81–90 of 571 posts
Earlier quoted context omitted.
It's more analagous to buying some gold for your investment portfolio than buying a fiat currency that has its inflation under control by a central government.
From the school of thought that I would adhere to (Jack Bogle, Warren Buffet), Gold on its own is not an investment.
Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…
I'll try to use my elevator pitch: With cryptocurrency, you're right they're not an "investment" in the traditional sense. Right now more of a long-term gamble. In my opinion the value is in the network and the ability to move money instantly (or at very least faster than traditional methods), securely, to anywhere in the world for a fraction of a cent. That ability alone is valuable and hasn't existed until now. The…
I spent some time working in a relatively-unknown but high volume clearing bank.
Banks can and do move billions instantly, and have done so for years through SWIFT and ACH. It takes literal seconds for a confirmation to pass through different clearing networks around the world.
Even today, we're seeing banks improve their correspondence networks with each other.
For example, you could have a Transferwise Account where you receive USD and convert to GBP.
If you wanted to move that to a Monzo account, you can do so instantly as Transferwise and Monzo have accounts either with each other or in the same institution.
The bank debits and credits each counterparty immediately.
At the end of the day, it nets its position, then sends its report to the central bank, netting positions between other participants.
Looking at crypto from the outside, I really don't see the added value based on existing infrastructure.
It seems more like a proof of concept rather than a viable long-term asset.
Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…
It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…
But as TFA indicates, there are over 500 other crypto coins. When anyone can create a new one they become irrelevant.
Earlier quoted context omitted.
Any cryptocurrency can be used to move money quickly. So if you buy a cryptocurrency, you are automatically "investing" in that "business". You don't need Transferwise. Bitcoin is the canonical example. The value investment argument for Bitcoin is that you think Bitcoin is (or will become) a good way to move money. You're buying a scarce piece of that utility. === Some cryptocurrencies additionally have other utiliti…
Thanks for the input. It does put things into some perspective but I am still wondering. So something analogous to owning a part of the network, would it be correct to say that, for instance, governments own and auction telecom spectrums to businesses. They do make money out of that ownership through the initial auction price and then potentially tax you later. So a cryptocurrency could be looked at in a similar way…
Another easy analogy would be IP addresses. Early on in the internet huge chunks were just given out for free. Now they're valuable because they're scarce and the demand for them has skyrocketed as the internet grew.
You need spectrum to participate in the radio business (and other kinds of businesses). You need IP addresses to participate in the internet. Similarly you need HNS (as an example) to participate in the Handshake network.
And as with spectrum and IP addresses, there's only a fixed amount of HNS (or at least that is the expectation, the details vary in each cryptocurrency).
Earlier quoted context omitted.
It's more analagous to buying some gold for your investment portfolio than buying a fiat currency that has its inflation under control by a central government.
From the school of thought that I would adhere to (Jack Bogle, Warren Buffet), Gold on its own is not an investment.
Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…
It's more analagous to buying some gold for your investment portfolio than buying a fiat currency that has its inflation under control by a central government.
BTC isn't very good as a currency but acts as a deflationary asset over time (i.e. there is a fixed amount that can exist).
I, personally, hold BTC as part of my portfolio simply because of it's ensured existence and massive upside potential.
I wouldn't put a terrible amount of my net worth into it, but a small fraction may serve you well in the future.
Short story. Had the chance to invest 300k in 2012 (~$10 per coin). Didn't pull the trigger. Too much net worth. However, I should have used ~10k (maybe a little more). Wouldn't be nearly as worried about $ as I am today if I was just a little more conservative on investing up front.
Someone please explain this to me: How is any cryptocurrency even considered an investment vehicle? I would classify myself as Boglehead and I believe in the fundamentals of investing in stocks because in all it's technicality (and given the buy-and-hold strategy), you are investing in a business by owning a part of it which naturally means that you will and do get the returns on it, both in terms of profits (dividen…
Earlier quoted context omitted.
It's analogous to investing money in USD or GBP before those countries were given a license to print as many USD and GBP as they wanted. Before then (1931 for the pound and 1933 for the dollar, though they maintained de-facto parity with gold until 1971), dollars and pounds were considered good investments. That's why we had bank runs: people thought their money would be safer under their mattress, and preferred to o…
>> Not so with Bitcoin: the total supply is fixed at 21M, forever, and there's no central authority with the power to change that. But as TFA indicates, there are over 500 other crypto coins. When anyone can create a new one they become irrelevant.
Tangent question: why do financial services pluralize index as 'indexes' rather than 'indices'? Throws me off every time, and seems to be an industry thing.
Looks like a super common question - nasdaq has an article about it: https://www.nasdaq.com/articles/indexes-or-indices-whats-the...
I’d be interested in an index tracking the prices of San Francisco rents. I’m waiting for the low to buy.