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Do you own Cryptocurrency? A poll

How to buy, profit and invest in crypto currencies or NFTs

Do you own any cryptocurrency? If yes, what proportion of your assets is it worth?

Yes - less than 1%
17
12%
Yes - more than 1% but less than 5%
6
4%
Yes - more than 5% but less than 10%
3
2%
Yes - more than 10% but less than 20%
1
1%
Yes - more than 20% but less than 50%
0
No votes
Yes - more than 50%
2
1%
No
110
79%
 
Total votes: 139

absolutezero
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Do you own Cryptocurrency? A poll

#403445

Postby absolutezero » April 11th, 2021, 5:14 pm

I pop in and out of the crypto discussions on here and find them interesting.

I don't think I have yet seen anything asking how many of us own any crypto and if so, how much.

For this poll, 'crypto' means Bitcoin, Ethereum or any other cryptocurrency traded on the liked of Coinbase, Binance etc

For the record. My answer is no.
I think I have missed the boat with it over $50,000. (Or over $1,000 for that matter).

Midsmartin
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Re: Do you own Cryptocurrency? A poll

#403456

Postby Midsmartin » April 11th, 2021, 6:00 pm

I almost almost bought in 2011 just to see how it worked, but there didn't seem to be well organised exchanges, and I didn't really trust where my money was going, so I didn't buy. They did give me, free, 0.01 bitcoin for signing up, which is now worth £300!

Later I bought 0.8 bitcoin in 2014, which I still have. I try not to think about it.. Maybe it will crash and become worthless again, in which case so be it.

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Re: Do you own Cryptocurrency? A poll

#403459

Postby JohnB » April 11th, 2021, 6:09 pm

None, and I never will for environmental reasons.

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Re: Do you own Cryptocurrency? A poll

#403466

Postby Lootman » April 11th, 2021, 6:53 pm

JohnB wrote:None, and I never will for environmental reasons.

Do you therefore also own no airlines, miners, oil and chemical companies, steel/metal processors or heavy industrial names?

Greenery or lack thereof is not a concern for me although I own no crypto at the moment. I may take a small speculative position in listed shares around the space, like Riot Blockchain, probably through options to define risk.

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Re: Do you own Cryptocurrency? A poll

#403472

Postby bluedonkey » April 11th, 2021, 7:26 pm

Lootman wrote:
JohnB wrote:None, and I never will for environmental reasons.

Do you therefore also own no airlines, miners, oil and chemical companies, steel/metal processors or heavy industrial names?

Greenery or lack thereof is not a concern for me although I own no crypto at the moment. I may take a small speculative position in listed shares around the space, like Riot Blockchain, probably through options to define risk.

I think you're being unfair. The guy's doing something to reduce his carbon footprint. Perhaps he could do more, perhaps not. If he advocated absolute carbon abstinence, no doubt he'd be criticised for being impractical/telling us to live like monks.

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Re: Do you own Cryptocurrency? A poll

#403490

Postby Midsmartin » April 11th, 2021, 9:45 pm

I've avoided buying more bitcoin partly for green reasons. I don't fly. It's such an easy saving to make.
As an investor, is nearly impossible to be entirely environmentally clean. For a long time, JD sports was my biggest holding. What do they do? Largely they convert oil into very short lived non-recyclable shoes that end up in landfill forever, while their warehouses destroy green spaces. But I can't cut myself off from the modern world. It's not possible in the UK. Land or food is not free, and council tax must be paid. Life is full of contradictions.

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Re: Do you own Cryptocurrency? A poll

#403519

Postby Urbandreamer » April 12th, 2021, 8:05 am

I don't own any, but it's not for environmental reasons.

If you do your research you will find that the environmental argument is not as cut and dried as it is often presewnted.

The amount of energy used to support bitcoin is an economic estimate, all be it based IMHO on sensible assumptions. The CO2 produced is yet another estimate based upon each countries average CO2 per watt.

This ignores dual use. Where the waste heat can actually be an important product. It also ignores mining rigs that run on waste methain. Or indeed known cases where a countries energy used for bitcoin is mostly from renewable energy, unlike other energy uses in that country. Carbon offseting?

Indeed bitcoin seems unique in that it seems the only activity that can't by some arguments, improve it's carbon footprint by actualy doing things in the real world.

As I said, do your own research and judge the enviromental case yourself.

The reason that I don't own any is that it's a poor medium of exchange where I live. I could own it as a store of value, but I could also own gold and don't do that either.

It doesn't stop me being interested though.

absolutezero
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Re: Do you own Cryptocurrency? A poll

#403538

Postby absolutezero » April 12th, 2021, 9:43 am

Lootman wrote:
JohnB wrote:None, and I never will for environmental reasons.

