[V.Narayan]

Originally Posted by am1m

What would help is if people who have made some money, or even lost money (because that is learning too) would post their personal experiences and learning.

Thank you as always for making a poignant statement. Still waiting to meet one person, an IT geek perhaps, who has become a multi-millionaire through bitcoin trading and converted that notional wealth to a hard asset like cash in the bank or stocks. I'll ignore the ones on social media who make claims.

Originally Posted by DrCar

I have a complete opposite view of crypto......
Your real estate prices are under the mercy of government regulations, even the gold that you bought are not useful when government demands you to return it to fight recession, even your bank savings accounts aren't foolproof if banks decide to do a scam, scams within mutual funds are in news now a days, cash in hand can anytime be made illegal overnight. So what is safe then?

You are mixing up apples and oranges. Just because there is no magic fool proof cure for cancer it means all medicines for all diseases are ineffective. That is how your argument comes across.

One has to take adequate risks to gain success to be in top 5% of population. Remember, Ambani, Adani, Tata, Mahindra always took some business risks throughout their life to consistently stay in the position that they are now.

As a self made entrepreneur I think I'm qualified to answer this. In entrepreneurship you take some educated risks, sometimes big risks and back it up by your own toil and sweat and not by hope that some speculative market will move in your favour. In entrepreneurship you don't live with the forlorn hope that you'll become a $ multi-millionaire by luck of lottery but by the knowledge that if you do X, Y, Z and keep at it for 30 years and retain your sanity and level headedness through it you could come out a winner. To compare the risks of an entrepreneur with that of the risk of investing in speculative bitcoins reflects a lack of any understanding of entrepreneurship. Entrepreneurship also creates jobs, factories, GDP, pays taxes, contributes to CSR for society .....and Bitcoin???.

Originally Posted by 2000rpm

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)....

Out of curiosity please could you first do share with us how much of your networth have you invested in bitcoins. In my case the answer is zero.

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?

The USD is backed by the largest economy in the world, the printing capacity of the Federal Reserve and about 7000 tonnes of gold and a unknown amount of silver. It is also indirectly backed by the combined wealth of every person, every corporation, every organization in USA including the Govt. And it is backed by the largest armed forces to protect that combined national wealth, land, minerals etc. Currently yes the US is over doing its capacity to print but the demand from world trade is great enough to absorb it all - real trade of goods that people buy and consume. The 1 BHK flat in Mumbai and start-ups are over valued and we all have a option of not investing. Just the way bitcoin is over valued. I could write about gold but the story is too long.

At some point in the coming 10 or 15 years some form of a digital currency backed by technology (blockchain Mark 2.0?) will become a standard for central banks of the world to accept both as a store of wealth and as a exchange value. This is needed now that the US has weaponized the US$ in the wake of the Russian invasion of Ukraine and the world economies need an alternative to the USD for global trade and as a safe store of wealth by nations.

[girishkamath]

This is an interesting thread -
I come from a tech and finance (yep both! I know that’s strange) background and know a little bit of these..

Here are my 2paise
I worry if someone where to make crypto a legal currency.
The most financial turmoil’s in countries are due to the fact that Governments printed excessive currency notes. The inflation spiraled out of control for these countries and we even saw pictures of billion dollar notes. The entire economy and people’s savings were wiped out. So, I believe that the currency circulation in the market should be controlled by central bodies.
Excessive and uncontrolled currency in the country will eventually lead to inflation.
Economy of a country need to grow in a controlled manner and works only when there is a correlation between currency in the system vs goods and service generated in the country.

Imagine now - if private entities who are write some cool protocols and launch their own crypto currencies (That’s what is happening now) and what if there are trillions of dollars worth of currencies in the market, inflation will go crazy high.
The goods and services remain the same and suddenly if we have 5x more currency, obviously things will go out of control.

Add to that Crypto;s currently are a speculative assets.
Hope some of you would have read the cases of TERA and LUNA. If not, do google. These just became ZERO, it was not even a crazy, it got wiped out in a matter of days !
They were supposed to be “Stablecoins”

So, in the current form Crypto is a BIG NO for me. It might be good when central governments release their digital currencies.

Coming to the tech part -

The underlying technology below the crypto is the Blockchain. Now this is a good technology as it can be used for lot of human good use cases like healthcare etc.
The only problem now in Blockchain is the mining and validation bit which takes crazy loads of electricity which is not good for the environment.
I read somewhere that bitcoin mining consumes the same amount of electricity as some of the countries in the world !!! That’s crazy high. That too when bitcoin is currently not used for any useful economic purpose.

I have totally stayed away from it and intend to do so, but I watch the space closely both from the tech side as well as the speculation side

[anshumandun]

Originally Posted by am1m

What would help is if people who have made some money, or even lost money (because that is learning too) would post their personal experiences and learning.

