Crypto Currencies?

[Qube]

Cryptocurrency... What a minefield

That’s as good as they get folks, tune in next week for more

[RemiD]

there is no physical / natural value in bitcoin units or the protocol, the value exists because some humans decide to use it to store value or exchange value (send / receive units), the strengths of bitcoin are the transparency of the protocol (open source and people vote with their money to support a protocol / fork more than another), the decentralisation of transactions management / accounts / compatibility, the limit amount of units, the resistance to censorship and stealing (taxes) of  governments. If you don't have a good understanding of what truly is money / currency and the monetary system, you can't understand. do some research on youtube about what is money / currency...

[Krischan]

IMHO Bitcoin is only the "anchor" for the coming payment systems, like a form of digital gold. I'm currently holding BTC, ETH and some XRP, MIOTA and BCH (while BCH is very disappointing). But there are more interesting payment systems coming which are not being "mined" but dependent to the big CC's like BTC or ETH.

Consider this from the point of view of an investor:

1) Economy outlook
Because of Corona and low interest rates, many "zombie" companies will not survive the next years. Facing a bear market, investors need a safe harbour or alternatives. Real estate is a risky alternative because the already high prices must also be paid by somebody. If less and less can afford one or don't get a loan, what will happen to the prices? And interest rates must be raised again one day.

2) Precious Metals
The total amount of physical Gold *ever* mined since the beginning of mankind is about 180.000 tons whichs makes a cube of 20x20x20 meters only, try to imagine this in front of you (ScaleEntity cube,20,20,20)  . Every year only 2000 tons are added, but it is getting more and more difficult (expensive) to mine it. Most of this mined gold is stored by countries and jewellery in India, only a small part of it is available for you and me, for example in gold coins. Much more virtual gold is being traded but if only a small percentage of investors suddenly demands their investment physical, the whole market and the price of Gold will explode or even split, so silver will do (but the market there is much smaller). Precious metals could become "too expensive" for investors and owning/getting them physical is more difficult/expensive than owning CC. And if you think the current prices of gold and silver are too high, wait for the future...

3) Currency theory
Currency is only worth something as long as all people agree that it is worth something. So we could also pay with shells or pebbles as long as everyone believes that shells or pebbles are worth something. For stability, however, a currency must be a scarce good. Current currencies are created "out of nothing", and in history this *always* ended in a hyperinflation, see Germany 1923, Zimbabwe 2009, Venezuela 2016-today etc. Bitcoin is limited to 21 million units total, of which 18.5 million have already been mined and it becomes more and more difficult (expensive) to mine more. Even central banks are considering bringing out their own Crypto Currencies as an alternative to the current currency system.

Take a look at ADA (Cardano), XTZ (Tezos), TRX (Tron) and XLM (Stellar) which are modern payment systems based on CC, and some of them are still low on price which means you can get a lot of units for a low price compared to Bitcoin. I don't think we will pay with Bitcoin as we're not paying with gold/silver coins in the supermarket, too.

IMHO, digital payment systems backed by scarce CC are the future, the question is only: which one(s).

[RemiD]

@Krischan>>
why do you say that bch is disapointing ?
since there is enough decentralisation (less than btc, ok, but if enough companies in different countries use it and run their own node it would be enough) and transaction fee/time are good (low) for bch (whereas transaction fee/time are too high for btc and will most likely make it unusable for most people...)

about gold / silver >> these have proven to be good store of value in the past, but i see 3 problems :
how can you be sure of the purity ?
how can you store them and transport them safely ?
how to do transaction at a distance (buy/sell/trade on the internet)
what if your government decide to seize them or to forbid them ?

crypto coins are superior in these aspects...

[Krischan]

I wasn't precise enough on BCH: I mean that MY investment in BCH is disappointing yet, but I'm still holding all of it - let's see. Well, many good questions about AU/AG, you can find all the answers in the internet and some depend on your countries laws, but I try to answer them:

To be sure of the purity: buy only from reputable, certified dealers - they don't want to lose their reputation which is crucial and buy only 1oz bullion coins like the Krugerrand, Maple Leaf, Kookaburra which are harder to fake. For transportation, well if you're not a millionaire: pants pocket, wallet, insured package, value transport service, private army - depends on how much you have to transport. And for storing there are a lot of possibilities too: you can choose a classic bank safe deposit box, store them in a mountain storage depot in Switzerland, you can bury them or wall them in. Depends on how safe/expensive the storage should be and how paranoid you are. But the best is to have direct access yourself, because then you are not dependent on others.

