CryptoCurrencies?

[JD Spydo]

I fear that if the USA goes through something similar that cryptocurrencies and/or precious metals might at least give you something to buy food with if nothing else. Correct me if you believe my thinking is wrong?

Correct me if I'm wrong, but don't you need internet access, or at least cell phone access, to use cryptocurrency? If so, then it's not much use if the grid goes down. As for precious metals, be careful, there's apparently a lot of fake gold in China. :eek:

I'm not much worried about a fake gold coin. I've handled so many of the popular one ounce gold coins over the years ( Krugerrands, Maple Leafs ect) that it would take a pretty well made fake to fool me at this point. I've never handled anything that has the feel of real gold>> gold has a "feel" to it unlike any other metal I've ever handled.. There is just something about the weight and mass and density of real gold that would be really difficult to counterfeit, fake or imitate.

I can't for the life of me see how they could "fake" or imitate real gold :confused: Unless someone who is inexperienced would deem it to be gold by appearance alone. Because nothing I've ever handled has the same properties that gold does.

Point taken, JD, However, your original post never specified gold coins and the fake gold in China I was referring to was gold bars, tons of them, used as collateral for bank loans there. I'd imagine a tungsten bar plated with, for example, 1/8" of gold might be a lot harder to spot that a fake Krugerrand.

Yeah you got a point there. I never thought of anyone being fooled by a fake gold bullion bar ( 50 lbs or bigger). I would have to think that whoever would do a trade of that magnitude would have an expert on hand to validate and authenticate real gold. Getting burned on a Krugerrand would make you angry>> but burning a big business entity with fake gold bars could literally start wars. People that play with that type of money wouldn't take a rip-off very well at all. That could indeed get someone killed>> if not several people involved :eek:

I never realized or even heard that Tungsten had a similar weight and mass as gold. However I doubt they would trade with several gold bars without authenticating it. But in another sense China sure has been flexing their muscles a lot lately. Which is why I go out of my way not to buy Chinese products.

But I do get your overall point because these CryptoCurrencies are going to open a "Pandora's Box" of possibilities. Which is why I want to know a lot more about them before I venture into that arena. But yes I do see where you're coming from.

[shunsui]

A good video on some tax implications of coins vs bullion for investors.

https://youtu.be/SRhuwoa4lIs

[JD Spydo]

Interesting that this thread would pop back up again during this turbulent time we've been going through. Because I have been thinking about the CryptoCurrencies again lately. But I still have a few questions that I haven't gotten satisfactory answers for as of yet.

Where do you acquire these Crypto Currencies? Where or how would you redeem them? Is there any way you could take a physical possession of them?>> or at least something that is representative of how many units you own?

Because for right now it seems like most of them are operating on some type of cyber-digital system and that kind of bothers me.

[TomAiello]

Where do you acquire these Crypto Currencies?

Lots of places. You can buy them in multiple apps on your phone these days, as well as dozens of websites.

Where or how would you redeem them?

You link your account back to your online banking, so you can transfer money into your bank account. You can also have them mail you a check, in most cases. It's basically identical in process to buying/selling a mutual fund.

Is there any way you could take a physical possession of them? >> or at least something that is representative of how many units you own?

No. It's just like buying/selling a mutual fund, or an ETF, or even a stock. You keep them in your 'brokerage' account. There's no way to take physical possession of any of those things, because they don't have a physical form.

Because for right now it seems like most of them are operating on some type of cyber-digital system and that kind of bothers me.

92% of the money in circulation in the world (yes, that includes US dollars) is digital only--no physical form.

If cyber-digital systems bother you, you probably don't want to hold US dollars at all, because they are pretty much a cyber-digital system. 90% of the US dollars ever printed were simply created in a computer--never physically 'printed' at all.

[JD Spydo]

Where do you acquire these Crypto Currencies?

Lots of places. You can buy them in multiple apps on your phone these days, as well as dozens of websites.

Where or how would you redeem them?

You link your account back to your online banking, so you can transfer money into your bank account. You can also have them mail you a check, in most cases. It's basically identical in process to buying/selling a mutual fund.

Is there any way you could take a physical possession of them? >> or at least something that is representative of how many units you own?

No. It's just like buying/selling a mutual fund, or an ETF, or even a stock. You keep them in your 'brokerage' account. There's no way to take physical possession of any of those things, because they don't have a physical form.

