I know a bloke who has just been hired – few weeks back – to write about crypto. And not in a “flee the building!” type sense. It’s ever so difficult not to feel a certain sympathy for the problems he’s having over story selection…..
I know a bloke who has just been hired – few weeks back – to write about crypto. And not in a “flee the building!” type sense. It’s ever so difficult not to feel a certain sympathy for the problems he’s having over story selection…..
Like any speculative investing, you should only invest money that you can afford to lose. I am still investing in BitCoin. A good time to do so as it’s value is relatively low. If it goes tits up, I’ve only a lost a small amount. If it recovers I’ll have done very well.
@SBML… I can’t see how any of the cryptocurrencies can have an intrinsic value, they’re just electronic tulipomania without the pretty flowers, so it’s purely a gamble based upon the level of “suckerness” in society-at-large.
That said, some people have done spectacularly well out of them – but so did the family that won £195 million on the lottery last week. 🙂
I would have thought that any investment in an illiquid* asset such as BitCoin with literally £0 intrinsic value was at best gambling and at worst foolishness.
Your money, I guess.
* – illiquid in the sense of it being difficult to sell when market is volatile.
Well, there are people like me who played around with it as a fun tech toy to learn about, and are still considerably up on their starting position.
Maybe I should have sold it all a few months ago, but that would have been gambling 😀
I do wish I played around with it back then about 20x more than I did, though.
there are people like me who played around with it as a fun tech toy to learn about, and are still considerably up on their starting position.
This is pretty much the only group of people who have made decent money out of crypto, apart from the originators of the various ponzi schemes.
I can’t understand why anyone would invest in crypto. There’s nothing there to invest in. It’s just speculation at the high risk end.
I play around in the ForX market between the £ & the €. Been quite remunerative. But it’s nothing better than gambling. If people started “investing” in £’s or €’s it’d make UK/EU trade virtually impossible. Why “investing” in crypto has fucked crypto as a medium of commerce.
“I do wish I played around with it back then about 20x more than I did, though.”
Things are so much easier in hindsight, aren’t they. But think of what you would have done if you had gone in heavier. You’d have had more at stake. Would you have turned down a hefty profit earlier in the time-line? If you cashed out now you might be be making the same as if you’d have cashed out then.
Old stock exchange saw. It is never wrong to take a profit. It’s how you get rich.
Tim
Maybe it’s a Mozilla Issue but I can’t seem to ‘get’ at the latest post on Murphy…..
So if I understand it correctly, the consensus seems to be ‘I don’t / haven’t put the hours in / don’t have the tech nous/ to understand it, but you shouldn’t invest in it’ ?
We’ve (obviously quite rightly) massacred Murphy for less.
Not really. To me crypto in all forms fails the basic value test because it has no intrinsic value, sure there might be people prepared to pay $10,000 for it right now, but tomorrow it could be worthless just like the tulips were during Tulip Mania. At least those you could plant and have a tulip.
Since it fails that fundamental of having no intrinsic value, its not an asset is it (at least in any meaningful sense), it might be useful as a digital currency to those wishing to purchase drugs from dodgy websites but even then those people aren’t pricing their drugs in BitCoin, there pricing them in USD / GBP / EUR with a built in conversion to and from BitCoin just to anonymise the transactions.
Since BitCoin and other crypto currencies fail the fundamental test of value, has restrictions on how they can be bought and sold (especially during periods of high volatility) and are clearly subject to internet originated pump-and-dump scams, what more “research” do I need to do? I’ve already demonstrated to myself that it has all the characteristics of a scam, so why should I consider it further than that?
It’s no different from rejecting an engineering application which violates the laws of thermodynamics. Further investigation would be a waste of time and effort.
@Bloke in Spain
People invest in crypto currencies because the hype makes it sound like a way to make easy money hence they have a fear of missing out. When this brings in enough new money to pay for people selling and the newly minted currency, demand exceeds supply and the price goes up. As there is no underlying commodity there is no way for people to determine if it is under or overvalued. The only tangible market information available is the current price.
Writing about crypto is a bit like writing about oil. The price is volatile day-to-day, so you just spout platitudes like “prices rose due to unrest in the middle-east” or “prices fell on news that China is thinking about banning crypto”. In truth nobody knows why prices changed, but that never stopped people writing before.
BiS: “Would you have turned down a hefty profit earlier in the time-line? If you cashed out now you might be be making the same as if you’d have cashed out then.
Old stock exchange saw. It is never wrong to take a profit. It’s how you get rich.”
All good points. Whatever I take my profit in is going to be some sort of gamble, though. Apart from the coffee grinder I bought. That thing is built like a tank!
