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Cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.)

surlybevo

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“How Elizabeth Holmes’ noble pursuit to save lives stumbled due to technical shortcoming in the product”

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ZB'Tejas

ZB'Tejas 597

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On 7/16/2019 at 3:01 PM, ajax said:

Is the party over? It's been a fun few months.

Not over quite yet but I do think the top is in for this year. Guessing we revisit 8.8K - 9 and then grind back up slowly until next year halving. If we hold here and find a way back up to 12K we might have a shot at a new year high.

I've got positions open from mid 9's that I'm holding and will resort if we retest 10.7

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GRHorn

GRHorn 105

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On 10/25/2019 at 12:18 PM, nycHorn said:

And now China endorses BTC and the whole market skyrockets.

Not quite true. Xi announced China was accelerating development of blockchain technology and they passed some kind of law related to cryptography. It’s assumed they’re pushing to develop their own digital currency. China is anti BTC, but their pursuit of that field of  technology is seen as another confirmation that it’s not going away. 

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ZB'Tejas

ZB'Tejas 597

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Bounced at 6500 even tho really no historical support there. Did get a bit of a relief rally back about 7K... likely have resistance at 7400 and some support at 7020. I'd say we consolidate here for a few days as it decides whether we go back to find new lows or back up toward 10k.

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GRHorn

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Some good news on crypto front. Sen Isakson from Georgia resigned and her appointed replacement for the rest of his term is the former CEO of the Bakkt bitcoin exchange. Kelly Loeffler. She immediately becomes the most high profile crypto advocate on Capitol Hill. 

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52-80

52-80 19377

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I love reading Matt Levine's columns

 

Quote

Cold storage

For a while Bitcoin people got really into putting their Bitcoins in “cold storage” on hardware wallets disconnected from the internet, etching the private keys for the wallets on metal plates, and burying the plates in their backyards. Because Bitcoin was the future of money, see, and the future of money is burying metal in your backyard. 

QuadrigaCX was a large Canadian Bitcoin exchange that had a lot of Bitcoins in cold storage, supposedly, and only its chief executive officer, Gerald Cotten, knew the private keys to get those Bitcoins (or knew where the metal plates with the keys were buried, etc.), and then he died suspiciously on his honeymoon in India and the exchange had to tell all of the investors, oops, sorry, all your Bitcoins are gone. The investors did not like this, not only because all their Bitcoins were gone but also because it turns out that Cotten was a serial operator of exit scams where he took people’s money and disappeared. So when he disappeared with Quadriga’s money, the investors were skeptical. (Of course they were not skeptical before he disappeared with everyone’s money, despite his long history of operating exit scams on the internet; cryptocurrency investors immediately become dogged, brilliant, clear-sighted forensic investigators right after their money is all stolen.)

And so they want to dig up his body, no problem, that’s totally normal:

In a letter to the RCMP, law firm Miller Thomson asked to have the body exhumed because of it’s clients’ large financial losses and uncertainty around Cotten’s death which “in our view, further highlight the need for certainty around the question to whether Mr. Cotten is in fact deceased.”

“Representative Counsel respectfully requests that this process be completed by Spring of 2020, given decomposition concerns,” said Miller Thomson in the letter.

Also maybe the private keys are laser-etched in his tibia! It is all terrible on more levels than I can keep track of. When people tell you that cryptocurrency will enable smart contracts on the blockchain that supersede traditional court systems and automate trust, allowing frictionless commerce with no need for archaic subjective state justice systems, remember the time people asked the police to dig up a corpse to ask it who stole their Bitcoins! 

 

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Blotto

Blotto 24011

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On 12/7/2019 at 12:16 PM, GRHorn said:

Some good news on crypto front. Sen Isakson from Georgia resigned and her appointed replacement for the rest of his term is the former CEO of the Bakkt bitcoin exchange. Kelly Loeffler. She immediately becomes the most high profile crypto advocate on Capitol Hill. 

Hot piece of ass joins Intercontinental Exchange fresh out of MBA school in 2002. By 2004 she has already married the CEO and lines up a job on the C-level. 2018 Intercontinental creates baakt and names her CEO. Gotta respect the hustle/grift. She'll fit right in DC.

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Party_Taco

Party_Taco 3889

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Hot piece of ass joins Intercontinental Exchange fresh out of MBA school in 2002. By 2004 she has already married the CEO and lines up a job on the C-level. 2018 Intercontinental creates baakt and names her CEO. Gotta respect the hustle/grift. She'll fit right in DC.

Reasonable minds can disagree on the definition of a “Hot piece of ass”.

That’s some serious horseface, bruh.
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GrayFox

GrayFox 1

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I first started using Cryptocurrency as a means of payment around 2016/2017. I would buy Steam games, Amazon items through the Purse.IO, pay friends back and gamble all with various cryptocurrencies. It was nice... Until I realized how much I would've "gained" if I just HODL'd. This is something common in the crypto sphere.

 

For example one time I bought a phone in 2016/2017, something like a $400 value, when Bitcoin was around or less than $1k/BTC. It felt pretty crappy when BTC shot up to 19k in the next year or two. If I had not used Bitcoin for this purchase, my $400 would be worth nearly 20x the value. Huh.

