[McLaren Rulez]

Originally Posted by am1m

I don't see how much value a thread will have if it's just a bunch of guys (me included) all sitting around posting and patting ourselves on the back for not investing in something.

Crypto is one of those topics where the discussion is so polarized that finding common ground is rare. It's either "total scam, it's all just like tulip mania, stay away from the ponzi" or "this is your ticket to financial freedom, no-coiners are just idiot boomers who can have fun staying poor". It's very unlikely to see anyone's views on the matter change from that entrenched position.

If you're new to the space, Wikipedia is probably the most neutral and informative place to start - never start with forums/Reddit/Quora etc. for this.

[Samurai]

Originally Posted by McLaren Rulez

Crypto is one of those topics where the discussion is so polarized that finding common ground is rare. It's either "total scam, it's all just like tulip mania, stay away from the ponzi" or "this is your ticket to financial freedom, no-coiners are just idiot boomers who can have fun staying poor". It's very unlikely to see anyone's views on the matter change from that entrenched position.

Yup, it is just like the fight between flat-earthers and round-earthers.

[efgritesh]

I was fortunate to know about crypto in detail 10 years back, so I assume I am eligible to comment on this topic.

It was back in 2012 when there was a question in one of those question papers for UPSC about bitcoins. I did my research and came to a conclusion that its a waste of time and money. Bitcoin mining never made any sense to me. back then it was more about mining then, appriciation or investing. But wasting real resources like electricity and computing power to mine what? was the question that bothered me the most.

Bitcoin was less than a dollar that time.

[anjan_c2007]

Many ambitious youngsters (but none of them from my family or even among my relatives) have lured me to invest at least something around 2020-21 in bitcoins, just to see how wealth is created and gets multiplied by just doing nothing.

I have totally refrained myself from investing and so is the case with my family members. My contentions though like a layman were very rudimentary :-

(1) I don't believe in abstract wealth.

(2) I don't believe in speculation with such abstract wealth.

[astrodex]

I won't say Crypto or Blockchain is a scam, it is indeed a very useful technology. But what I don't really understand is the concept of 'investing in Crypto'. I totally get using Bitcoin as a currency to trade, but the boom that is now happening is what I feel artificial. If the value was appreciating because more people were using it to trade, not invest, I would have been far more happier with it. What concerns me is that for all of the transaction that happens for BitCoin, very few is actually for goods, I remember reading that 99% of it is investor to investor.

The crash, ironically, isn't what I really expected. I thought the Ukraine war would cause the citizens of those countries, especially Russia to turn to BitCoins in a large way to avoid currency depreciation, causing a surge in BitCoin, but that didn't happen. People ran to the dollar instead.

I really do feel that having a currency like Crypto would help out in giving us a world currency that does not get manipulated very much and is going to be even better than hard holdings like real estate. Maybe what is happening now is the early stages and things will settle, but until then it is just speculators trying to make a quick buck without any fundamental value. Very similar to what happened before the dot com bust where every company was adding a Technology or Infotech moniker to their name and getting listed on stock market for huge gains.

Personally, I have stayed clear of this, normal SIP and Mutual Funds are enough of a risk for me.

[Nav-i-gator]

Originally Posted by arjyamaj

What is the underlying asset class for Bitcoin? Or most cryptocurrencies for that matter?

There is none.

Offering a counter-argument, just for the sake of it. The rupee has value because the Reserve Bank of India says that it does. The RBI gets this power from the RBI Act, which gets its power from Parliament, which gets its power from the Constitution of India. The Constitution of India gets its power from the first three words in the Preamble - "We the People". From a purely democratic and legal standpoint - if enough people believe that Bitcoin has value, then it does. Democracy works in weird ways.

Thanks. This is quite a logic, and I think the correct inference of Crypto-Mania.

If enough people believe in it, and are ready to buy/transact/invest, the value grows. I don't see it much different from the IPO of loss making companies, running on investor's money. The underlying value is a "promise of future returns" only.

But I still think there is a lot of scam going on with crypto-investment. Not an inherent issue with Crypto per se, but these days people are so much more interested in anything that promises higher than inflation returns, that they don't even try to understand the concept fully.

Every now and then I am being added to some whatsapp group, all adding random people and showing them how to invest and earn handsome profits basis their advise. It's scary. Someone (group admin) will tell how to invest through their link, ask them to start a sell option or something and within 30 sec or so, other people will start reporting how much they earned basis the advise of admin. I am assuming all this to be a sham, and every time not only I leave the group, I report it too.

[greenhorn]

I'm with Snowden on this. Crypto is a payment mechanism. Use it that way, not for speculation. The only guy I've met who's happy with crypto is someone who uses it for international trade with a bunch of banana republic countries and using usdt takes a lot of exchange rate risk out. Risk is still there, but a lot less than using the respective currencies

[shikha_roy]

Thanks for this thread. Sorry for being slightly off topic: Anyone ever invested in P2P lending through Faircent or similar platforms? Is it safe and guaranteed ? I could not find a thread on P2P in TBHP hence asking.

[thanixravindran]

Originally Posted by arjyamaj

Former capital markets lawyer - now turned prof here.

