cryptocurrencies and mining

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hamor
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cryptocurrencies and mining

Post by hamor » 04 Aug 2017 15:02

Hi all,

I hope this is the right sub-forum for this.

Do you have an opinion on the subject? Please share.

I've been curious about bitcoint for a while, but I don't know enough about it to form an opinion.

Just recently I discovered that computer video cards went up in price over the last 6 months or so.
Some digging quickly unearthed the reason - the mining craze. Every Tom, Dick and Harry is mining, some on their CPUs, but mostly on GPUs (videocards).

What is the future of casual mining, what is the future of crypto currencies, should we consider investing in them..?

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Re: cryptocurrencies and mining

Post by fireseeker » 04 Aug 2017 18:03

Hi hamor,
This was recently posted in the Howard Marks thread -- it's a link to his latest investing memo, and it has some great insight on cryptocurrencies (in short: stay away).
-fireseeker

https://www.oaktreecapital.com/insights ... arks-memos

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kcowan
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Re: cryptocurrencies and mining

Post by kcowan » 04 Aug 2017 19:23

What is the difference between bitcoin and tulip bulbs? The bulbs can produce a lovely flower every year.

Why does the price of bitcoin increase? No idea!
For the fun of it...Keith

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Re: cryptocurrencies and mining

Post by longinvest » 04 Aug 2017 20:31

kcowan wrote:
04 Aug 2017 19:23
Why does the price of bitcoin increase?
Higher demand or lower supply (or both). :wink:
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Re: cryptocurrencies and mining

Post by DenisD » 04 Aug 2017 21:02

longinvest wrote:
04 Aug 2017 20:31
kcowan wrote:
04 Aug 2017 19:23
Why does the price of bitcoin increase?
Higher demand or lower supply (or both). :wink:
IIRC, as the number of bitcoins increases, it takes more computing power to mine new ones. IE, the cost goes up. But I don't know much about it.

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Re: cryptocurrencies and mining

Post by longinvest » 04 Aug 2017 21:06

DenisD wrote:
04 Aug 2017 21:02
IIRC, as the number of bitcoins increases, it takes more computing power to mine new ones. IE, the cost goes up. But I don't know much about it.
I probably know even less than you do. I was just stating an economic truism. :wink:
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Re: cryptocurrencies and mining

Post by max88 » 04 Aug 2017 23:08

All currencies have something in common.
Cost of upkeep
- Gold: somewhere safe to hide and lock.
- Fiat: monetary press.
- Crypto: electricity.

Ever increasing supply
- Gold: non-stop digging.
- Fiat: keep printing.
- Crypto: bits and bytes.
I am cautiously optimistic. When it goes up, I claim I have been optimistic; when it goes down, I claim I have been cautious.

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ghariton
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Re: cryptocurrencies and mining

Post by ghariton » 04 Aug 2017 23:10

I have enough problems getting my head around fiat currencies issued by governments/central banks. Cryptocurrencies are too much of a stretch for me.

George
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hamor
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Re: cryptocurrencies and mining

Post by hamor » 05 Aug 2017 09:01

Thanks everyone for your insight and fireseeker for the link, I don't know who the author is but his writings sound like usual mumbo-jumbo.

To be clear - I have no intention to buy any digital coin, my kid might mine some with his existing computer, even if it goes to zero, the only loss will be used electricity and he might learn something in the process both about computers and investments.

I started reading a book on block chain (the underlying tech), but put it aside. This thing might have a future, but nothing prevents the large corporations (banks etc) to develop their own currency and exchanges, meaning they don't have to buy bitcoin or etherium.... Smart banks are already looking into it (not the one I am working at, unless they keep it a secret :) )

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Re: cryptocurrencies and mining

Post by gobsmack » 05 Aug 2017 11:38

hamor wrote:
05 Aug 2017 09:01
To be clear - I have no intention to buy any digital coin, my kid might mine some with his existing computer, even if it goes to zero, the only loss will be used electricity and he might learn something in the process both about computers and investments.
Blockchain is an amazing technology that offers a solution for a very complicated technical problem. If your son is the techie type, there is definitely value in encouraging him to learn more about this technology. Mining is not the best way to do that though. He will simply download a miner and let it run on his machine without necessarily understanding what is happening under the hood. There are ways of setting up your own private test blockchain in order to play with it and understand how it works. I think that would be a better route. For some great introductory articles to the technology behind bitcoin, check out these great articles (specially the first few articles). They are bitcoin specific but the same general ideas apply to any cryptocurrency.

... and yes, I don't recommend investing or trading in these currencies.

