I like the idea but only really see the value in Monero. Gave mining a spin and purchased a crypto just to get a feel for the reality of it and it’s ways too far from straight forward to be adopted my the masses. The resources needed to verify transaction are so inefficient (mining), the transparency is ridiculous but the idea is cool. So is contactless and Amazon’s one click pay
I’ve spent a good deal of time on Bitcoin / crypto and keep coming to a similar conclusion as DoW. The returns and vol. suggest it has a place in a diversified portfolio, but I can’t develop a sound thesis beyond that (i.e. actual use cases that existing solutions don’t already address). I’ve found many of my peers in a PM / FO role saying the same and so they tell me to just throw 1-2% and don’t look at it for awhile. I find this unsatisfactory as I could make that same argument about literally any other supposed risky asset, but this makes for a very poor thesis and I probably wouldn’t have a job for long operating that way. Further, out of all the investments across the spectrum, I can’t think of one that is nearly this controversial; meaning, I can understand the others good or bad, generally within 15-30min. I also don’t get the raw emotional attachment on the other side of the trade like I do with Bitcoin / crypto. This leads me to believe it is more faith-based / speculative than anything else.
Lastly, on your point about internet vs. crypto, I will respectfully disagree. I was young, but recall the internet enough back then to have some opinion. I remember plenty of actual use cases (e.g. watching my parents use it in the office, gaming, information gathering in the school library, etc…). Sure there were plenty of excesses as can be seen by the implosion of the dot-com era. With crypto though, I fail to find many sound use cases that aren’t gimmicky and/or can’t be solved just as easily or better with existing, non block-chain solutions.
I’d also echo DoW, say crypto does find a strong use case, why is it going to be Bitcoin?
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Why do we stick with the defaults in anything? Why does changing the opt in default result in such large differences in human behavior? Because people are cognitive misers.
The issue I have with the “first mover” rationale as to why Bitcoin will be the winner is that currency is not software. If Apple is first to create comprehensive iOS environments that make it easy to build off of that platform, then sure, we can say that people prefer Apple-based products in no small measure because switching costs are high. With Bitcoin, we are talking about making people feel confident about putting all of their wealth into something acting as a store of value. If Apple goes out of business, that stinks, but it will not end my life. I’ll buy an Android device, download new apps and rebuild my online situation. If Bitcoin fails and I’m 100% in, my life is toast.
Usually, I’ll get responses to this like, yeah but DoW, nobody is saying to put all of your money in it. To which I would reply, sure, but isn’t that what we envision those folks in Tanzania eventually doing? Either Bitcoin is credibly the total monetary solution at some point in the future, or it isn’t. Which is it?
i mean the rationale for bitcoin is that it is the best performing asset in history from its inception to now. cant think of anything else. if you invested $10,000 in bitcoin 13 years ago during its inception, youd have 7.1b right now.
Dow, like I said I’m not a crypto bull. But if you can’t make the opposite argument, probably don’t understand it very well. So I’ll try
To me, it comes down to the network effects. A crypto currency is not inherently secure or works well. The bigger it gets, the harder it is to take advantage of. This is why I believe first mover advantage is important. If I start a crypto currency today, unless I come up with a new way to do the block chain, I’m going to be susceptible to 51% attacks for a long time. There was an (economic?) paper covering how frequent these attacks are a couple years back.
And I would suspect, just a guess, that the more widespread it becomes the less volatile. Historically manias produce over valued assets along with infrastructure. Then the bubble bursts but the infrastructure remains. I wouldn’t be surprised if that’s what happens to Bitcoin as the float grows. I haven’t looked deeply into market structures, but it doesn’t even seem like there is a central price for Bitcoin yet. I think this stuff will come with time
Is it, in fact, an asset?
I can make the opposite argument, I just have no interest in it since I don’t believe in it. But the throwaway platitude of understanding the other side of the argument sounded pretty good, thank you. However, none of your response addresses why people should want to wholesale transfer their wealth into Bitcoin.
yep would definitely add to nw if i owend it.
Why wouldn’t I want to put my wealth into the best performing asset? Bitcoin is going to be the winning crypto currency while also producing billionaires. Who cares about the volatility if I’m twice as rich. I think your boomer is showing
bet you isaac newton thought the same thing before he became broke off tulips.
Now I’m 110% certain Bitcoin is in a bubble…
We transfer our wealth to plenty of volatile assets. As it becomes more main stream, it’s volatility will decrease because it’s the future. Even Buffet has 50% draw downs! Bet he laughing to the bank
wasting energy to solve math equations to make sure transactions are secure. that sounds retarded and nerdy, you know whats secure af. two step verification. just dm me everytime and ask me if i make a purchase.llol
All I care about is that my BTC position is up 150% #BTCtoTheMoon
so your 1% allcoation is now 3%!?!?!?!
It was 2%!
Lol, while y’all chickenheads have been bickering I’ve made enough to upgrade my daughter’s yacht!
Did you cash out though? Or are you still waiting for the music to stop?
Still riding it. Musical chairs has always been my favorite game!