Do you therefore also own no airlines, miners, oil and chemical companies, steel/metal processors or heavy industrial names?

Greenery or lack thereof is not a concern for me although I own no crypto at the moment. I may take a small speculative position in listed shares around the space, like Riot Blockchain, probably through options to define risk.

I really don't care about greenery.

I've done the greenest thing anyone can do: I will not be having children.
(Not for environmental reasons. I just don't like children.)

So my first question for green people is about how many children they have/intend to have. If it's a non-zero answer then they can be ignored.

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Re: Do you own Cryptocurrency? A poll

#403539

Postby absolutezero » April 12th, 2021, 9:44 am

Midsmartin wrote:I almost almost bought in 2011 just to see how it worked, but there didn't seem to be well organised exchanges, and I didn't really trust where my money was going, so I didn't buy. They did give me, free, 0.01 bitcoin for signing up, which is now worth £300!

Later I bought 0.8 bitcoin in 2014, which I still have. I try not to think about it.. Maybe it will crash and become worthless again, in which case so be it.

Do you not think about it enough to not want to cash in your $40,000?

The exchange to me seems to be the weak link where something is most likely to go wrong. That's what always put me off.
I believe they have got better but it still doesn't pass the smell test.
Plus now. Tulip bulbs.

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Re: Do you own Cryptocurrency? A poll

#403551

Postby bluedonkey » April 12th, 2021, 10:21 am

To the extent that I understand it, cryptocurrencies seem to be a form of currency (obviously!). My train of thought is that I am not drawn to speculate/invest in forex (yen, $, etc), so why do so with crypto?

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Re: Do you own Cryptocurrency? A poll

#403553

Postby seekingbalance » April 12th, 2021, 10:22 am

JohnB wrote:None, and I never will for environmental reasons.


If that is your only reason, you need to do more research into what these things are. The question was not “do you own Bitcoin” it was “do you own Cryptocurrency”. Just as owning shares in Tesco is not the same as owning shares in Shell or BP, owning certain Crypto projects is nothing like the same as owning Bitcoin. Are you saying you would never own shares in Tesco because Shell are not environmentally friendly?

Not all crypto tokens use proof of work (the thing that Bitcoin and Etherium (currently) use to make the networks work and keep them secure.

Lots of other cryptos use “proof of stake”, and Etherium is moving to this later this year, which does not use all that computing power. Networks that use this include Dot, Cardano, Binance Smart Chain, EOS, soon to include Etherium. There are dozens of smaller crypto tokens that run on these networks, in fact when Etherium switches, nearly every mainstream crypto token will be proof of stake, not proof of work, as most networks run on Etherium, not Bitcoin.

Proof of stake is somewhat like shareholder voting - the more shares you own the bigger the vote you get in the running of the company (but in the case of crypto this is actually true!) as all networks are open source and run by votes from stakers - but like shareholdings these tend to get “pooled” by smaller owners, allowing groups somewhat akin to fund managers to vote on their behalf. These votes are real world nitty gritty, down to what capabilities to include in networks, the rewards stakers get, future direction. These “projects” are all just tech companies, using tokenisation to run their business rather than shares, though these tokens have to have “utility” so as to pass for being essential to run the project as opposed to shares in disguise.

And as an aside to that, while yes it is true that Bitcoin mining uses a lot of power, the economics of the process is now forcing miners to use the very cheapest electricity and this often means dedicated server farms near thermal, wind and solar farms. Several of the biggest ops are using dedicated power generation tied to the gas flares in Northern Canada, so are actually using power sources that would otherwise just burn off into the atmosphere, and a large number are in Iceland and Northern Sweden, using “free” thermal power and outside temperature cooling.

Amazon web services (allegedly) use more power to run the data centres that run much of the worlds computing. Like Bitcoin this is mostly renewable, but it does put Bitcoin in perspective.

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Re: Do you own Cryptocurrency? A poll

#403561

Postby seekingbalance » April 12th, 2021, 10:36 am

bluedonkey wrote:To the extent that I understand it, cryptocurrencies seem to be a form of currency (obviously!). My train of thought is that I am not drawn to speculate/invest in forex (yen, $, etc), so why do so with crypto?


To be clear, the term Cryptocurrency is something of a misnomer. For the vast majority (pretty much anything other than Bitcoin, Bitcoin Cash and Bitcoin Gold) of the things lumped under the term Cryptocurrency they are absolutely not currencies in the way dollars and euro are.

Think of them as a combination of voting rights shares in a company and a thing that allows you to transact on a platform. To be fair, this latter part is a lot like a currency, but think of it more like Tesco shopping points, or air miles or buying tokens to play the advanced parts of an otherwise free or paid for game.

