Crypto Currency Mining a Giant Pyramid Scheme?

[MrM1]

Yeah I am sure it will stay underground, but that won't stop the Deep State from trying to ban them. I think CBDCs will be more about control than convenience.

Mean while ... Silver Eagles are on Sale this weekend ?

 

[Sanwizard]

Gold and Silver manipulation (especially silver) drives me crazy. One of the ways silver is manipulated IS the ETFs and "Paper" Silver. I wonder if this same manipulation will happen to crypto "Once the SEC approves (those) ETfs" ?? I'm guessing yes.

But at any rate, will anything crypto matter when and if nations and bank begin to Issue there own CBDC's? Will those nations try to ban crypto in favor of their much more controllable State issued CBDCs? I think so. Will it happen tomorrow, or over night? Probably not. Di-spite the fear mongering and FOMO crowd, I think here in the USA CBDCs are still a good while off. Too much state resistance.

Its going to be interesting. My guess is if the buddies of the globalists are making money on crypto, they may "allow" it to continue, otherwise a total ban in favor of CBDC. They cannot stop crypto, since its everywhere, but they can make it very hard to transact. Peer to peer would facilitate transactions between entities, but banks may ban it, so turning it into a fiat may not be feasible in the future.
The good news is China banned it already, but they could not stop it. I will assume the Swiss will always stay neutral.

If blockchain becomes just a few percent of the global market, that prices bitcoin at around million per coin. If you dollar cost average a portion of your income, i think you will at least beat inflation, and the upside is you may do quite well.
BUT, if the power goes out globally, then all bets are off, and gold/silver is the ticket.
Always diversify. Real estate, precious metals, crypto, and food/ammo are my bets.

 

[MrM1]

BUT, if the power goes out globally, then all bets are off, and gold/silver is the ticket.
Always diversify. Real estate, precious metals, crypto, and food/ammo are my bets.

That Right there is the Key

 

[MrM1]

Well, I guess a BRICS currency is not happening any time soon. India has dismissed the idea, choosing rather to strengthen the Rupee. The dollar will stay the undisputed world currency for the unforeseeable future (well short of the US imploding internally and sliding into hyperinflation). So there is that.

 

[MrM1]

(Goes to YouTube for the real story)

 

[srebenscki]

Haha, I can see why some might think of cryptocurrency mining that way!

But on a serious note, it's fascinating to see the dynamics of global currencies and how things play out. As for the idea of a mpc wallet, I wonder if that's a solution for those who want to keep their crypto securely stored amid these currency musings?

Thanks for sharing this thought-provoking perspective!

 

[Sanwizard]

(Goes to YouTube for the real story)

Funny. But how does that account for the over 1000% profits I made so far?

And the waterfront house I live in mortgage free paid for by Ethereum?

Bitcoin is up 63% this year. The Dow is down 2%. Your choice.

 

[robby]

Funny. But how does that account for the over 1000% profits I made so far?

And the waterfront house I live in mortgage free paid for by Ethereum?

Bitcoin is up 63% this year. The Dow is down 2%. Your choice.

LOL I guess it's always good to look at the Bright side and ignore the huge overall loss.

 

[Lt.Dan]

LOL I guess it's always good to look at the Bright side and ignore the huge overall loss.

View attachment 174569

There are a lot of people still making money all the way to the bottom of that. It doesn't mean much.

 

[MrM1]

Funny. But how does that account for the over 1000% profits I made so far?

And the waterfront house I live in mortgage free paid for by Ethereum?

Bitcoin is up 63% this year. The Dow is down 2%. Your choice.

It doesn't account for anything ... It's just funny

 

[Sanwizard]

LOL I guess it's always good to look at the Bright side and ignore the huge overall loss.

View attachment 174569

Nah, I am still up over 1000% on Bitcoin. I bought at $10, then more at $300, then more at $3000. I also bought some at $24,000, so up over $10,000 even on those.
I also dumped my entire 401K into Grayscale Bitcoin Trust in 2017. It split 100:1 right after I bought.