 

For years to come, I would see more and more people not use Cryptocurrency as a P2P payment system, but instead treating it as an equity or asset. How can something so volatile, yet so promising be treated like a commodity or an equity? My theory is greed and a misunderstanding of the underlying value provided by the tech and economics behind Bitcoin, Ethereum, Monero, etc.

 

This causes cryptocurrencies across the board to be more undervalued than they already are. I hope people will eventually adopt crypto as a means of payment. That's probably the only way we will see the "exchange price" reflect the underlying value.

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Nice Guy Eddie

Nice Guy Eddie 13725

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On 12/27/2019 at 5:12 PM, GrayFox said:

I first started using Cryptocurrency as a means of payment around 2016/2017. I would buy Steam games, Amazon items through the Purse.IO, pay friends back and gamble all with various cryptocurrencies. It was nice... Until I realized how much I would've "gained" if I just HODL'd. This is something common in the crypto sphere.

 

For example one time I bought a phone in 2016/2017, something like a $400 value, when Bitcoin was around or less than $1k/BTC. It felt pretty crappy when BTC shot up to 19k in the next year or two. If I had not used Bitcoin for this purchase, my $400 would be worth nearly 20x the value. Huh.

 

For years to come, I would see more and more people not use Cryptocurrency as a P2P payment system, but instead treating it as an equity or asset. How can something so volatile, yet so promising be treated like a commodity or an equity? My theory is greed and a misunderstanding of the underlying value provided by the tech and economics behind Bitcoin, Ethereum, Monero, etc.

 

This causes cryptocurrencies across the board to be more undervalued than they already are. I hope people will eventually adopt crypto as a means of payment. That's probably the only way we will see the "exchange price" reflect the underlying value.

You basically sold an investment that later shot up. I wouldn't beat yourself up for that. Every investor has stories like that.  If you really believe that a crypto or stock or whatever has potential, then never sell all of it.

And you're right that crypto doesn't currently work very well for transactions. For one, you actually create a taxable transaction with the IRS when you buy something with bitcoin. In theory you're supposed to report the capital gain/loss for every sell of bitcoin (any crypto) whether for dollars, other crypto or some product.  How crazy would it be to buy a coffee at Starbucks for the bitcoin equivalent of $5, and owe the IRS $.25 for the capital gain tax.

on a related note, the draft version of the 2019 IRS 1040 Schedule 1 asks you if you transacted with any virtual currency in 2019. Yes/No.  No other details asked. Something tells me that if/when you answer Yes to that question, they will never forget it.  https://www.irs.gov/pub/irs-dft/f1040s1--dft.pdf

My guess is that it will only be a matter of time for them to ask for your wallet address(es.) "Mr. Taxpayer - you indicated in 2019 that you transacted in virtual currency.  Based on our interpretation of the law, you MUST provide all current and previous virtual wallet addresses that you've used regardless of the current balance. Failure to do so will ....."

 

 

 

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GrayFox

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25 minutes ago, Nice Guy Eddie said:

You basically sold an investment that later shot up. I wouldn't beat yourself up for that. Every investor has stories like that.  If you really believe that a crypto or stock or whatever has potential, then never sell all of it.

And you're right that crypto doesn't currently work very well for transactions. For one, you actually create a taxable transaction with the IRS when you buy something with bitcoin. In theory you're supposed to report the capital gain/loss for every sell of bitcoin (any crypto) whether for dollars, other crypto or some product.  How crazy would it be to buy a coffee at Starbucks for the bitcoin equivalent of $5, and owe the IRS $.25 for the capital gain tax.

on a related note, the draft version of the 2019 IRS 1040 Schedule 1 asks you if you transacted with any virtual currency in 2019. Yes/No.  No other details asked. Something tells me that if/when you answer Yes to that question, they will never forget it.  https://www.irs.gov/pub/irs-dft/f1040s1--dft.pdf

My guess is that it will only be a matter of time for them to ask for your wallet address(es.) "Mr. Taxpayer - you indicated in 2019 that you transacted in virtual currency.  Based on our interpretation of the law, you MUST provide all current and previous virtual wallet addresses that you've used regardless of the current balance. Failure to do so will ....."

 

 

 

I think you missed the point I was trying to make about crypto-currency.
 

You don't buy a hamburger with your MSFT shares. You don't buy a BMW w/ gold. You spend cash on all of that. This idea is what I hold for cryptocurrency, whether people see it this way or not is a different story.

 

Currency is a faith system that we all need to believe in for it to work, otherwise it's useless.

It's pretty obvious everyone sees it differently, just like how people saw the ARPANET differently. Ideas and perspectives changes over time, and the same will occur for blockchain.

Regarding the IRS, yes, I pay my gains taxes like most everyone else. I'm not expecting any leniency now or in the indefinite future, which is why I do my research into these things and cover my ass.

 

But will they ever request all previous Bitcoin addresses? I think it's interesting to ask these types of questions, but you should come up with follow up questions too. For example on enforcement. Kind of like with the drug war, it's hard to enforce unrealistic policies.

