Gold?
The technology behind crypto is resolving this exact "flaw" in fiat currency, and sounds like to me you've just described a major advantage of crypto over any government backed currency?
Any Crypto Investors (Gamblers)?
- Thread starter Worknman
- Start date
Gold?
The technology behind crypto is resolving this exact "flaw" in fiat currency, and sounds like to me you've just described a major advantage of crypto over any government backed currency?
Very few currencies in the world is gold backed. You probably know it already. So it is not Gold
You asked a question, the answer of which is sought by Economists with PhD spending their entire career. They often quite not agree with each other, and sometimes even get it wrong. ?
This is a common man’s common sense summary but to elaborate further we need a face to face session with a few scotches to loosen the tongue ?
1. The intrinsic value of a sovereign currency is a function of the economic activity of the country. GDP is an okay measure
2. The amount of currency is controlled by a Government (Or Governments) through the monetary Policy
3. Inflation, deflation, and other similar economic events are a direct response of general population as a body to the monetary policies
4. As an example of #3 above - Inflation is caused when there is an imbalance of floating cash with the economic activity- Inflation happens till the balance is corrected automatically
5. #1 - #4 is a perfect example of a “Closed” economy
6. Economy in the modern world however is not really closed
7. In an open economy the value of a sovereign currency is further set against each other in the Forex market.
8. Further to #8 above - Any monetary policy of a currency will impact how that currency trades in the Global Forex market
9. Further to #7 above - Balance of Payment is an OK indicator on a currency’s behavior in the Forex market. However it is not a perfect indicator as Sovereign Governments respond to each other’s monetary policy with complimentary policy
10. Whole thing just works - Although some economists would argue it is perfect and others would argue in a sitting time bomb
Now - A currency not backed by a sovereign government will perform extremely poorly against all economic indicators I have given above. It also explains why it does not have any intrinsic value, as it is not backed by any economic activity.
Yes. ?
I totally agree it’s a bubble and it’s going to pop on someone.
The privacy issue is true to a point. Bitcoin for example is anonymous up until the point you go to an exchange and sell it for dollars. At that point your identity is known because the exchanges are indeed heavily regulated. Thats why its not a great tool for criminals to embezzle money as many like to claim in their arguments against bitcoin. A while back Coinbase lost a court case against the IRS which requires them to reveal the identity of their customers and their transactions if they ask. The largest currency for criminal enterprise is in fact the US Dollar.
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I'm a very conservative investor. The greater the reward, the greater the risk. At 64, I don't need the risks or rewards of Bitcoin or any of the other digital currencies. May as well buy lottery tickets.
I honestly am risk intolerant and after I made some good money in the internet bubble, I learned a lot. I have spent the last 20 plus years earning 14%-16% doing private lending. It has been safe and risk free. I made my last trade in the markets in 1999 when I bought Intel at 15 and a week later dumped it at 31 if memory serves. Since then I took my 14% plus and stayed out of the markets and stayed in private lending. . I recently pulled it all out and went to cash until I could see where things were going. I have no appetite for risk at this point in my life.
Yeah I know I am earning less than half a point but I also cannot lose a dime. My money is in FDIC insured banks and never over 250,00.00 in any given bank. When I see what my private lending does over the next 6 months, I might jump back into that game. A world wide pandemic makes me very nervous and I am not going to risk my money until things stabilize. I might be wrong, but I also may be right. I got lucky once as I sold my last business in 2017 when I sold my commercial real estate plaza. Right now I would hate to own it as my tenants would be having a hard time paying rent.
My dad would proud as he always drilled into my head that bulls and bears make money and pigs get slaughtered.
Yeah I know I am earning less than half a point but I also cannot lose a dime. My money is in FDIC insured banks and never over 250,00.00 in any given bank. When I see what my private lending does over the next 6 months, I might jump back into that game. A world wide pandemic makes me very nervous and I am not going to risk my money until things stabilize. I might be wrong, but I also may be right. I got lucky once as I sold my last business in 2017 when I sold my commercial real estate plaza. Right now I would hate to own it as my tenants would be having a hard time paying rent.
My dad would proud as he always drilled into my head that bulls and bears make money and pigs get slaughtered.
Its definitely at risk of popping, but it also has alot more upside potential as well. Its a gamble. One thing Ive often wondered that could pop the bubble is if governments ever decide they're done with it. And they dont even have to ban it to crash the market. All they have to do is set the capital gains tax so high that you could never make any profit. Even talk about this sort of thing by congress could cause a sell off as people rush to take profits before the taxes set in.
