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I used to ride on the crypto hype train. Made quite a bit of money from btc. However, it is too risky of an investment. Most people that push crypto sound like

by avgDev 8y ago

I used to ride on the crypto hype train. Made quite a bit of money from btc. However, it is too risky of an investment. Most people that push crypto sound like pyramid scheme people. At a party dude was telling everyone to invest in btc because it is the future, and it was $14k at the time. I explained that it is very risky and volatile and dude would just ignore whatever I was saying, even though I mined many cryptos, bought btc for 1 penny and had a better understanding of tech than him. 3-4 months later crypto was back to $6k and he never mentions it again with me around lol. The point is many crypto businesses screwed people over (MtGox). Many people lost fortunes from private wallets due to malware, forgetting pw. If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured. Crypto is simply too risky as a way of storing money and trading.

agumonkey 8y ago
A serious % of btc is near pure cult. So much time and energy wasted for the prospect of quicksilver it's insane.
- all_blue_chucks 8y ago
  The value of any particular coin is pure marketing. Anyone can start a coin. There is literally an infinite supply. The only thing giving them vale us popularity, and marketing is what drives popularity. Token price speculation (aka "crypto investing") is much more about marketing than it is about technology. This is why you see cult-like marketing attempts.
  - agumonkey 8y ago
    I'm not thinking of marketing attempts, more about the behavior of people. All monitoring that weird curve and doing random acts to grab bonuses nervously. Making up theories on the fly about what is going on or not. Listening to those who had luck or were there since long ago. Another aspect, gambling (because most of it [trading] is gambling) can have immense distortion power over your brain. When you have money and high frequency random noise .. you're in for a nice emotional rollercoaster.
  - georgeecollins 8y ago
    This note is legal tender for all debts public and private. Is not pure marketing.
    - all_blue_chucks 8y ago
      Fiat currency gets value from the fact that it is legally required ('by fiat') to use. There is no such requirement for tokens.
- thaumaturgy 8y ago
  Ignoring all of BTC's significant issues for a moment, there are a lot of groups in Bitcoin. One of those is the fairly average, tech-savvy want-to-be-investor, who has a little bit (but not a lot) of disposable income and wants to do something with it that's better than the 2% annual yield of ... pretty much everything else. With BTC, you could buy in at almost any amount, get out whenever you wanted, and transfer fees were pretty low. Those aren't common traits for most other investment vehicles. It's kind of a side effect of so much capital being locked up in a smaller and smaller percentage of the population. The folks closer to the bottom are clawing at anything that might improve their situation a little, even if it comes with a lot of risk.
  - waterphone 8y ago
    The S&P 500 has a ~10% annual return (7% adjusted for inflation) as a historical average. 2% is what you can get in a savings account with no risk at this point. Index funds/ETFs allow anyone to invest in the stock market starting with small amounts of money.
    - sdf43543t345 8y ago
      And bitcoin has made 100000% in 9 years. Its all a matter of timing.
      - Retric 8y ago
        Bitcoin is up quite a bit, but it's total returns are negative as every dollar out is a dollar someone else up in and mining + transfer fees is a huge expense. It's possible to win big at negative sum games, but by definition not everyone can.
      - waterphone 8y ago
        One is investing, one is speculation/gambling. Some people got very lucky. Some people lost their life savings. In the stock market with diversified investments, even if the market crashes, historically you would have always recovered and then some within not very many years so long as you didn't do the stupid thing and panic and sell during the crash in an attempt to time the market.
- ironjunkie 8y ago
  Usually that same % doesn't understand the tech AT ALL. They repeat the same koolaid about "Money not managed centrally by the government"
  - agumonkey 8y ago
    Honestly I don't know. What part of bitcoin has any meaning in relation to trading ? Some people go deep, they understand pools, fees, advanced in ASICs, advances in bot tricks .. yet it feels super random.
- arcticfox 8y ago
  It's amusing how confused come of the cultists are at the price dropping with no reason, forgetting that it went up with no apparent reason either
banachtarski 8y ago
Upvoting to offset the cargo cult downvote squad.
desireco42 8y ago
It definitely attracts 'wrong' kind of people, but that doesn't mean idea is bogus. It needs more legitimate uses.
justicezyx 8y ago
Your assessment from investment side is sound. Although I'd like to point out that bitcoin is now a rather small fraction of the whole spectrum of crypto economy. Bitcoin as a main-stream pioneer served its purpose well, and now the focus is actually to provide equal-quality infrastructure for crypto to become a meaningful candidate for future economy. That prospect certainly does not warrant the hype and money currently in the area on a case-by-case basis. But any such large-scale changes have to have a phase of rampant lock-in of wealth from general public so the society as a whole commit to support the development of the technology for some minimal amount of time. I actually no longer regret my negligence to bitcoin, which for anytime between 2009 and 2014 can help me make a fortune from complete financial freedom to a year of income, now I see the society have committed a good amount of resources; and a substantial fraction of people are aware of the concept. It's not the time for engineers to start work hard and build the actual infrastructure. That hopefully can deliver the actual value!
- guiomie 8y ago
  "Although I'd like to point out that bitcoin is now a rather small fraction of the whole spectrum of crypto economy." What? It's over 50% of total crypto market cap. And a huge chunk of the altcoins are barely liquid.
  - bdcravens 8y ago
    A bit pedantic, but Bitcoin is a hair under 50%, unless you count Bitcoin Cash with it (about 4%)
    - guiomie 8y ago
      I was looking for a chart of that actually, what is your source? My point was also, a big chunk of alts do not have a super liquid market, makes it hard to count them seriously in all aggregate market cap.
      - bdcravens 8y ago
394549 8y ago
> I used to ride on the crypto hype train. What crypto hype train? Most crypto, such as AES, RSA, Mersenne Twister and the SHA series of hashing algorithms were very carefully designed and vetted over a long period by professionals. There's not much hype there, just solid technology. That cryptocurrency thing seems to attract scam artists like moths to a flame, though. > The point is many crypto businesses screwed people over Like RSA making the backdoored Dual_EC_DRBG the default RNG in BSafe?