We are still in wild west mode in Crypto, but I have found it to be a great inflation hedge if you have the balls. That said, I converted my Ethereum into real estate,
(current home) and also used Bitcoin to stock up on Gold and Silver via JM Bullion.

If you look at the trends on Bitcoin, it always goes way down before it goes up again. You need patience. There are a lot of HODL (hold on for dear life) folks in the market, since trading is not for the faint of heart.

Unless your in short term bonds or a savings account like Marcus right now, there are very few places to invest that provide a better return prospective over Bitcoin. All the other coins are garbage in my opinion. Bitcoin is gold, and Ethereum is silver. The rest are mostly pyramid scams. Cardano is interesting too due to speed and capacity.

Down the road, all transactions will be on a blockchain. The protocol used for credit cards will transition. Contracts will also transition. Middle men and banks are screwed when that happens. I have a very large hedge fund client that is getting into crypto big time. Fidelity clients are clamoring for a way to invest in their 401k's.

I used to babysit the US federal money transfer system, which moves trillions every day. That entire system, especially bank to bank, is moving to blockchain.
The BRICS also see the blockchain as a way to get away from the dollar based SWIFT and CHIPS systems.

The world is changing fast, and there is no harm in making a bet on crypto with a few percent of a portfolio. You may be surprised and happy in the end, or you could lose it. Like I said, you need balls and patience to play.

 

[Hedges]

"A few percent" and "entire 401k" are not the same for most people.

How do you account for some people winning $100 million or so in the lottery?
Both it and crypto are just a transfer of wealth between people.
Unless crypto produces net value by greasing the skids of financial transactions. e.g. throwing the money changers out of the temple, providing secure payment for less than the 2% or 3% Visa/MC charge.

Years ago, I decided my preferred form of gambling was to buy at auctions. Admittedly, not liquid.

 

[Sanwizard]

"A few percent" and "entire 401k" are not the same for most people.

How do you account for some people winning $100 million or so in the lottery?
Both it and crypto are just a transfer of wealth between people.
Unless crypto produces net value by greasing the skids of financial transactions. e.g. throwing the money changers out of the temple, providing secure payment for less than the 2% or 3% Visa/MC charge.

Years ago, I decided my preferred form of gambling was to buy at auctions. Admittedly, not liquid.

True. I like to go big or go home, but thats me. It has worked out fairly well so far.
I few percent of a portfolio will enable a purchase of some crypto as an inflation hedge.

Paper money is going away soon, and although I still have exposure, Its nice to have an alternate paper currency. I actually like swiss francs, but the fees, like premiums on metals, are outrageous.

Blockchain removes the middle man, so yes, it makes financial transactions more secure, transparent, simpler, faster, and cheaper. Its comparable in technical terms to the cellphone, which is your window into the internet, and has replaced cameras, PC's, mail, etc. We are still in the very early period of adoption though.

Buying at auctions is also a great hedge, as I think barter of goods may be in our near future. Thats why I also build my own rifles, reload ammo, stock up on freeze dried food, and have multiple ways to assure plenty of clean water. Any Hamas types entering my compound will be saying hello to Allah the same day.

 

[aenyc]

Hamas is not going to be showing at your door. Its going to be your smart phone not allowing you to make a payment 5 miles away from your designated tax cage.

 

[Hedges]

I had Flextronics stock, came from a startup they purchased. It was dead for a while, then Dot-Com took off and they made the hardware that ran the internet. Price doubled repeatedly and I saw zeros being tacked onto my fortune. I was rich (on paper, not vested). Then the bottom fell out in 2000. (dead cat?) bounce. And fell out harder in 2009. Has recovered to 50% of the peak 23 years later (dollar down 75%, so today I'm 1/8th as rich as I thought I was back then.)

I heard tale from a manager about someone who had start-up stock worth $1 million. Share price was $24.50, and he planned to sell when it hit $25. It never did, went to zero. I took that lesson to heart and did harvest a fraction of the stock's value along the way. No way near what selling at the peak (or buying a collar) would have done.