I think this is a plan for those of us that are making above 400k, slowly turning into Venezuela.
Gold mining is also an ecological disaster. They leave behind an unbelievable amount of destruction with all the strip mining and toxic chemicals dumped into the local environment, not to mention the carbon footprint involved with processing of the metal. Alot more bitcoin is starting to be mined in places like Iceland using their abundant hydrothermal and geothermal clean energy. Its also colder which means less energy required to cool the equipment.
The interesting thing will be when all the bitcoin is mined and the protocols change.
Agreed. Pretty much every kind of mining is an ecological disaster. Population growth is an ecolological disaster. Human stupidity, self-centeredness, shortsightnedness are all ecological disasters. But all that energy, enormous amounts of it, being used to "mine" bitcoin, do you think it's all just gotten from "clean" energy?
Doubt it as iceland is a very small producer of it and China is a very large producer.
I was referring to gold, physically, as a currency.
But again, I agree with the points you are making. I myself am trying to learn as much as possible about all this and only ask questions to broaden all our understandings (hope it didn't come across as rude).
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I agree Bitcoin is pretty frothy right now, but that does not change my opinion about crypto's overall viability as a currency in the future. Volatility is definitely a major factor here but I'm optimistic about the idea of de-centralized authentication.
I feel there has been a general global drift away from trust in governments and institutions.
But then again, anyone who tells you they *know* what will happen tomorrow is trying to sell you something. I'm just optimistic about the possibilities I guess.
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Risk is a funny thing because it's really all down to how you look at it. Some would argue that holding crypto is a way to minimize your risk of inflation on traditional currencies.
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I think it's success on the black/grey market before it was 'mainstream' is a pretty good safety net for what its baseline can be.
Of course not rude ? I enjoyed this. On the question which I mid-understood...
Gold is a curious case. Gold is an extremely desirable commodity which has stood the time.
I would think Gold’s intrinsic value has remained constant adjusting for inflation. (I have not researched this so just an opinion). Hence it makes an excellent hedge - to protect your principal and/or your favorite currency crashes. If you are invested in Gold, the buying power of your investment would not grow, but it will stay protected.
The interesting thing about the gold market is only 10% is actually used for intrinsic purposes. The rest is jewelry and speculation, and jewelry is becoming less popular with each new generation, being seen as a legacy item by them.
No unfortunately alot is still being mined in China where they don't adhere to the same standards as most western countries.
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If run away inflation happens, there's no hedge to offset it. I'm invested in actively managed funds that are targeted conservatively at present.
Tinkered around with a couple old wallets for some old altcoins, & only one ended up still having an active network. I ended up sticking with the oldskool QT wallet for that one, & I was able to open it & update it. Probably going to stick with the QT wallet for a while so I can run any future updates. One thing I didn't realize about the Klever wallet is that I can't run it on a desktop - at least not without a phone emulator. Anyone running a mobile wallet or hard-wallet? Or even a desktop multi-wallet? Wondering if/what anyone is using.
I have a leather wallet and money clip. Does that qualify?
Way too volatile for my tastes. Being as young as I am, I’m all in on dollar value. I have a small (2% of net worth) screw around portfolio for fun, which I’ve done well with, but to win big, you have to bet big, and I’d rather bet reasonable amounts on a 30 year market than the whole shebang on a 30 day stock, even if that means I retire at 55 instead of 35.
To be honest cryptos are too volatile even for my fun portfolio. I’m a boring wuss. A boring wuss that ain’t going broke any time soon.
By the grace of God I have the means to enjoy my life as it is, and I don’t have a desire strong enough to risk my families current and future welfare for a get rich quick strategy.
To be honest cryptos are too volatile even for my fun portfolio. I’m a boring wuss. A boring wuss that ain’t going broke any time soon.
By the grace of God I have the means to enjoy my life as it is, and I don’t have a desire strong enough to risk my families current and future welfare for a get rich quick strategy.
I hear you, the mobile/ multi wallet scene is new to me too, but it is out there. A lot of things are way up right now, people might want to spend some. It's not that difficult or expensive for people to convert the necessary amount of whatever they have to a USD stablecoin right before purchase & use that to avoid price volatility, & I know all of that can be done from an exchange, & I believe from some of the multi-wallets.