- bdamm 8y ago
  Time to just accept that "crypto" means cryptocurrencies and also cryptography, and interpret the context to understand which is being spoken. Here it is clearly cryptocurrencies. Moving on...
- EpicEng 8y ago
  Are you being purposely obtuse?
- pmlnr 8y ago
  You're looking for the word: cryptography. Neither cryptocurrencies nor cryptography are, by definition, the only crypto.
SippinLean 8y ago
Cool. What does that have to do with the SEC postponing its decision on whether to approve VanEck's ETF backed by Bitcoin, specifically?
- bdcravens 8y ago
  That some of the recent gains are part of that same hype train, and the slump in light of recent ETF denials/delays is part of the same usual cycle.
  - SippinLean 8y ago
    > specifically
- dudus 8y ago
  Bitcoin was already at 7500 much lower than its peak days before the decision
  - SippinLean 8y ago
    I'm aware. What makes the parent comment particularly relevant to VanEck's ETF vs all other threads about Bitcoin?
    - bdcravens 8y ago
      It's relevant to both. Put another way, there's nothing special about the VanEck ETF; it's just another (and there will be many more) piece of news in Bitcoin that drives up, then drives down, the price. To your bigger, implicit point, that the comment doesn't belong because it's not completely relevant, if we assume that's the case, that's the nature of a forum. How many Apple conversations dare to have comments about how the MBP isn't for developers, etc, regardless of the original point?
      - SippinLean 8y ago
        You're comparing the parent comment to other irrelevant comments elsewhere, in implicit agreement with me. This article is about a specific ETF. How many people upvoting the parent comment understand that, say, the Winklevoss ETF was set to 0.01 BTC per share, whereas VanEck set each share at 25 BTC (which is something special); let alone the implications of such a difference? I think it's been established on HN that Bitcoin = bad, we don't need to regurgitate the point on every thread about it. I come here for nuanced discussion, if I wanted black and white thinking I'd be reading plebbit.
whb07 8y ago
When there’s volatility there’s “alpha” to be had. If it was a flat lined chart, then no one would gain or lose which means 0% yield for an investment (my math could be wrong /s ). The question is if you’re sophisticated or lucky enough to ride the variance on an upward direction.
- EpicEng 8y ago
  Which is why it's not a practical currency. If it's a speculative investment I have many other options.
redm 8y ago
"If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured." Just out of curiosity, what makes you think that insured transactions to verified parties will not occur at some point? Credit cards have evolved substantially from the days of paper imprints themselves.
- EpicEng 8y ago
  What about the state of crypto right now leads you to believe they will _ever_ be a common form of currency?
mrb 8y ago
«If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured. Crypto is simply too risky as a way of storing money and trading.» As always, the reality is not as black and white as you present it. Credit cards and fiat money certainly have advantages but they also have many drawbacks. Just to name a few: credit card fraud eats into merchants' profits, international money transfers are slow and crippled with high fees, bank accounts or cash can be frozen or seized by authoritarian governments, hyperinflation destroys savings, etc. There are use cases where crypto adequately solves some of these problems that neither credit cards nor fiat money can solve. And, yes, crypto comes with a different set of drawbacks but that doesn't mean crypto is "too risky" for anyone to do anything with it.
Jdam 8y ago
> If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured. Crypto is simply too risky as a way of storing money and trading. People actually realize that an anonymous, autonomous & decentralized system is not always desirable.
gammateam 8y ago
> Crypto is simply too risky as a way of storing money and trading. And when its not risky the price will be higher because so many other people will be storing and trading it safely. Thats the real bet. If it fits your risk profile then you have it, and probably have had it since 2012 because the fundamentals were the same then as they are now. If you weathered the risk back then you'll weather it now where its a lot less risk. And if today's lack of risk still doesn't fit your risk profile, then you have to wait. Simple.
notyourday 8y ago
> I used to ride on the crypto hype train. Made quite a bit of money from btc. However, it is too risky of an investment. Most people that push crypto sound like pyramid scheme people. Yes, and it includes those that peddle professional services i.e. lawyers and accountants. Those are the people who add the veneer of legitimacy to this pyramid scheme. These are the people that need to get their hands slapped. The really funny part is that the same firms would never touch penny stocks, pink sheets or sellers of unregistered securities because that's "dirty". Cryptocoins on the other hand, absolutely! They are all over it.
bitanarch 8y ago
I've been a crypto investor started in 2013. I narrowly avoided MtGox by withdrawing my Bitcoins from it right when the rumors about withdrawal issues started. If you have the efficient frontier model in mind, then you should know you shouldn't put too much money into it because the volatility of it is insane. My small early bets in Bitcoin and Ethereum worked out because the volatility turned out to work in my favor. But if they did go to zero it wouldn't have mattered much anyway. There're still other non-crypto stuff (e.g. tech stocks, ETFs) I invest into. There're known ways to make risky investments work in a portfolio in the finance world - or else VCs wouldn't exist, coz nobody would give money to a VC to begin with. It's also a fact that most in the general public don't know about it. As a result, many public investors would see a Bitcoin as the same as a share in Google or Facebook - something to put money in. While in fact the attitude you take for each of these should be very different. This would actually quickly lead to questions like how to protect public investors. Sure when Bitcoin drops or a startup fails everyone would be angry and people's instinct is to ban it, or at least make it available only to sophisticated investors. But then when things go well people would complain that only the VCs and hedge funds have access to the best investment options. I think the solution to this all is really investor education (modern portfolio theory isn't super complicated math) and better transparency. The latter can be done with better regulations of exchanges and ICO issuers. But the former has a long way to go.
dagoat 8y ago
I completely agree with you, but that guy could now point out that BTC did go beyond 14k and it may do in the future. Making him "right". That being said, I've encountered what you describe as well and it's mildly disturbing