As an example there are now several platforms where you can buy pieces of digital art, including record albums, concert tickets and multiple other things. To buy the items you deposit money, which buys you tokens, which you can then buy the art with. Some platforms make that very transparent- you are literally buying a thing to buy a thing, but others it is more simple, you pay in some dollars and in the background you actually buy a token which buys the thing you are buying. Either way, you are buying a piece of art with real money.

Crypto projects do many, many other things, but this is the essence of how the crypto currencies work.

As an “investor” ie not someone who is buying the art, you are essentially buying a share in the company that runs the project and making a bet on whether that project will succeed, just like buying a true share in a tech or finance or gaming startup.

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Re: Do you own Cryptocurrency? A poll

#403582

Postby JohnB » April 12th, 2021, 11:14 am

I would rather AWS used Icelandic cheap power to do something useful, than Bitcoin miners to waste it doing something pointless. There are very few places with very cheap power that could not benefit from doing something else with it, whether it be producing green hydrogen (generally a bad idea, but better than bitcoin), or running distributed scientific computing. Protein Folding and even SETI is more useful than Bitcoin.

If the non-proof of work cyptocurrencies are as good as Bitcoin, why don't people abandon it, or slap it with carbon taxes to force it out of existence. Do you want Blood Diamonds when you can get artificial ones?

And I invest in whole market trackers, not ethical ones, and hope that Vanguard explain to companies why proof-of-work cryptocurrencies are evil. Only when people don't lump all cryptocurrencies together can the polluting ones be closed down.

Its good to see that Iceland interconnects are being planned. http://atlanticsuperconnection.com/
Last edited by JohnB on April 12th, 2021, 11:19 am, edited 3 times in total.

seekingbalance
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Re: Do you own Cryptocurrency? A poll

#403583

Postby seekingbalance » April 12th, 2021, 11:15 am

I started with a 1% allocation, but Bitcoin rose so quickly it soon became 3%, despite the market also going up. I have since added other projects, bringing my total input to 2% of my portfolio, but this in turn has grown to 5%, despite my regular equities and bonds portfolio nearly doubling. I now pretty much only buy Crypto projects with any new money.

I treat all crypto projects as investments in new tech startups, as shares in these businesses, because that is exactly what they are.

For those who don’t understand what they are, it is really worth doing some more research - to my mind anyone who would buys shares in small companies (like I assume many on these forums would be doing) should not dismiss crypto, but at the same time should treat Crypto projects as they would small shares - carefully and with money you can afford to lose.

There are hundreds of projects, and for sure the bottom end of these is the true Wild West and to be avoided at all costs. But the bigger projects are very big - many are capitalised at FTSE100 levels. Projects like Etherium, Cardano, Dot are networks that run the entire crypto ecosystem- kind of like the internet itself, combined with Amazon web services, Microsoft Azure and a huge legal firm.

Other projects run on these networks, and range from the equivalent of Banks (Aave, Maker, Compound, Blockfi, Crypto.com, Binance), brokers, like YouInvest, ii, Halifax Share dealing, eToro, Robinhood (Binance, Crypto.com, Uniswap, Sushiswap, Bitrex), analytics companies (The Graph, Parsi, Dextools, many others), gaming and collectibles (Ecomi, Vechain, Opensea, Enjin, Wax, Decentraland, Origin, Chiliz), network bridging (Link), file sharing (Filecoin, BitTorrent, Holo, Ocean), online shopping (Shopify)

Basically, you name it, there are projects doing it.

And they are not materially different from many small cap shares I have done well in or not, have gone up massively or have gone bust, and many of them are mega cap behemoths that are bigger than most U.K. companies in size - Etherium is $248bn, Binance is $88bn, Cardano $41bn, Dot is $37bn, Uniswap is $18bn. The 50th biggest project is $2.5bn - solid FTSE 250 territory.

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Re: Do you own Cryptocurrency? A poll

#403596

Postby absolutezero » April 12th, 2021, 11:32 am

seekingbalance wrote:
And they are not materially different from many small cap shares I have done well in or not, have gone up massively or have gone bust, and many of them are mega cap behemoths that are bigger than most U.K. companies in size - Etherium is $248bn, Binance is $88bn, Cardano $41bn, Dot is $37bn, Uniswap is $18bn. The 50th biggest project is $2.5bn - solid FTSE 250 territory.

This is interesting.
So how do you decide whether to buy? Or when to sell?
If I was buying small company shares I have PE ratios, dividend yields, audited accounts, debt levels, EBITDA etc.

Do these crypto projects have equivalent numbers?
If so, how do you value them?
If not, how is it investing and not just gambling/speculation?

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Re: Do you own Cryptocurrency? A poll

#403600

Postby seekingbalance » April 12th, 2021, 11:36 am

absolutezero wrote:
The exchange to me seems to be the weak link where something is most likely to go wrong. That's what always put me off.
I believe they have got better but it still doesn't pass the smell test.