Another tale was a guy who invited coworkers to see is $250k convertable. It looked quite mundane. He explained that the stock he sold to buy it had since risen to $250k.

So pare a bit on the way up, not win as big but not lose as big either.

(For CEOs with stock options, the math is different. Take big risks, double or nothing. If the company stock doubles, they get rich. If it crashes, they have lost nothing. Their motivation does not align with shareholders'.)

Good that you got a house out of it. So did I. If our respective positions go to zero, we've still come out ahead.

 

[Sanwizard]

I had Flextronics stock, came from a startup they purchased. It was dead for a while, then Dot-Com took off and they made the hardware that ran the internet. Price doubled repeatedly and I saw zeros being tacked onto my fortune. I was rich (on paper, not vested). Then the bottom fell out in 2000. (dead cat?) bounce. And fell out harder in 2009. Has recovered to 50% of the peak 23 years later (dollar down 75%, so today I'm 1/8th as rich as I thought I was back then.)

I heard tale from a manager about someone who had start-up stock worth $1 million. Share price was $24.50, and he planned to sell when it hit $25. It never did, went to zero. I took that lesson to heart and did harvest a fraction of the stock's value along the way. No way near what selling at the peak (or buying a collar) would have done.

Another tale was a guy who invited coworkers to see is $250k convertable. It looked quite mundane. He explained that the stock he sold to buy it had since risen to $250k.

So pare a bit on the way up, not win as big but not lose as big either.

(For CEOs with stock options, the math is different. Take big risks, double or nothing. If the company stock doubles, they get rich. If it crashes, they have lost nothing. Their motivation does not align with shareholders'.)

Good that you got a house out of it. So did I. If our respective positions go to zero, we've still come out ahead.

I worked at Sun Microsystems at the height of the dot com boom bust cycle. They gave me a boatload of shares (grants, not regular, but vested over 3 years) to get me on board. The share price hit $100 per share at that time. I was on easy street! All I had to do was hang on for three years, and things would be awesome.

After 1 year, the crash came. The stock went down to penny stock status. I left the company and moved to a new tech firm uptown NYC. I ended up with a couple grand after I cashed out vs the million plus I had on paper. Oh well, easy come, easy go. The one benefit was my Sun office was in the world trade center, so I was uptown instead of in that office on 9/11. Probably saved my life.

 

[aenyc]

I worked at Sun Microsystems at the height of the dot com boom bust cycle. They gave me a boatload of shares (grants, not regular, but vested over 3 years) to get me on board. The share price hit $100 per share at that time. I was on easy street! All I had to do was hang on for three years, and things would be awesome.

After 1 year, the crash came. The stock went down to penny stock status. I left the company and moved to a new tech firm uptown NYC. I ended up with a couple grand after I cashed out vs the million plus I had on paper. Oh well, easy come, easy go. The one benefit was my Sun office was in the world trade center, so I was uptown instead of in that office on 9/11. Probably saved my life.

I refused a job offer from a company on one of the high floors in tower 1 in july 2001.
I know a few people who were employed by IT (Sun, Cisco, Microsoft) before the dot-com bust. Those who were smart sold before the crash and are millionaires to this day. But a much larger percentage ended up with nothing and chased the market all the way down.

 

[robby]

Crypto currency is a lot like a Money based Religion. Your told to hold onto it and have faith that this invisible asset will always keep on going up in value. Even when times get rough just hold on and you will be rewarded for your faith.

I may not have gotten as wealthy as I could have, had I just kept shoving my money into risky stocks or Crypto, but on the flip side I have never crashed and burned like so many of my Coworkers.
I plotted a safe course that allowed me to gather enough money and Real Estate to pretty much ensure that I will (hopefully) always be financially okay.

I remember back in about 2005 a Coworker found out during a vacation about some South American based Investment scheme that guaranteed an annual 50% return on your investment and that it was backed by the Brazilian Government.
He admitted to me while trying to persuade me to join him that he was not stupid and figured it must be a Ponzi scheme but since he was getting in early he figured he could get out before it crashed.