by avgDev 8y ago

agumonkey 8y ago

A serious % of btc is near pure cult. So much time and energy wasted for the prospect of quicksilver it's insane.

all_blue_chucks 8y ago
The value of any particular coin is pure marketing. Anyone can start a coin. There is literally an infinite supply. The only thing giving them vale us popularity, and marketing is what drives popularity. Token price speculation (aka "crypto investing") is much more about marketing than it is about technology. This is why you see cult-like marketing attempts.
- agumonkey 8y ago
  I'm not thinking of marketing attempts, more about the behavior of people. All monitoring that weird curve and doing random acts to grab bonuses nervously. Making up theories on the fly about what is going on or not. Listening to those who had luck or were there since long ago. Another aspect, gambling (because most of it [trading] is gambling) can have immense distortion power over your brain. When you have money and high frequency random noise .. you're in for a nice emotional rollercoaster.
- georgeecollins 8y ago
  This note is legal tender for all debts public and private. Is not pure marketing.
  - all_blue_chucks 8y ago
    Fiat currency gets value from the fact that it is legally required ('by fiat') to use. There is no such requirement for tokens.
thaumaturgy 8y ago
Ignoring all of BTC's significant issues for a moment, there are a lot of groups in Bitcoin. One of those is the fairly average, tech-savvy want-to-be-investor, who has a little bit (but not a lot) of disposable income and wants to do something with it that's better than the 2% annual yield of ... pretty much everything else. With BTC, you could buy in at almost any amount, get out whenever you wanted, and transfer fees were pretty low. Those aren't common traits for most other investment vehicles. It's kind of a side effect of so much capital being locked up in a smaller and smaller percentage of the population. The folks closer to the bottom are clawing at anything that might improve their situation a little, even if it comes with a lot of risk.
- waterphone 8y ago
  The S&P 500 has a ~10% annual return (7% adjusted for inflation) as a historical average. 2% is what you can get in a savings account with no risk at this point. Index funds/ETFs allow anyone to invest in the stock market starting with small amounts of money.
  - sdf43543t345 8y ago
    And bitcoin has made 100000% in 9 years. Its all a matter of timing.
    - Retric 8y ago
      Bitcoin is up quite a bit, but it's total returns are negative as every dollar out is a dollar someone else up in and mining + transfer fees is a huge expense. It's possible to win big at negative sum games, but by definition not everyone can.
    - waterphone 8y ago
      One is investing, one is speculation/gambling. Some people got very lucky. Some people lost their life savings. In the stock market with diversified investments, even if the market crashes, historically you would have always recovered and then some within not very many years so long as you didn't do the stupid thing and panic and sell during the crash in an attempt to time the market.
ironjunkie 8y ago
Usually that same % doesn't understand the tech AT ALL. They repeat the same koolaid about "Money not managed centrally by the government"
- agumonkey 8y ago
  Honestly I don't know. What part of bitcoin has any meaning in relation to trading ? Some people go deep, they understand pools, fees, advanced in ASICs, advances in bot tricks .. yet it feels super random.
arcticfox 8y ago
It's amusing how confused come of the cultists are at the price dropping with no reason, forgetting that it went up with no apparent reason either