I don't think that the government will repeat the mistakes the Roosevelt government did in the 1930s (possession of gold was prohibited back then which didn't work very well) so this is a real threat but speculative. If you're paranoid try to buy it physical and anonymously for cash only and then you're the only one who knows that you own it. And if they forbid it there will always be a second "market" But in such a situation, silver is more usable as it is an industrial metal with a much smaller value and can be traded for goods, like in the medieval ages :-D

An advantage of physical AU/AU over virtual gold and CC here in Germany is that 100% of the earnings are tax free if you hold it physical for at least 12 months. On CC earnings you must pay here 25% tax and from the 75% rest additional 5,5% "solidarity tax" and they are planning to tax virtual gold the next year like other earnings.

One important thing to favour physical over virtual AU: in case of a power failure, everything is still there in contrast to virtual/CC. And it has worked perfectly for over 5,000 years. But to be prepared for all scenarios, you should own physical, virtual and CC.

[RemiD]

thanks for the clarifications.
i agree on almost everything.

another smart investment (instead of keeping too much fiat cash), imo, are materials / items / tools / devices which can last long and which are useful in real life. things that i would buy in the future for example... or that i could resell on ebay...

[GfK]

Any of you lot want to buy some magic beans?

[RemiD]

in what sense the fiat currency (usd, eur, gbp, aud, cad) that you use, has more value than btc or bch, if a central bank can create a lot more (several trillions in 2020) and distribute it to only a selected few individuals / companies ? (=not to you, not to me)
this is the best way to lose buying power and to have your savings lose value

if you find this normal and fair (or democratic, lol) well you are a lost case...

[Krischan]

Always remember that ALL fiat currencies do not have intrinsic value. What they are doing right now is repeating the hyperinflation of 1923 in Germany and 2009 in Zimbabwe. This is a mathematical fact no politics can change when they once go this way. It only still works because the US of A currently have the worldwide fiat currency and as long as China doesn't say "hey, the Dollar is only a huge pile of toilet paper" it is "worth" something. In fact, the dollar today is as much worth as the hyperinflated German Papermark of 1923 and so the Euro is.

Take a look at the attached note (I'm owning one of them to always remind me). They've never used this in Zimbabwe because their currency systems crashed before they could be used but they exist. As a warning that this still happens in our time.

And don't take a look at the price of gold. Think of gold as a constant line at 100% and turn the price of gold in fiat currencies upside down below (see second attachment). All currencies lose against gold. Because it is scarce.

The magic beans are the Dollars and Euros in our pockets, the bits and bytes in our bank accounts and the Tesla or Apple shares. That's why Gold and even Bitcoin are getting more important. If you're an optimist, buy gold or CC. If you're an pessimist, buy lead (bullets).

[RemiD]

not sure about the real amount of extracted gold in the world (taking into account  the difference of purity of some coins / bars)
and not sure if there are some hidden undisclosed stacks somewhere.
so not sure about the stability of the max number of units compared to bitcoin, but since it has already been used as money, yes i understand why some people consider it as a reserve of value...

[RemiD]

Paypal is going to support to sell, buy, pay with crypto money (BTC, BCH, ETH, LTC)

youtube.com/watch?v=GZMr9BH0vCs

youtube.com/watch?v=uWrBXjWwUAk

youtube.com/watch?v=t9LCFUzDGBk

youtube.com/watch?v=ZaVWziwHHU4

[Kryzon]

Something I'm trying to understand is, when you buy BTC, how do you possess it? Is it a hash (like a password)?

There are some local currency exchanges in my country that let you make a deposit in fiat currency to get a crypto (or fraction of it), but how does it exist?
I know that they say "if you don't own the keys, you don't own the coins", or in other words, you shouldn't have to ask permission (log in, password etc.) to access your cryptocurrency.
I also heard that you can have a hardware-wallet or paper-wallet, having whatever your BTC is.