John Galt: “having no intrinsic value”
Not really relevant. It has its uses. Uniquely, you can send money with no intermediaries. The gamble “investors” are making is that some such use becomes prevalent enough that the demand for cryptocurrency increases. This has nothing to do with intrinsic value, just the value of having enough cryptocurrency on hand to send it to someone should you want to.
“Old stock exchange saw. It is never wrong to take a profit. It’s how you get rich.”
______________
The problem there is the corollary: “It is always wrong to take a loss. It’s how you get poor.” No one believes that.
By taking a profit regardless of the price, you’re restricting your profits when your bets come good; and thereby not winning enough to cover your losses when your bets turn sour.
By all means get out of an investment for a profit (or a loss) when you think the new price is wrong. But it’s not correct that getting out for a profit regardless of the new price is a route to riches. Comforting at the time, yes, but not correct at the end of the year.
Hi JG,
I’m not trying to persuade anybody as to the merits of ‘crypto’ because a lot of it is indeed worthless tat (and unfortunately that’s the stuff that the media tend to be interested in because its easy to understand). I’m saying that actually being involved in a number of projects, it’s infinitely broader and more complex than the vast majority imagine. Suffice to say your world has already been changed by ‘crypto’ whether you’re aware of it or not, and its often much more about utility than intrinsic value.
Dismissing the entire crypto subject after what has really been two years of ‘retail’ acceptance because Bitcoin and their ilk have no intrinsic feels similar to Krugman’s 1998 forecast that the growth in the internet would slow, and that by 2005, its impact on the economy would be no greater than the fax machine’s.
If you want a prediction (and we may already be experiencing it), is that the first stage of crypto will go the way of the 2001 / 2002 tech bust. Most of it will go to zero, but Apple’s and Amazon’s will emerge.
But who knows, I might be another Krugman.
it might be useful as a digital currency to those wishing to purchase drugs from dodgy websites but even then those people aren’t pricing their drugs in BitCoin, there pricing them in USD / GBP / EUR with a built in conversion to and from BitCoin just to anonymise the transactions.
That is exactly what it was designed for. If it was doing that it would be a success. Fucking investor cunts!
“People invest in crypto currencies because the hype makes it sound like a way to make easy money hence they have a fear of missing out. When this brings in enough new money to pay for people selling and the newly minted currency, demand exceeds supply and the price goes up. As there is no underlying commodity there is no way for people to determine if it is under or overvalued. The only tangible market information available is the current price.
You obviously don’t understand what money is & nor do they.
Whatever I take my profit in is going to be some sort of gamble, though.
Someone who understands what speculation is. Rare. Closing a position is exactly the same gamble as opening one. If you think about the sunk cost fallacy, it’s why.
There is a common misconception that Bitcoin has no intrinsic value. It has. It is proveably scarce. This is the only necessary condition for a store of value like, Cowie shells, gold bullion and bank notes. Bitcoin has a key advantage over these because it can be transferred electronically.
@JB
Basically no although that maybe a precondition. There are plenty of things of provable scarcity that have no intrinsic value. Bank notes aren’t provably scarce. There’s always the potential that governments can print unlimited numbers of them. And have done. The value of money is that it can be confidently exchanged for goods services or assets in commerce. Bitcoin currently fails that.
BitCoin is a flawed project sucking in resources that could be more usefully employed elsewhere because of its proof of work blockchain methodology
Ethereum on the other hand seems to have real utility, especially the smart contract functionality and is shortly to move to proof of stake from proof of work which should reduce resource usage and boost security
Early days but the blockchain itself has real utility in all sorts of applications and the smart contract functions add to that
So, speculate with caution
I have a toenail in the water….!
“I have a toenail in the water….!”
So we’re on the way to another useless crypto.
I’m very, very much in favour of crypto. Two reasons. I’d like to be using it for all sorts of things. I’d like to get away from government money & their manipulation of its value to support their political careers.
But I’m not going to be able to do that if people keep “investing” in it. It’s nonsense. Money is a token of value can be exchanged for goods, services or assets. It’s value is how much of them it can be exchanged for. Until a sufficient amount of crypto is being used for that purpose it has no utility. “Investment” in it just distorts its value against those goods, services & assets & the uncertainty the speculation generates destroys the confidence in its utility.
Imagine what would happen if 99% of £’s were held by speculators gambling on its value. You could have no commerce with it because you’d have no idea of what you’d have to pay for anything. How much the money in your pocket was worth. You’d be using dollars or euros for shopping.
Bitcoin was an ingenious solution to a technical problem (the double-spending problem), but doesn’t solve any real-world problems (unless you’re a libertarian or a criminal).