Because for right now it seems like most of them are operating on some type of cyber-digital system and that kind of bothers me.

92% of the money in circulation in the world (yes, that includes US dollars) is digital only--no physical form.

If cyber-digital systems bother you, you probably don't want to hold US dollars at all, because they are pretty much a cyber-digital system. 90% of the US dollars ever printed were simply created in a computer--never physically 'printed' at all.

Well thank you Tom :) You can't believe how many people I've asked those basic questions and couldn't get any straight, solid answers. And I'm including two pals that have used BitCoin.

Right now at this time I'm a bit hesitant to dive in because two financial gurus I have a lot of respect for have been recently said that BitCoin is trading at a very lofty level and both of them have also recently stated that "NOW" is not an ideal time to get in.

Both Gerald Celente and precious metals expert Jeffrey Bennett who both seem to have solid reputations both seem to think that bullion at this time is a good play. But I'm sure the Cryptos at some point will be a screaming "buy".

Right now at this present time I've been buying some junk silver coins and some one ounce US Silver Eagles. One big selling point I've always liked about precious metals is that they are real money and are usually always easily redeemable.

One thing I've been trying to find out lately is which CryptoCurrency is maybe a close second to BitCoin? Assuming that BitCoin is still at the top I'm wondering which other CryptoCurrency has just as much liquidity?

[TomAiello]

One thing I've been trying to find out lately is which CryptoCurrency is maybe a close second to BitCoin? Assuming that BitCoin is still at the top I'm wondering which other CryptoCurrency has just as much liquidity?

Ethereum. It's definitely the 'second' crypto.

https://ethereum.org/en/
https://entethalliance.org



Market cap rankings are here: https://uk.advfn.com/cryptocurrency

[ilsaban]

I'm sure it's second of all time

[Araignee]

Lately I've been using the Crypto.com debit card, and it's pretty neat. You get a small cashback (paid in crypto) most of the time you use your card for shopping.

With my card tier I get 3% back, which are credited immediately after the purchase on my Crypto.com account.
I also get a 10% annual return on the crypto I had to deposit in order to get the card, paid weekly (also in crypto).

[RustyIron]

You can't believe how many people I've asked those basic questions and couldn't get any straight, solid answers. And I'm including two pals that have used BitCoin.

Hey, JD.
I've pondered cryptocurrencies a little, and have written them off as some newfangled fad that won't last. My foremost thought is that it is supposed to be a type of currency, but you can't really buy anything with it. Can I go out for lunch today and pay in bitcoin? No. Can I preorder a Spyderco Stovepipe and pay in bitcoin? No. Can I go to the mall and buy a new pair of shoes with bitcoin? No. So while the proponents will surely find exceptions, cryptocurrencies aren't really what comes to my mind when I think of money.

When asked what he thought about a particular industry, Warren Buffet once replied that he doesn't invest in areas that he doesn't understand. I might be totally mistaken about cryptocurrencies, but I'm content taking the Buffet approach. I don't understand it, so I'm not going to put my money there.

What I would ask someone is WHY they want to buy cryptocurrency. It's a rhetorical question, but a response I would expect to hear is wealth accumulation. For me, the dinosaur, taking money from my bank and sticking it in my iPhone is not a method of wealth accumulation that I understand. For a simple man like me, there are more reliable ways to make money:

1. Work. Get a job, save money, accumulate wealth.

2. Take some cash from Step 1 and invest in something that generates cash flow. Real estate generates cash flow. Flour and sugar generate cash flow when you bake them into cookies. Opening a retail knife store generates cash flow. All can accumulate wealth.

3. Take some cash from Steps 1 and 2 and invest in OTHER PEOPLE'S enterprises that generate cash flow. I can take my money and buy a small piece of an existing company. If I think that Exxon-Mobil is undervalued, I can buy some of that, and get a small share of the billions they make annually. Or maybe it's Microsoft... or Pfizer... or GM... you get the idea. Stocks are a proven avenue of wealth generation.

4. Some folks who are smarter than me trade commodities like gold, silver, and pork bellies. I don't really have an opinion of my own on this, but hopefully I can quote Buffet again without wrecking his intent. He said that commodities like this don't grow. Their prices can fluctuate, but it's companies that grow, and that's where investment opportunities lie. You can have some guy and his family working out of a van, selling sharpeners at swap meets, and eventually they grow into a giant corporation. That's growth. Commodity fluctuations are not that. But folks accumulate wealth trading commodities.