I imagine that if you own 'partial' BTC (say, something less than a unit of BTC) then you don't actually own the coin, you just share it with the exchange you have the account on, and are entitled to a fraction of that unit. It's only when you own a whole unit that you can print the password to it or something like that, is that correct?

[RemiD]

how do you possess it? Is it a hash (like a password)?

as i understand it : bitcoin is a protocol and also a coin and also a ledger (history of transactions) and also a network of nodes (servers) spread in different countires / regions of the world.

there are public addresses and private keys (that you can generate)

an address is like a bank account number, a private key is like a password / pin code

to receive btc you only need an address (or corresponding QR code) that you give to somebody
but to send btc you need a private key

to generate addresses / private keys you can use :
->an address / private key generator (to have a "paper wallet")
->a wallet that generates and manages the addresses / keys for you, and to recover the last used address / key you can use some backup words
->a wallet that generates one never changing address / key

to receive coins :
you only need to give your public address (or corresponding QR code)

to send coins :
you need your address and private key, this is managed by a software wallet (on android, ios, windows, mac) or by a hardware wallet (too complicated and not safer imo)

that let you make a deposit in fiat currency to get a crypto (or fraction of it), but how does it exist?

an exchange is like a bank, it has a promise to give you the fiat / crypto that they store on your account, as long as they don't fail or disappear 
so they are useful to convert fiat to crypto or crypto to fiat, but not safe to store a lot of money / coins on it.

there are 2 others ways to buy btc without using an exchange :
->buying btc in a crypto ATM
->trading cash to btc with somebody who already owns btc

"if you don't own the keys, you don't own the coins"

let's say that some exchanges or financial companies are more risky (to fail and disappear) than others, so if you don't know the address / private key where your coins are stored, there is a risk that you won't be able to access them.
but there are some "reliable" exchanges and financial companies which provide some good services / deals, so your choice...

you can have a hardware-wallet or paper-wallet, having whatever your BTC is.

the btc is never on the wallet, wether it is paper / software / harware, the btc is stored on the address on the btc ledger, on the nodes of the network.
a wallet is a tool to receive/send coins from/to others addresses... (except the paper wallet which is just to store your address / key)


what i use :
for bitcoin core (btc) :
to generate a btc address / key : bitaddress.org (i generate my addresses / keys offline on a "clean computer" without malwares)
a wallet to manage one (or several) never changing btc address / key : electrum wallet (android) (to store coins)
a wallet which automatically manages always changing btc addresses / keys : bitcoin core wallet (from "bitcoin.org developpers") (to send / receive often, more easy to use)

for bitcoin cash (bch) :
to generate a bch address / key : cashaddress.org (i generate my addresses / keys offline on a "clean computer" without malwares)
a wallet to manage one (or several) never changing bch address / key : electron cash wallet (android) (to store coins)
a wallet which automatically manages always changing bch addresses / keys : bitcoin cash wallet (android) (from "bitcoin.com developpers") (android) (to send / receive often, more easy to use)


the best way to start is to create an account on an exchange, buy a little sum of coins (minimum would be 0.001btc for bitcoin core because btc transaction fees can be as high as 0.0009btc, and minimum would be 0.00001bch for bitcoin cash because bch transaction fees can be as high as 0.000009bch)

then generate a paper wallet (address / private key) and try to send a little sum from the exchange to the address, then use a software wallet to send a little sum from your address to the exchange.

note that bitcoin core (btc) and bitcoin cash (bch) are 2 differents protocols, coins, ledgers, networks, so don't try to send btc to a bch address or to send bch to a btc address. ok ?

[Kryzon]

Thanks Remid! I'm also re-reading this entire thread, a lot of useful info in here.

[RemiD]

since there was a hard fork for bitcoin cash (BCH) in november 2020, i am trying to understand if the old coin / addresses / ledger (BCH) is compatible with the new dominant coin / addresses / ledger (BCHN).

answer : bitcoin cash (BCH) coin, addresses / ledger are the same than before.
BCHN is the name of the new team working on the BCH protocol / coin / ledger.
the old BCH addresses / keys still work like before. bitcoin cash wallet (from "bitcoin.com developpers") and electron cash wallet still work like before.

great