banachtarski 8y ago

Upvoting to offset the cargo cult downvote squad.

desireco42 8y ago

It definitely attracts 'wrong' kind of people, but that doesn't mean idea is bogus. It needs more legitimate uses.

justicezyx 8y ago

Your assessment from investment side is sound. Although I'd like to point out that bitcoin is now a rather small fraction of the whole spectrum of crypto economy. Bitcoin as a main-stream pioneer served its purpose well, and now the focus is actually to provide equal-quality infrastructure for crypto to become a meaningful candidate for future economy. That prospect certainly does not warrant the hype and money currently in the area on a case-by-case basis. But any such large-scale changes have to have a phase of rampant lock-in of wealth from general public so the society as a whole commit to support the development of the technology for some minimal amount of time. I actually no longer regret my negligence to bitcoin, which for anytime between 2009 and 2014 can help me make a fortune from complete financial freedom to a year of income, now I see the society have committed a good amount of resources; and a substantial fraction of people are aware of the concept. It's not the time for engineers to start work hard and build the actual infrastructure. That hopefully can deliver the actual value!

guiomie 8y ago
"Although I'd like to point out that bitcoin is now a rather small fraction of the whole spectrum of crypto economy." What? It's over 50% of total crypto market cap. And a huge chunk of the altcoins are barely liquid.
- bdcravens 8y ago
  A bit pedantic, but Bitcoin is a hair under 50%, unless you count Bitcoin Cash with it (about 4%)
  - guiomie 8y ago
    I was looking for a chart of that actually, what is your source? My point was also, a big chunk of alts do not have a super liquid market, makes it hard to count them seriously in all aggregate market cap.
    - bdcravens 8y ago

394549 8y ago

> I used to ride on the crypto hype train. What crypto hype train? Most crypto, such as AES, RSA, Mersenne Twister and the SHA series of hashing algorithms were very carefully designed and vetted over a long period by professionals. There's not much hype there, just solid technology. That cryptocurrency thing seems to attract scam artists like moths to a flame, though. > The point is many crypto businesses screwed people over Like RSA making the backdoored Dual_EC_DRBG the default RNG in BSafe?

bdamm 8y ago
Time to just accept that "crypto" means cryptocurrencies and also cryptography, and interpret the context to understand which is being spoken. Here it is clearly cryptocurrencies. Moving on...
EpicEng 8y ago
Are you being purposely obtuse?
pmlnr 8y ago
You're looking for the word: cryptography. Neither cryptocurrencies nor cryptography are, by definition, the only crypto.

SippinLean 8y ago

Cool. What does that have to do with the SEC postponing its decision on whether to approve VanEck's ETF backed by Bitcoin, specifically?

