Crypto currency

foobahl

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Excellent question.

I have physical gold and silver, been buying for years. It is a great Zombie Apocalypse insurance, and as an insurance plan, I highly recommend physical gold and silver...meaning something you actually hold in your hand.

BUT...as an investment, gold sucks, and I will try to explain why briefly. First, most gold that is traded on the markets does not actually exist in physical form, it is essentially an IOU for gold. There is a lot more "paper gold", or as I call it "fool's gold", than there is actual gold, and this keeps the price of gold down by diluting the market when necessary. Now, in 2008, when everything came crashing down, many people tried to take delivery on the gold they owned, but they were shorted, many times on the order of 50%, so if you owned 10 ounces of paper gold, you only got 5 ounces delivered, because the banks could not afford to buy enough gold to cover the demands. Here is the crucial part of that tragedy...as demand for delivery went up in 2008, the supply of paper gold on the market increased by 78% in an effort to depress the price, and they STILL couldn't cover the demand for delivery!

So, real gold, physical gold, is many times more valuable than spot price, because spot price is dictated by the supply and demand for paper gold...futures and whatnot, rather than the actual supply of physical gold, and the paper gold is used to depress the price of gold (silver as well) on a permanent, ongoing basis. Essentially, this will keep gold spot price at or below inflation rates, and in a crisis, it will be used to severely lower the price well below what it should be, and it works because very, very few investors actually take delivery.

In conclusion, I strongly favor gold and silver as a store of value for seriously hard times, in a currency collapse and hyperinflation. Anybody will take gold and silver over paper money when the dollar goes into freefall. BUT...if you to make an investment that will appreciate faster than real inflation, gold fails. In 20 years, you will be able to buy the same amount of stuff for an ounce as you can today...you will have preserved wealth, but not gained wealth.

To gain wealth, in real terms, you need investments that will appreciate more than 15% per annum, because that is the rate at which the Fed has been increasing the money supply since 2008, not counting this Covid era. Don't believe what they report as inflation, it is fictional, you should look at the Fed's total money supply per year....M4 is it? I forget. Nothing in today's market will do that, except crypto, as an asset class. If you aren't making over 15% per year on your investments, you're not actually increasing wealth, you're just treading water and not going broke. The numbers get bigger in your portfolio, but so do the price tags of the stuff you could buy with it.
That is pretty much what I was getting at. I am already retired so income growth is not really in the cards here. I am looking at a hedge bet. If the US dollar goes belly up, I was thinking that the best place to have a nest egg is physical gold and silver, because if we go Venezuela (laugh all you want, it is possible) you may not be able to even get internet to play in crypto.
 

Baron Samedi

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That is pretty much what I was getting at. I am already retired so income growth is not really in the cards here. I am looking at a hedge bet. If the US dollar goes belly up, I was thinking that the best place to have a nest egg is physical gold and silver, because if we go Venezuela (laugh all you want, it is possible) you may not be able to even get internet to play in crypto.

I generally agree. There may still be a place for Crypto in your nest egg, though, because crypto can do something that gold cannot, it can be traded over the internet to buy things, and it can be sent to friends or loved ones anywhere in the world in seconds or minutes. Whatever value that may have is up to you, but if you are looking for the crypto equivalent of gold, than Bitcoin, and possibly Etherium, are it. Nothing else, though. I would go Bitcoin for the safer bet.
 

foobahl

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I generally agree. There may still be a place for Crypto in your nest egg, though, because crypto can do something that gold cannot, it can be traded over the internet to buy things, and it can be sent to friends or loved ones anywhere in the world in seconds or minutes. Whatever value that may have is up to you, but if you are looking for the crypto equivalent of gold, than Bitcoin, and possibly Etherium, are it. Nothing else, though. I would go Bitcoin for the safer bet.
thank you and Flagg and BSF for the input. Gives me a little more to chew on.
 

Stevo

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I'm happy to take the "L" on crypto

Makes more sense than investing in something I strongly to believe to be near worthless*

*Near Worthless, but not actually worthless or pointless. Simply inexplicable to imagine (to me) that real/lasting fortunes will be made on digital currency speculation.
 

Baron Samedi

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I'm happy to take the "L" on crypto

Makes more sense than investing in something I strongly to believe to be near worthless*

*Near Worthless, but not actually worthless or pointless. Simply inexplicable to imagine (to me) that real/lasting fortunes will be made on digital currency speculation.

In 5-10 years, all currency will be crypto. The US Dollar as we know it will just be another cryptocurrency. As will the Euro, and the Shekel, and the Yuan, and everything else.

Between now and then, 95% of crypto will be worthless, or nearly worthless. The other 5% will create the new global top 1%.

Kind of like the Dot Bomb bubble of the 90's....but on a much larger scale. Fortunes will be made, and investment funds will suffer when the bubble bursts. When the smoke clears, there will be a new Fortune 500, made almost exclusively of crypto ventures.
 