The rupee has value because the Reserve Bank of India says that it does. The RBI gets this power from the RBI Act, which gets its power from Parliament, which gets its power from the Constitution of India. The Constitution of India gets its power from the first three words in the Preamble - "We the People". From a purely democratic and legal standpoint - if enough people believe that Bitcoin has value, then it does. Democracy works in weird ways.

Agreed. Underlying all these is the economic output either individual or collective at a nation state level even if we argue borders are man made which in turn goes towards the needs and productive potential of the people.

I am no stranger to these easy money instruments from childhood growing up in TN. Have seen people lost money in MLM schemes, private finance companies promising obscene interest rates, teak wood forest growing time shares, Emu farms among the countless scams recurring each few years. All of it points to only one thing - Human tendency to move forward than others by any means (not bad per se as it is natural instinct).

Many who has deep pockets and who has lost some money will still be okay. But poor guys who borrow to enter these type of investments and end their life at the end is gruesome. Like liquor ads, these ads need to come with stringent warnings to prevent the larger society. It is still okay to have crypto as long as we still have gambling and lottery around.

[xway]

Awesome thread and comments.

I belong to IT industry and do understand Blockchain, Web3 and allied technologies a bit.

Cryptos for some reason gave me the feeling of someone buying a Product and has to make 5 members to get returns, and then those 5 another 5 and so on 5^5^5^5 till infinity, and the one on the top will be richer than wealth of entire world combined X times over

This is how it looks and feels reading exploring Crypto investors, as they seem to be loud advocates of it and keen on others joining the network.

Currency too is no longer having any underlying asset or Gold standard as in the past, but at least it can be held and most use it everyday.

We see the hyperinflation and the mess world is in right now, due to excessive currency printing by governments the world over.

Yes there can be a disruptive mechanism to trade other than the means now, maybe Crypto is it or more so isnt it, I do not know.

In times like these no matter what, good old real estate and gold or anything physical seems more concrete to keep than currency or some digital algo.

[One]

Originally Posted by bhairavp

I had mined about 28 bitcoins in 2013, on my personal computer at home.

I think I have found my lodestar. Just a couple of questions:
1. What are your current interests that you are working on
2. What are you currently doing in your PC

[vj_torqueaddict]

Back in 2008 when there was a financial meltdown. Somebody somewhere wrote a whole new technology ( block chain) overnight to come up with a decentralised currency. So that so called banks don't loot your money and declare bankruptcy. Many believe it was written by a guy called Satoshi, nobody knows who he is though.

I personally believe digital currency is the future, however governments will never let it be decentralised like what bitcoin is ( or how Satoshi meant it to be). So yah I have pretty much stayed away from it.

Btw big fan of your posts, Riderzone.

[aa1997]

For me staying away from Crypto or even the IPO frenzy last year was driven by one personal notion - If everybody is doing the same thing to make money then nobody will get rich at the end of it.

Let’s say an opportunity is present where you Invest Rs.100 and expect it to return Rs.200 after 3 years. Now everyone invests and doubles their money after 3 years. In this case even though you made a return it won’t be of any real utility as everyone else also made the same return. Somebody who had started with Rs.1000 will be still richer than you and someone who only put Rs.10 will be poorer.

Over-simplifying it, to become rich you need to beat market returns. To beat market returns your money needs to be put behind smart opportunities. But If everyone is doing the same then that probably ain’t the smart option to start with. You can ride the wave or time the market etc to get out but that also equates to being smarter money than the rest of the to-the-moon HODL crowd.

Inherently returns are inversely proportional to the amount of risk taken. So whenever an increasing number of people start chasing the same opportunity than the return will become normalised. Even in stocks as more people start chasing the same stock, price rises quickly and the returns that were in line with the underlying improvement in fundamentals start tapering off. Now more often than not by the time we hear about a hot stock or crypto in mainstream media or even social media it’s already quite late.

[rkv_2401]

Originally Posted by aashishnb

I would like to understand more how to mine bitcoins.
In the gold rush, the people who made money are the ones who provides the shovels!!

In 2021-22, Crypto mining was the gold rush and the people who made money were the ones who sold the hardware for it.

I mean, think about it. You had 6-7 year old cards that are 3 generations old selling for more than their MRP was when they brand new, a 2.5-3x markup even on last-gen graphic cards like the RTX 2060, and all this in an environment where a generation of PC components are considered obsolete in the market after the new generation comes out?

[2000rpm]

Originally Posted by RiderZone

If you're someone who's succesfully gambled with crypto, I have big respect for you. "Behti Ganga mein haath dhona" is easy to say, but not so easy to do. For people like me with limited attention spans however, Bitcoin continues to be a trillion dollar red flag.

Sorry to say, but the view point is not only uninformed but highly immature (to take such a stance on something you don't understand as well).

Equating blockchain to Bitcoin is the first mistake in your write up and every goes downhill from there, because of that assumption. I strongly suggest you read up on the Web 1.0 to Web 2.0 transition and now the journey for Web 3.0.

Also, the fact that you have not put other investment instrumental to the same level of scrutiny is a worry.

What is the USD currently backed by, how is money appearing from thin air?
Why is gold so valuable??
Why is a 380 sq. ft. 1bhk in Mumbai priced at 1.5 cr?
Why are start-ups valued at their current valuations?

I would strongly suggest that people on the forum, research new disruptive technologies and ATLEAST have an open mind towards them. Without this mindset, we would still be riding horses now.