bdcravens 8y ago
That some of the recent gains are part of that same hype train, and the slump in light of recent ETF denials/delays is part of the same usual cycle.
- SippinLean 8y ago
  > specifically
dudus 8y ago
Bitcoin was already at 7500 much lower than its peak days before the decision
- SippinLean 8y ago
  I'm aware. What makes the parent comment particularly relevant to VanEck's ETF vs all other threads about Bitcoin?
  - bdcravens 8y ago
    It's relevant to both. Put another way, there's nothing special about the VanEck ETF; it's just another (and there will be many more) piece of news in Bitcoin that drives up, then drives down, the price. To your bigger, implicit point, that the comment doesn't belong because it's not completely relevant, if we assume that's the case, that's the nature of a forum. How many Apple conversations dare to have comments about how the MBP isn't for developers, etc, regardless of the original point?
    - SippinLean 8y ago
      You're comparing the parent comment to other irrelevant comments elsewhere, in implicit agreement with me. This article is about a specific ETF. How many people upvoting the parent comment understand that, say, the Winklevoss ETF was set to 0.01 BTC per share, whereas VanEck set each share at 25 BTC (which is something special); let alone the implications of such a difference? I think it's been established on HN that Bitcoin = bad, we don't need to regurgitate the point on every thread about it. I come here for nuanced discussion, if I wanted black and white thinking I'd be reading plebbit.

whb07 8y ago

When there’s volatility there’s “alpha” to be had. If it was a flat lined chart, then no one would gain or lose which means 0% yield for an investment (my math could be wrong /s ). The question is if you’re sophisticated or lucky enough to ride the variance on an upward direction.

EpicEng 8y ago
Which is why it's not a practical currency. If it's a speculative investment I have many other options.

redm 8y ago

"If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured." Just out of curiosity, what makes you think that insured transactions to verified parties will not occur at some point? Credit cards have evolved substantially from the days of paper imprints themselves.

EpicEng 8y ago
What about the state of crypto right now leads you to believe they will _ever_ be a common form of currency?

mrb 8y ago

«If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured. Crypto is simply too risky as a way of storing money and trading.» As always, the reality is not as black and white as you present it. Credit cards and fiat money certainly have advantages but they also have many drawbacks. Just to name a few: credit card fraud eats into merchants' profits, international money transfers are slow and crippled with high fees, bank accounts or cash can be frozen or seized by authoritarian governments, hyperinflation destroys savings, etc. There are use cases where crypto adequately solves some of these problems that neither credit cards nor fiat money can solve. And, yes, crypto comes with a different set of drawbacks but that doesn't mean crypto is "too risky" for anyone to do anything with it.

Jdam 8y ago

> If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured. Crypto is simply too risky as a way of storing money and trading. People actually realize that an anonymous, autonomous & decentralized system is not always desirable.

gammateam 8y ago

> Crypto is simply too risky as a way of storing money and trading. And when its not risky the price will be higher because so many other people will be storing and trading it safely. Thats the real bet. If it fits your risk profile then you have it, and probably have had it since 2012 because the fundamentals were the same then as they are now. If you weathered the risk back then you'll weather it now where its a lot less risk. And if today's lack of risk still doesn't fit your risk profile, then you have to wait. Simple.

notyourday 8y ago

> I used to ride on the crypto hype train. Made quite a bit of money from btc. However, it is too risky of an investment. Most people that push crypto sound like pyramid scheme people. Yes, and it includes those that peddle professional services i.e. lawyers and accountants. Those are the people who add the veneer of legitimacy to this pyramid scheme. These are the people that need to get their hands slapped. The really funny part is that the same firms would never touch penny stocks, pink sheets or sellers of unregistered securities because that's "dirty". Cryptocoins on the other hand, absolutely! They are all over it.

bitanarch 8y ago

I've been a crypto investor started in 2013. I narrowly avoided MtGox by withdrawing my Bitcoins from it right when the rumors about withdrawal issues started. If you have the efficient frontier model in mind, then you should know you shouldn't put too much money into it because the volatility of it is insane. My small early bets in Bitcoin and Ethereum worked out because the volatility turned out to work in my favor. But if they did go to zero it wouldn't have mattered much anyway. There're still other non-crypto stuff (e.g. tech stocks, ETFs) I invest into. There're known ways to make risky investments work in a portfolio in the finance world - or else VCs wouldn't exist, coz nobody would give money to a VC to begin with. It's also a fact that most in the general public don't know about it. As a result, many public investors would see a Bitcoin as the same as a share in Google or Facebook - something to put money in. While in fact the attitude you take for each of these should be very different. This would actually quickly lead to questions like how to protect public investors. Sure when Bitcoin drops or a startup fails everyone would be angry and people's instinct is to ban it, or at least make it available only to sophisticated investors. But then when things go well people would complain that only the VCs and hedge funds have access to the best investment options. I think the solution to this all is really investor education (modern portfolio theory isn't super complicated math) and better transparency. The latter can be done with better regulations of exchanges and ICO issuers. But the former has a long way to go.

dagoat 8y ago

I completely agree with you, but that guy could now point out that BTC did go beyond 14k and it may do in the future. Making him "right". That being said, I've encountered what you describe as well and it's mildly disturbing