Stevo

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I feel like you're using a measure of hyperbole here but I'm interested to have you paint this picture more clearly

Your suggesting that the Phone makers, search engines and Social media sites that help recieve ad hominem attacks to your high school friend's uncle are going to be replaced by the early adopters of next gen crypto currency?
 

foobahl

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In 5-10 years, all currency will be crypto. The US Dollar as we know it will just be another cryptocurrency. As will the Euro, and the Shekel, and the Yuan, and everything else.

Between now and then, 95% of crypto will be worthless, or nearly worthless. The other 5% will create the new global top 1%.

Kind of like the Dot Bomb bubble of the 90's....but on a much larger scale. Fortunes will be made, and investment funds will suffer when the bubble bursts. When the smoke clears, there will be a new Fortune 500, made almost exclusively of crypto ventures.
I thought the yuan already went digital.
 

Flagg the Wanderer

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I'm happy to take the "L" on crypto

Makes more sense than investing in something I strongly to believe to be near worthless*

*Near Worthless, but not actually worthless or pointless. Simply inexplicable to imagine (to me) that real/lasting fortunes will be made on digital currency speculation.
We should all remember that only a relative handful of the crypto tokens that are trading actually hold themselves out to be a currency. The vast majority are tokens that have value because they provide a specific functionality having to do with any of a wide variety of uses of blockchain technology.

Basically:
1) Someone developed functionality X (e.g. interoperability across financial systems, automated/seamless collateralization of loans, or automated supply chain tracking with event-triggered automatic payments)
by leveraging blockchain technology of the Y (e.g. Etherium) network,
and to use it, you'll use token Z (e.g. Fetch, Uniswap, EOS).

These tokens have value because they allow these functionalities, and in some cases offer input/voting rights in terms of the development of the tokens/systems/etc.

So it isn't like we're talking about 10,000 tokens that are all trying to replace fiat currencies and we're hoping to pick the right one. These tokens just take the same form as the currency tokens, but are valuable based on what they enable.

So, if you look over some of the sample use cases laid out here and think of the value that any one of those given uses might provide - that's the type of value associated with most of the tokens you see floating around.

That doesn't consider some of the weirder, collectable-type NFTs, which I generally won't touch. Almost all of those are bound for zero, like beanie babies before them. There are some potential use cases for tokens (like buying shares in an athlete or artist's future earnings, for example) that might have some merit, but I need that sort of thing to start to clarify more before I'll bet money on it. It's all still developing, for sure.
 

Baron Samedi

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I thought the yuan already went digital.

Limited test run, but yes, they haven't scrapped the paper Yuan.

EDIT: What Flagg says is right, but there is just so much to wrap your head around in this emerging market, it's hard to not get into the weeds trying to figure it all out.

Crypto in general occupies this wierd space that is a bowl of currency, software, stock, and commodity all combined into one asset, with different aspects of each depending on the coin. If you try to shoehorn it into any one of them, it won't work.
 
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Flagg the Wanderer

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That is pretty much what I was getting at. I am already retired so income growth is not really in the cards here. I am looking at a hedge bet. If the US dollar goes belly up, I was thinking that the best place to have a nest egg is physical gold and silver, because if we go Venezuela (laugh all you want, it is possible) you may not be able to even get internet to play in crypto.
Well, Palantir just bought $50MM in physical gold as a hedge against "a black swan event" so you're in good company. They're also accepting payment in gold or bitcoin. This is a company that makes their living making predictions for government agencies like the CIA and a swath of others.

For whatever that's worth.
 

Big/Sky/Fly

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Well, Palantir just bought $50MM in physical gold as a hedge against "a black swan event" so you're in good company. They're also accepting payment in gold or bitcoin. This is a company that makes their living making predictions for government agencies like the CIA and a swath of others.

For whatever that's worth.
Peter Thiel knows that the dollar is going to tank sooner than later. He also owns Tiberius. Another NWO company.
 

johnlocke

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I don't know an awful lot about Peter Thiel but I have held him as a defender of liberty as he funds and participates in a number of projects with my associates and colleagues.
 

Flagg the Wanderer

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He's smart, but, he's not exactly on "our" side.
He's not a party-line guy. I'd say based on the issues that have seemed important to him historically he probably trends red rather than blue these days. I think he was a Trump backer, if memory serves.

EOS is the driver of his block.one project.
 

Flagg the Wanderer

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New all time high for ADA last night. I admit I didn't gain the full benefit of it, as I did some profit taking at 2.42. took a little SOL off the table as well.

ETH and BTC broke through their last major levels of resistance until their all-time high. One more kinda minor resistance level, but it's a ways up from here.
 

Baron Samedi

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New all time high for ADA last night. I admit I didn't gain the full benefit of it, as I did some profit taking at 2.42. took a little SOL off the table as well.

ETH and BTC broke through their last major levels of resistance until their all-time high. One more kinda minor resistance level, but it's a ways up from here.

Personally, I think you yanked the SOL very, very early. I see it easily going well over $100 short term....but I am no expert.

Congratulations, Flagg! :beer:
 

Big/Sky/Fly

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He's not a party-line guy. I'd say based on the issues that have seemed important to him historically he probably trends red rather than blue these days. I think he was a Trump backer, if memory serves.

EOS is the driver of his block.one project.
That's not what I meant.
 
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