 

You should Look into what it means to be anonymous vs private. Depending on how you do it, your addresses can be anonymous, meaning pinning your identity to any Blockchain address is... Hard. Which is why enforcing anything with crypto is hard. Transactions can potentially occur between two anonymous parties.

 

This is when you get into Blockchain forensics...

 

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GRHorn

GRHorn 105

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On 1/2/2020 at 12:17 PM, GrayFox said:

I think you missed the point I was trying to make about crypto-currency.
 

You don't buy a hamburger with your MSFT shares. You don't buy a BMW w/ gold. You spend cash on all of that. This idea is what I hold for cryptocurrency, whether people see it this way or not is a different story.

 

Currency is a faith system that we all need to believe in for it to work, otherwise it's useless.

It's pretty obvious everyone sees it differently, just like how people saw the ARPANET differently. Ideas and perspectives changes over time, and the same will occur for blockchain.

Regarding the IRS, yes, I pay my gains taxes like most everyone else. I'm not expecting any leniency now or in the indefinite future, which is why I do my research into these things and cover my ass.

 

But will they ever request all previous Bitcoin addresses? I think it's interesting to ask these types of questions, but you should come up with follow up questions too. For example on enforcement. Kind of like with the drug war, it's hard to enforce unrealistic policies.

 

You should Look into what it means to be anonymous vs private. Depending on how you do it, your addresses can be anonymous, meaning pinning your identity to any Blockchain address is... Hard. Which is why enforcing anything with crypto is hard. Transactions can potentially occur between two anonymous parties.

 

This is when you get into Blockchain forensics...

 

I need to read up on it, but evidently coinjoining is new feature that can help boost privacy. There’s also a lot of people that believe if the Lightning Network succeeds it will greatly improve privacy of the transactions. 
 

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GrayFox

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18 minutes ago, GRHorn said:

On a side note with all the Middle East uncertainty, nice to see BTC react as a safe haven asset. Behaving like digital gold which is its best use case. 

@GRHornCan you please elaborate on this? I'm not sure how you drew a connection between issues w/ Iran and the exchange rate for Bitcoin, especially since Iran prohibits the use of cryptocurrency: https://www.loc.gov/law/help/cryptocurrency/iran.php

Also don't you think the rich would be hedging against economic/political uncertainty w/ actual Gold instead of something as volatile as cryptocurrency? It's probably easier and safer to buy large sums of gold than cryptocurrency.

 

Also, the term "digital gold" for Bitcoin is misleading, I'm surprised I still see it around. If you didn't know, the term was mostly used by advocates of high transaction fees directly correlated to network congestion due scalability issues. Imagine miners charging $3 to make a $10 payment. They would advocate that Bitcoin can/should be used as a store of value instead of a widely used P2P payment system, which was not the original intention for Bitcoin.


I once bought a website domain years ago using Bitcoin and was surprised to see my transaction fee would be a large fraction of the costs for the domain, but due to the anonymity it provided I was willing to make a donation to the crypto miners of China. Talk about "digital gold", "store of value" is counter productive and just sets back the adoption of this technology by businesses around the world, which keeps the real world value of it low.

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GRHorn

GRHorn 105

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1 hour ago, GrayFox said:

@GRHornCan you please elaborate on this? I'm not sure how you drew a connection between issues w/ Iran and the exchange rate for Bitcoin, especially since Iran prohibits the use of cryptocurrency: https://www.loc.gov/law/help/cryptocurrency/iran.php

Also don't you think the rich would be hedging against economic/political uncertainty w/ actual Gold instead of something as volatile as cryptocurrency? It's probably easier and safer to buy large sums of gold than cryptocurrency.

 

Also, the term "digital gold" for Bitcoin is misleading, I'm surprised I still see it around. If you didn't know, the term was mostly used by advocates of high transaction fees directly correlated to network congestion due scalability issues. Imagine miners charging $3 to make a $10 payment. They would advocate that Bitcoin can/should be used as a store of value instead of a widely used P2P payment system, which was not the original intention for Bitcoin.


I once bought a website domain years ago using Bitcoin and was surprised to see my transaction fee would be a large fraction of the costs for the domain, but due to the anonymity it provided I was willing to make a donation to the crypto miners of China. Talk about "digital gold", "store of value" is counter productive and just sets back the adoption of this technology by businesses around the world, which keeps the real world value of it low.

I didn't mean Iranians specifically buying it, I meant it behaved like a safe haven asset. It rose in concert with gold in response to sudden, significant geopolitical event.

I think BTC over time will eat into gold's monetary premium. It's superior in just about every way, except for the amount of time that gold's been accepted as money.

As far as the debate between store of value vs medium of exchange being BTC's use case or original intention, I think there's vastly more value to a unconfiscatable, uncensorable, reliably scarce store of value than a digital payment system that is clunkier than what already exists. BTC may evolve to be quicker and better for small payments, but that's not where it's value proposition comes from now.

Here's a good paper that breaks down that line of thinking. Part of it also talks about why utility tokens and blockchains may eventually be viable, but that the tokens won't accrue much value. Thus no point in buying Eth. But that's another point.

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor's+Take+on+Cryptoassets+v6.pdf

 

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