You are right in that the exchanges are a potential weakness- but is that any different to a bank or an exchange like Robinhood, Halifax, ii?

And if you are concerned about an exchange going down or bust you can always use private wallets, or better still a private hard wallet, which is like a USB drive but with immense security (but don’t lose your passwords!) Even these drives are recoverable if it breaks or you lose it, as all transactions ever made are on the blockchain, so with the right pass phrase (up to 24 different words) you can reconstruct a wallet.

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Re: Do you own Cryptocurrency? A poll

#403605

Postby absolutezero » April 12th, 2021, 11:46 am

seekingbalance wrote:
absolutezero wrote:
The exchange to me seems to be the weak link where something is most likely to go wrong. That's what always put me off.
I believe they have got better but it still doesn't pass the smell test.


You are right in that the exchanges are a potential weakness- but is that any different to a bank or an exchange like Robinhood, Halifax, ii?


Yes. Very different.
Banks and brokers in the UK have FSCS protection up to £85,000 of losses and regulation by the FSA.
Crypto exchanges only need to comply with money laundering regulations (KYC stuff). The rest is wild west.

seekingbalance
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Re: Do you own Cryptocurrency? A poll

#403606

Postby seekingbalance » April 12th, 2021, 11:55 am

absolutezero wrote:
seekingbalance wrote:
And they are not materially different from many small cap shares I have done well in or not, have gone up massively or have gone bust, and many of them are mega cap behemoths that are bigger than most U.K. companies in size - Etherium is $248bn, Binance is $88bn, Cardano $41bn, Dot is $37bn, Uniswap is $18bn. The 50th biggest project is $2.5bn - solid FTSE 250 territory.

This is interesting.
So how do you decide whether to buy? Or when to sell?
If I was buying small company shares I have PE ratios, dividend yields, audited accounts, debt levels, EBITDA etc.

Do these crypto projects have equivalent numbers?
If so, how do you value them?
If not, how is it investing and not just gambling/speculation?


Good points all. Yes, there are equivalents, with metrics such as token float, staking levels, value of staked coins locked in the protocol, value of transactions on the platform, volume of transaction, volume of customers, volume of active customers, yield on stake, loan levels, collateralisation, utility value of the token, earnings, dilution rate, token burn rate. The code for any project will be audited, many times.

And just like there are a zillion different ways to value a company, these all have different meanings for different people, and arguably don’t mean much anyway. Sure, you can compare PEs - but how do you compare SSE with Scottish Mortgage, Amazon with Tesco, Lloyds with ITM power? You might like dividend yields, but are they real, are they sustainable in a pinch? You can look at CAPE ratios, Tobias Q, PYAD - all are fine until they are not, and arguably are fighting last decades’ war.

So, to answer you specifically with my own methods, I basically do what I do with most small punts I make in share purchases - look at the company (the project in the case of Crypto), their business, their people, the buzz in the market, their momentum, their comparison projects, and yes some of the metrics I mentioned above (token deflation is a good one for some areas, token expansion for others).

Again, to be very clear, these (other than maybe Bitcoin) investments are the rocket fuel at the bottom of the stack, they are NOT index funds, not FTSE100 blue chips, not a Vanguard target date fund, not a Government bond. They are not even Amazon, Apple, Microsoft (other than perhaps Etherium, Dot and Cardano). These guys are SRT, ITM Power, ASOS, Fevertree, Patagonia Gold, IQE, Wolfson, and maybe, just maybe early days ARM, Netflix, Dell.

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Re: Do you own Cryptocurrency? A poll

#403607

Postby seekingbalance » April 12th, 2021, 11:57 am

absolutezero wrote:
seekingbalance wrote:
absolutezero wrote:
The exchange to me seems to be the weak link where something is most likely to go wrong. That's what always put me off.
I believe they have got better but it still doesn't pass the smell test.


You are right in that the exchanges are a potential weakness- but is that any different to a bank or an exchange like Robinhood, Halifax, ii?


Yes. Very different.
Banks and brokers in the UK have FSCS protection up to £85,000 of losses and regulation by the FSA.
Crypto exchanges only need to comply with money laundering regulations (KYC stuff). The rest is wild west.


Hence my point that all crypto can be taken off the exchanges and held in a private hard or soft wallet.

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Re: Do you own Cryptocurrency? A poll

#403609

Postby AleisterCrowley » April 12th, 2021, 11:59 am

JohnB wrote:I would rather AWS used Icelandic cheap power to do something useful,...

Isn't a lot of Icelandic power used for alumnium smelting? Just a vague memory from reading a book about the financial crash there


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