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Re: cryptocurrencies and mining

Post by doom_diver » 11 Oct 2017 12:24

I own quite abit of Crypto, I've found lately that it has been stuck at certain prices. I feel though that Bitcoin will hit $5000.00 at some point in next year around the April mark.

Thing is, if you invested in a typical bank stock, you would've on an average year made more money. If you trade daytrade crypto there is plenty of money to be made but not as much as typical stocks.

I have my portfolio invested 10% into Crypto instead of keeping gold, which at this point I believe gold to soon become further redundant.

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Re: cryptocurrencies and mining

Post by thundarr » 16 Oct 2017 07:06

doom_diver wrote:
11 Oct 2017 12:24
I own quite abit of Crypto, I've found lately that it has been stuck at certain prices. I feel though that Bitcoin will hit $5000.00 at some point in next year around the April mark.

Thing is, if you invested in a typical bank stock, you would've on an average year made more money. If you trade daytrade crypto there is plenty of money to be made but not as much as typical stocks.

I have my portfolio invested 10% into Crypto instead of keeping gold, which at this point I believe gold to soon become further redundant.
Congratz for it cracking $5,000 and looks like it could very much hit $6,000 this week! It's funny that you posted this under a week ago hoping it would hit $5,000 in 2018. THat being said, it's crazy how it has no peak! I still owe no crypto because i feel this is very much like the internet bubble of 2,000 where crazy spikes were happening.

If i may ask, how much are you up since you got started? I applaud you!

hamor
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Re: cryptocurrencies and mining

Post by hamor » 16 Oct 2017 16:02

Gee... what did I start...? Go back to RFD, fellas, please, pretty please :roll:

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Re: cryptocurrencies and mining

Post by thundarr » 16 Oct 2017 19:15

lol..relax @hamor we're all here sharing our "opinion on the subject"

In terms of mining because of the vary nature of how bitcoin and other Proof of Work (PoW) cryptocurrencies work, the days of casual mining is coming to an end. It's becoming exponentially more difficult for casual pc's (even with high-end videocards) to be able to scoop up transactions , validate them, compose a unique block, find the suitable nonce value for the block's header then broadcast it to the network of other nodes in hopes it is accepted into the blockchain. That's a lot of work. And it bitcoin was designed to make it get more and more difficult over time. Understand though that PoW is more like busy work. It's actually not needed. It just wastes more electricity. This is why many are looking seriously at better alternatives like Proof of Stake (PoS) as the more efficient way of doing things.

It's fascinating to see that the top 5 miners are handling 61% of the block confirmations. The top 4 own 51% ... If you know much about cryptocurrency there is a thing called the "51% attack". If these 4 colluded together they could defraud the bitcoin network on a massive scale and it would be difficult to stop them and even might go unnoticed for a very long time.

I think a better future lies with Ethereum, another cryptocurrency, and its interesting Dapp (distributed apps) and DAO (decentralized autonomous organization) methodology because it expands on what bitcoin is via allowing the blockchain to run turin-complete code within the blockchain. You could essentially generate apps like 100% fair elections for countries, not relying on corrupt governments to tell you who they ultimately want to win.

Right now cryptocurrencies are still in the greed bubble phase for the general public -- people see it mostly as a way to make quick easy money on an exchange. And many are making a killing right now. Of course, for the dark web it's hugely important for drug cartels, etc. But i think when this all finally settles down and bitcoin has its inevitable bubble burst (and it will happen) then we should finally start to see it's real potential come into fruition.

But i dont think cryptocurrencies will ever supplant fiat currency ever. I mean, think about it, how would cryptos make my life easier? Sure, it reduces the fees and middlemen involved but it actually makes my life a bit harder e.g. i must wait hours or days to send/receive money (which btw can and will be resolved eventually from what i can see in the code). But i don't think it will ever go away like how banks and governments (they are bed buddies let's not forget) wish it would since it hurts their underlying need for control.

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Re: cryptocurrencies and mining

Post by Vaper » 22 Nov 2017 14:56

I do not pretend to understand them, but my Son is very comfortable in this area.seekingalpha had some great articles on this subject and it is rumoured that big money looking to hide from Governments,specifically Russia and China, are active in this area.
Big money is being made but I suspect by a select few.??

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Re: cryptocurrencies and mining

Post by Peculiar_Investor » 22 Nov 2017 18:10

Vaper wrote:
22 Nov 2017 14:56
I do not pretend to understand them
Me too. I doubt many who are currently "playing" in this area understand how the "market" in them works either.