5. Investment in currencies, to me, isn't unlike the commodities. Suppose you had a dollar two years ago. With current inflation, it would be worth less today. One might argue that if you bought a dollar today, it might be worth a more in a year or two. That could very well be the case. Holy cow! Just typing about this is stressing me out. No wonder so many currency traders have heart attacks and die in their 50's.


So the question gets back to why so many young folks nowadays are jumping on the Bitcoin Wagon. My dusty old brain concludes that many don't want to participate in Step 1. They're looking for the fast track to live like Cardi B and the Kardashians. Personally, I don't know anyone who has gotten rich through buying their groceries with bitcoins.

[Naperville]

See: Greater Fool Theory

The Motley Fool had a story on it a while ago.

[TomAiello]

Personally, I don't know anyone who has gotten rich through buying their groceries with bitcoins.

I think what you're looking for is a real world use case for cryptocurrency.

The largest real world use cases are in the banking and finance industries.

Several years ago, I sent $1250 to New Zealand via the traditional banking system. Here's how that went;

I went to my bank (Wells Fargo Bank) branch here in Idaho to send the wire to someone in New Zealand. I had their bank account information (including the incredibly wrongly named 'SWIFT' code).

My bank looked at the information, took my $1250, plus a $25 fee, and then sent a fax (a piece of technology that I wasn't even really aware anyone was still using) to another bank in a larger city in the USA. My bank told me that some 'small fees' might be taken out by other banks during the transfer process.

That second bank took a fee ($40) and sent a fax to yet another American bank. This one was a 'money center' bank in San Francisco. They 'received' my $1250, but only sent on $1210 (because they deducted their fee).

I find this bit incredibly odd, because the 'money center' bank that received the fax in San Francisco was actually Wells Fargo. But, since this was another Wells Fargo, they took yet another fee ($50). They then sent another fax to a bank in Japan, 'transferring' my $1160 to them.

The bank in Japan took a 'small fee' out (roughly $25, but with the foreign exchange transaction fee, because their fee was being collected in Yen, not dollars, it came to about $60). They then sent my $1100 on to a bank in Sydney, Australia.

The Australian bank then sent another fax to a large bank in New Zealand, minus their own fee of roughly US$40, along with another foreign exchange fee (since their fee was actually assessed in Australian dollars), bringing the total being transferred down to about $1000, which was 'received' by the money center bank in New Zealand.

The New Zealand bank then sent another fax to a smaller bank in New Zealand (the one that I was actually trying to get the money to). Along the way they converted my transfer to NZ Dollars (for a small 10% fee--about another $100) and also took a transfer fee (about $40 worth, once you converted to US dollars).

In the end, the person I was transferring the money to received about US$860 from my original $1250. The total transfer process took 8 days.



The next time I had to send money internationally, I used Align Commerce (now called Veem) which runs their transfers via the Bitcoin network. They charged me slightly less than 1%, and the money was in the account I was sending it to within 30 minutes. Had I used the bitcoin network directly (rather than through a commercial intermediary) it would have cost even less and been even faster (10 minutes or so).


It seems to me that the people looking to 'get rich quick without doing any real work' aren't the bitcoin folks--but rather the traditional banking system, that took almost a third of the money I was transferring, and took more than a week to transfer it.

If I have a choice between using cryptocurrency to transfer money and getting pillaged by the legacy banking system, I'm going to use cryptocurrency every single time.



I have definitely played around with buying small amounts of cryptocurrencies (never more than $500, usually a smaller amount). The reason I am interested in them is because of the obviously superior system they represent for a very practical, real world use for my business. I have worked hard to build multiple businesses (not in cryptocurrency) over the last several decades, and have achieved reasonable success in doing so. My uses for cryptocurrency are generally functional--not speculative. The money I'm moving with cryptocurrency wasn't made by day trading bitcoin. I'm not a lazy kid. I drive a 20 year old used car. I have no plans to live like Cardi B (I honestly have no idea who that is, so I'm just grabbing the name out of your post). But given my experiences with the banking industry, I'm not (at all) happy to put my money in a bank, or to use their insanely overpriced and unreliable services.

