparent reason, is too much for me to handle.  Just like a slot mechine to me.

    Click to expand…

    Its a fun bet as long as it’s money which you do not need.  You don’t even have to travel to a casino.  It’s a nice diversifier.  The kind we have always been looking for.  It’s poorly correlated to markets and the price movements have no rhyme or reason for the most part.  It has high upside potential for a small bet (huge downside as well).

    For those who think it’s going to zero, I highly doubt it,    There will always be greedy speculators all over the world and bitcoin has name brand recognition.   By now people will have realized already that they’re trading turds back and forth and it’s price should have dropped to 0,  but it hasn’t and likely never will.  Plus most of it is owned by relatively few whales who will always manipulate the market as a backup 😀

    #226420 Reply
    Zaphod Zaphod 
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    Up 12% one day and down 8% the next day without apparent reason, is too much for me to handle.  Just like a slot mechine to me.

    Click to expand…

    Its a fun bet as long as it’s money which you do not need.  You don’t even have to travel to a casino.  It’s a nice diversifier.  The kind we have always been looking for.  It’s poorly correlated to markets and the price movements have no rhyme or reason for the most part.  It has high upside potential for a small bet (huge downside as well).

    For those who think it’s going to zero, I highly doubt it,    There will always be greedy speculators all over the world and bitcoin has name brand recognition.   By now people will have realized already that they’re trading turds back and forth and it’s price should have dropped to 0,  but it hasn’t and likely never will.  Plus most of it is owned by relatively few whales who will always manipulate the market as a backup 😀

    Click to expand…

    Never is a long time.

    #226429 Reply
    CordMcNally CordMcNally 
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    Bitcoin is kind of like Tesla in my book. I think the underlying technology will remain but I don’t think Bitcoin and Tesla will.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #226435 Reply
    Liked by Zaphod, wonka31

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