Cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.)

[Captainant 27442]

47 minutes ago, Parliament said:

How many actual currency-type transactions is Bitcoin used for?

Better question: who has actually used Bitcoin to buy a real thing? 

Spoiler

I have, and it was incredibly unpleasant even as a very technical user

 

[tbone_ 14020]

My BIL converted a hella gain in Cardano to cash to make a down payment on a beach house.

He said it was a lot of fun convincing his lender the funds came from a legit source.

[CHIEF 5071]

We have a family friend (DK) that owns multiple businesses, planes, big offshore boats, etc.. I didn't go to the 19th Hole last night, but CHIEF Jr. did. Someone brought up that Bitcoin was through the roof. DK isn't the most computer savvy, but brought up that he had bought seven bitcoin for $4600 a pop, but hadn't gotten around to selling them because it was complicated. A guy that is a regular bitcoin investor showed him how to sell them. CHIEF Jr. said they watched $719k go into his account, needless to say he picked up everybody's bar tab.

CHIEF

[Nice Guy Eddie 13410]

For those who don't know the first bitcoin real world purchase was 2 pizzas for 10,000 bitcoin in 2010. I hope the guy at least got 2 large supreme pizzas for what is now $910 million. (At the time, at best the 10K bitcoins were worth $20 so it wasn't an absurd cost.)

but seriously it can be painful to pay via bitcoin because frankly the system is not designed to go fast. You would never buy a coffee with bitcoin with its basic tech. Now if you transfer something like ETH or USDC via the polygon network, the funds are moved before you can even refresh the page or app. 

30 minutes ago, CHIEF said:

We have a family friend (DK) that owns multiple businesses, planes, big offshore boats, etc.. I didn't go to the 19th Hole last night, but CHIEF Jr. did. Someone brought up that Bitcoin was through the roof. DK isn't the most computer savvy, but brought up that he had bought seven bitcoin for $4600 a pop, but hadn't gotten around to selling them because it was complicated. A guy that is a regular bitcoin investor showed him how to sell them. CHIEF Jr. said they watched $719k go into his account, needless to say he picked up everybody's bar tab.

CHIEF

I hope the guy somewhat realized that he was incurring an ~$700K capital gain and thought through the tax implications. But I love stories like this. 

[bernorange 8348]

FWIW:

 

[Captainant 27442]

13 minutes ago, Nice Guy Eddie said:

but seriously it can be painful to pay via bitcoin because frankly the system is not designed to go fast. You would never buy a coffee with bitcoin with its basic tech. Now if you transfer something like ETH or USDC via the polygon network, the funds are moved before you can even refresh the page or app. 

Not only that - transactions are processed in 10 minute batches. And if your TX doesn't get picked up in that block, you're stuck waiting for an undefined (but usually just another 10-20 minutes) period of time. Or you can pay ever high TX fees to have a better chance of miners adding your TX to the next block.

 

But, I get it. It's not about utility, it's about making money off of FOMO and creating a new type of unregulated financial instrument that can be leveraged for gains

[CHIEF 5071]

13 minutes ago, Nice Guy Eddie said:

For those who don't know the first bitcoin real world purchase was 2 pizzas for 10,000 bitcoin in 2010. I hope the guy at least got 2 large supreme pizzas for what is now $910 million. (At the time, at best the 10K bitcoins were worth $20 so it wasn't an absurd cost.)

but seriously it can be painful to pay via bitcoin because frankly the system is not designed to go fast. You would never buy a coffee with bitcoin with its basic tech. Now if you transfer something like ETH or USDC via the polygon network, the funds are moved before you can even refresh the page or app. 

I hope the guy somewhat realized that he was incurring an ~$700K capital gain and thought through the tax implications. But I love stories like this. 

He got completely out of bitcoin. He is a retired rodeo star, he bought it for the novelty, but really had no idea how to purchase anything with it. He has enough business expenses to lessen the tax implications. But as Mrs. CHIEF said, "I bet his accountant wants to kick his ass every year."

CHIEF

[Nice Guy Eddie 13410]

As a cautious bitcoin evangelist, I think stories from @CHIEF are still potentially possible if someone gets into bitcoin today.

Forgetting the per-bitcoin price, his friend basically turned $30K into $700K.  Is there still room for a >20x return if someone got into bitcoin today?  While it seem crazy to think that bitcoin could ever approach a $2m/bitcoin price, someone would have had previously said the same of $90K. 

I've seen estimates of the global gold market at $19T whereas bitcoin is at $1.75T today. I think there's a strong argument that bitcoin could catch if not surpass gold. That simple math takes btc to $1m each. Now if sovereign funds (middle east, norway, perhaps the US or EU) would get into the mix, no one has any idea what that would do it. 

Or bitcoin could be worth a few pennies next year. who knows. But if you invested $30K today, your max loss is 30K with an arguable potential gain of >10x.