I'm a follower of the foundation provided by Ben Graham who began his classic book, The Intelligent Investor, in Chapter 1 with
Ben Graham wrote:An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.
Without a doubt I'd classify this under "speculation" rather than investing and therefore I'd have no interest in this area.
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Re: cryptocurrencies and mining

Post by SoninlawofGus » 22 Nov 2017 18:45

ghariton wrote:
04 Aug 2017 23:10
I have enough problems getting my head around fiat currencies issued by governments/central banks. Cryptocurrencies are too much of a stretch for me.

George
And, if memory serves, weren't you a chief economist at BMO? Not that you should understand finance or money supply or anything like that. :roll:

I too have tried to understand them; I've read several of the articles "for dummies," all which seem to eventually ramble into simplicity for developers only (usually around the time the graphics are pulled out). Even then, I wonder to what degree those who purport to understand them really do. A whole lotta really smartish technical people were running around during the tech boom too, justifying infinity PE stocks with all kinds of pseudo-analytical babble and statistics -- worked out great for awhile; didn't end well for the mid/late adopters.

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Re: cryptocurrencies and mining

Post by Chuck » 22 Nov 2017 21:15

I'm not paying any heed to crypto currencies personally, but two things about them are annoying me.

1) Upper-mid range video cards which represent good bang for the buck are in short supply due to crypto mining mania
2) The new spamware seems to be crypto-mining scripts which co-opt your cpu for mining and can run it up to 100% usage. Some sites even ask your permission to let them use 30% or so of your cpu power in lieu of/or in addition to ads.

The whole crypto business smells off to me. It has a whiff of 21st century tulip mania. I'm sitting the whole thing out regardless.

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Re: cryptocurrencies and mining

Post by ghariton » 22 Nov 2017 21:39

SoninlawofGus wrote:
22 Nov 2017 18:45
And, if memory serves, weren't you a chief economist at BMO? Not that you should understand finance or money supply or anything like that. :roll:
Bell Canada.

I worked mainly in microeconomics, so currencies were a nuisance to be worked around, not something to be understood.

The short description of a currency is: Anything that a sufficient number of people trust that they can use to exchange for goods and services. The key word, in my opinion is "trust". You don't have to understand something to have trust in it (my wife comes to mind), but in most cases it sure helps.

George
The plural of anecdote is NOT data.

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Re: cryptocurrencies and mining

Post by Koogie » 06 Dec 2017 12:55

cryptocurrency-iota-rallies-after-launch-of-data-marketplace
https://www.cnbc.com/2017/12/04/cryptoc ... place.html

iota-data-marketplace
https://blog.iota.org/iota-data-marketp ... 6be463ac7f


Can anyone explain this gibberish ? Coherently ?

"Data is the new oil ?" Does that mean I'll need a data filter for my car now ??!! :rofl:
Buy very little, sell even less.

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Re: cryptocurrencies and mining

Post by DenisD » 06 Dec 2017 14:04

I thought dataism was the new religion. Much more than merely oil.

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Re: cryptocurrencies and mining

Post by patriot1 » 06 Dec 2017 20:29

ghariton wrote:
22 Nov 2017 21:39
The short description of a currency is: Anything that a sufficient number of people trust that they can use to exchange for goods and services. The key word, in my opinion is "trust".
"Trust" to me means confidence in the stability of its real purchasing power in at least the short term, i.e. it's suitable for pricing both assets and obligations. Of course the "cryptocurrencies" fail this miserably.

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Re: cryptocurrencies and mining

Post by Flaccidsteele » 06 Dec 2017 23:03

Just FYI that bitcoin was never classified as a currency. It's been classified as a commodity for years.

https://www.cnbc.com/2015/09/18/bitcoin ... he-us.html

https://www.theguardian.com/technology/ ... -irs-rules
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hamor
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Re: cryptocurrencies and mining

Post by hamor » 07 Dec 2017 20:12

I watched Banking on Bitcoin on Netflix.
Interesting, but still left me with questions, e.g. how was it possible for that site in Japan (Goax?) to 'lose' or steal so many coins (the value has to be in billions $$$ now). If blockchain is secure and distributed...?

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Re: cryptocurrencies and mining

Post by Rysto » 08 Dec 2017 16:29

hamor wrote:
07 Dec 2017 20:12
I watched Banking on Bitcoin on Netflix.
Interesting, but still left me with questions, e.g. how was it possible for that site in Japan (Goax?) to 'lose' or steal so many coins (the value has to be in billions $$$ now). If blockchain is secure and distributed...?
You mean Mt Gox? Anyone with a copy of a person's bitcoin wallet can initiate a transaction to move bitcoins out of the wallet into another wallet. With Mt Gox (and other similar hacks), the wallet was stored on Mt Gox's servers. The hackers got access to the servers, copied the wallets, and then transferred all of the bitcoins out of them into wallets they controlled.

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