[MacLaren]

The first thing I think about Crypto currency is money laundering. To me, it seem like a way for the rich to avoid paying taxes. However, I am totally ignorant to the whole process.
I will say though, that my 1st Cousin and her husband, Tom Murphy = Alpha Virtual had hit billionaire status a while back. Tom's a big computer guy. Went to RIT.
Wished my cousin would've tipped me off to bitcoin lol.
Also, Tom is also a CAMS. Certified Anti Money Laundering Specilaist.
Lol, I find that harious. Does the Crypto Industry regulate itself?
Again, I'm ignorant to it.

[TomAiello]

Does the Crypto Industry regulate itself?

Yes, in a general sense, much like the banking industry.

Crypto exchanges are also regulated by the government. In the USA, the SEC regulates them, but which agency does the regulation varies in other countries (pretty much just like stock markets).

[PineyBoy]

My son has been involved with cryptocurrencies for some time now and does extremely well. I totally don't understand the concept and stick with the stock market. He has made well in the 7 figures over the last few years, but you have to have big money in your pocket to be able to invest in the right way. He does...I don't!

[MacLaren]

Does the Crypto Industry regulate itself?

Yes, in a general sense, much like the banking industry.

Crypto exchanges are also regulated by the government. In the USA, the SEC regulates them, but which agency does the regulation varies in other countries (pretty much just like stock markets).

Ahhhh......ok. thanks for the info Tom.

[RustyIron]

I think what you're looking for is a real world use case for cryptocurrency.

The largest real world use cases are in the banking and finance industries.

Hmmm... I can see the potential for international money transfers. I've had many sleepless nights fretting about just that. I play with toys that require transfers occasionally. The first time I did a deal years ago, I about soiled my pants. When I say "the money will be in your account tomorrow, my time," what I mean is, "the money will be in your account tomorrow, my time." I was flabbergasted to learn that the money goes from my bank, to another local bank, to their parent bank in New York, to their cohort in the capitol of the foreign country, and then into the bank where I want it to go.

The next time, I thought I'd be clever and open an account at the bank that actually does the international transfer. I waited 45 minutes to sit down with the manager. I told her what and why I needed to do this, and then offered to open an account with her. She informed me that the money would have to stay in the bank for 30 days before she could transfer it. I replied, "Wait, I said I would open an account with TWICE as munch as I want to transfer. It's coming from a bank just down the street. I need the money transferred tomorrow." And she said she couldn't do it. I vowed never to deal with her company in any way. I won't name names, but they go by the initials B of A.

From then on, whenever I bought something, I'd be up front and remind my counterpart that bankers are puppet masters and crooks, so it might take a week or more until you see the money. When it's put like that, everyone understands.

I'm still not ready to jump on the bandwagon, but next time I find myself in such a quandary, I"ll remember what you said.

[TomAiello]

I'm still not ready to jump on the bandwagon, but next time I find myself in such a quandary, I"ll remember what you said.

Check out Veem or Transferwise. You don't have to know anything about crypto to benefit from their use of it. They do it all (quite seamlessly) for you.

[TomAiello]

FWIW, I have also accepted cryptocurrency as payment for my own business services on multiple occasions, and found those transfers to be both faster and cheaper than my normal credit card payment processors (I have two, for different business processes). The improvements in both speed and convenience have tempted me to offer a discount for payments in cryptocurrency, which I may still decide to do in the future.

[Araignee]

If you want to send money abroad, there's a perfect cryptocurrency for that : Nano.
It's fast and, importantly, completely free. There are no so-called "gas fees" involved to perform a transaction.

FWIW, I have also accepted cryptocurrency as payment for my own business services on multiple occasions, and found those transfers to be both faster and cheaper than my normal credit card payment processors (I have two, for different business processes). The improvements in both speed and convenience have tempted me to offer a discount for payments in cryptocurrency, which I may still decide to do in the future.

In case you're interested in accepting Nano, this page for merchants could be useful : https://hub.nano.org/i/merchant-solutions/5

[Soanso McMasters]

In the very early going of bitcoin a friend stumbled upon a job at a place called butterfly labs producing bitcoin miners. The hash rate had only recently become too taxing for GPUs and they were early in the mining game. I bought a miner for $180 and a dedicated laptop and started mining. Over a few months I earned 7 Bitcoins. This was before anyone knew what to make of it all and the IRS had extremely messed up rules. In order to turn bitcoin into dollars they were going to require people to register as a bank so my next best option was a place to exchange bitcoins for gift cards. Bitcoin “blew up” and hit $100 so I cashed out….