First he put in $100K and then a year later when he saw that he had a $150K that could be drawn out he decided like any good Gambler to add in another $50K. The second year he had $300K available and was the happiest man at work. As he prattled on about his gains I felt kind of stupid for not joining him but that changed almost instantly when I asked him when he was going to pull his money out. His exact words were "Not Now, I am putting another $50K in and will pull out when I have over Half a Million dollars!
I quickly reminded him that he said it was probably a Ponzi Scheme. He proceeded to preach to me that he was wrong back then and that he now realized that this was a straight up company as he had flown over and seen their projects, met with company execs and knew that it was building resort houses and had built and sold dozens of them and that they had were starting a new phase to build 100 more.

Well as you probably guessed, within 6 months the guy was avoiding me like the plague and I only heard from another employee that he had lost it all and had also caused some other undisclosed employees at the company to also lose their money. I did hear later on after he quit the Job that one or two people had pulled out their money and gotten out just after the second year.
The funny thing was that his initial investment plan was correct, but the Gambling Gene just got the better of him.

 

[Sanwizard]

Crypto currency is a lot like a Money based Religion. Your told to hold onto it and have faith that this invisible asset will always keep on going up in value. Even when times get rough just hold on and you will be rewarded for your faith.

I may not have gotten as wealthy as I could have had I just kept shoving my money into risky stocks or Crypto, but on the flip side I have never crashed and burned like so many of my Coworkers.
I plotted a safe course that allowed me to gather enough money and Real Estate to pretty much ensure that I will (hopefully) always be financially okay.

I remember back in about 2005 a Coworker found out during a vacation about some South American based Investment scheme that guaranteed an annual 50% return on your investment and that it was backed by the Brazilian Government.
He admitted to me while trying to persuade me to join him that he was not stupid and figured it must be a Ponzi scheme but since he was getting in early he figured he could get out before it crashed.

First he put in $100K and then a year later when he saw that he had a $150K that could be drawn out he decided like any good Gambler to add in another $50K. The second year he had $300K available and was the happiest man at work. As he prattled on about his gains I felt kind of stupid for not joining him but that changed almost instantly when I asked him when he was going to pull his money out. His exact words were "Not Now, I am putting another $50K in and will pull out when I have over Half a Million dollars!
I quickly reminded him that he said it was probably a Ponzi Scheme. He proceeded to preach to me that he was wrong back then and that he now realized that this was a straight up company as he had flown over and seen their projects, met with company execs and knew that it was building resort houses and had built and sold dozens of them and that they had were starting a new phase to build 100 more.

Well as you probably guessed, within 6 months the guy was avoiding me like the plague and I only heard from another employee that he had lost it all and had also caused some other undisclosed employees at the company to also lose their money. I did hear later on after he quit the Job that one or two people had pulled out their money and gotten out just after the second year.
The funny thing was that his initial idea was correct, but the Gambling Gene just got the better of him.

Any investment that guarantees a return way above the nominal going rate is always a risky bet, and most likely a scam.
Crypto does not guarantee anything, and yeah, if I had cashed out at 60K I would have been in great shape, but I dont like trying to time a market. Dollar cost averaging seems to work well.

My only fear is government intervention by those who want a CBDC, which seems likely under a leftist administration. But I still hold out hope that the next administration will be in favor of a free market.

At this point, I am no longer buying, as I have enough to meet a percentage of my portfolio. Since I got in early, I have been positive even in the sharp downturns.
It sure is fun though when it goes up like last week, and I can watch the paper gains of tens of thousands in one day, while I relax on the couch.
I dont have any other investments that can do that.

 

[robby]

My only fear is government intervention by those who want a CBDC, which seems likely under a leftist administration. But I still hold out hope that the next administration will be in favor of a free market.

It's a pretty safe bet that almost any Country is going to Regulate and Tax an Investment at some point in time.
So it's not a question of "If" but "When".
After all even the Dead are taxed in most Western Countries