I closed my home loan with money made through Bitcoin. So let me share my personal experience.

I took a risk by investing in crypto and I am taking a risk now by sharing it here because I will be judged as a 'greedy' person (going by the tone of this thread).

I think it was 2016 when the Bitcoin started gaining popularity and rose to relatively very high levels. I put in some money. I made money some days and lost other days. I figured out that I did not have the acumen or the mental bandwidth to get into daily trading. So I exited at almost 'no-profit no loss' situation.

Very soon the crypto market started going down and people panicked and started selling. I bought some bitcoin then. But the market slid further and I was sure that my money had gone down the drain.

I think it was in 2019 that crypto started rising again and it reached the same level as 2016. It looked like a good opportunity to get my money back (at no-profit no-loss) but as I had already assumed that the money was lost, I decided to sell only half of the bitcoins I had.

In 2021, bitcoin rose to nearly INR 50 Lakhs. I was beating myself for having sold half of my bitcoins in 2019

In 2021, I exited crypto and closed my home loan. And then the market went down again and I am again invested now. But my mindset is clear: If I make money from this, I am buying a car I don't need. If the money is lost, I am happy with my current garage.

What I think is that, as human beings, we are all wired differently. Some are 'greedy' in a way that they cannot imagine losing their 'hard-earned' money. And others are 'greedy' like me who don't mind risking some money to make or lose money.

To Each His Own!

[Thermodynamics]

Appreciate the OP, it invites discussion for the contrarion position.

Back in 2013 when Cryotos started getting popular in India, I could not understand the new concept, stayed away.
By 2017 I can get the concept but still stayed away quoting uncertain repurcussions and sovereign threats.
By 2020 I have felt FOMO but still stayed away because I had anchored the value to 2013.
By 2022 when every Tom, Dick and Harry is speaking about it, I am 100% sure this is not my cup of tea.

We may chose to appreciate or ctiticize Warren Buffet and Bill Gates who have called it a sham but at the end of the day this is going to be just a currency, that units values of other commodities. Infact it itself is a commodity. According to our RBI Governer, it is a commodity that isn't worth a Tulip.

Bad experience:

Originally Posted by Thermodynamics

One of my friend has been conned by Crypto trading agents.

Modus operandi would be something like this.

1. You would receive a social media group request such as in WhatsApp.
2. Some pretty fellow would get in to conversation and impersonate trust. The pretty fellow can very well be from opposite gender.
3. You'll be promised unrealistically high returns in a matter of months.
4. You are supposed to invest in three rounds and the entry round costs a menial 100$.
5. Since it is a small token you would want to try this out.
6. The agents allow you to trade in their websites. You can't get these websites through search engines. Links will be shared within group.
7. Very soon, your money will double and so would be your greed.
8. They ask for second round of investment. They are now asking 10000$.
9. The impersonator is in constant touch and keeps the trust level high. More group members start glorifying their achievements in discussions and you get carried away by overwhelming response. Your rationale gets overcast.
10. Your money quadruples and so is your desire to harvest.
11. But wait, you still have to play the third round. They are asking another 10 grands.
12. You don't have that much left in your kitty. You are also disappointed that they didn't inform you on the amount of investment required in subsequent rounds upfront.
13. Now you get into defensive mode as your antennae have finally erected.
14. You want to withdraw. They demand penalty.
15. You negotiate to deduct penalty and transfer the remaining.
16. End of conversation. Group vanished. Website vanished.
17. You can't do much as you did all these transactions at a foreign base. There have no Indian office, no point of contact and no clear regulatory or legal support for crypto transactions.

PS: I am providing the website name below for awareness purpose. Please don't click.
(77wtp)

The website name probably meant 7.7 lakhs went to pit.

I don't think I would ever invest in this Mayajal unless sovereign security or jurisdictions cover it.

[sandeepmohan]

Originally Posted by am1m

What would help is if people who have made some money, or even lost money (because that is learning too) would post their personal experiences and learning.

I did make some money and then lost that profit as I did not sell. Call it laziness cause of the process involved in selling and buying ethereum coin. I put in around $300. In my mind, it was decided that this was money I am willing to let go, worse case. In all the time that coin has been sitting there, the highest gain I have seen is 8%. That's when I should have sold cause that ain't exactly pocket change. Right now, the loss stands at -1.67%. It fluctuates every few hours. Its a pain.

I report from the other side of the ditch, that is New Zealand. We don't have crypto trading here. It all piggy backs the US of A. Every time you purchase coin, its essentially an order. I am not buying at the price listed during buying or selling as there is a delay of sorts before my order gets processed. I first sign up with a local crypto trading entity, place my order and point the coin to my soft wallet (An app that sits on your phone or computer). The reverse holds true when the time comes to sell. I need to point to a wallet address which is my Trading partner in NZ. The money does not reach me in an instant. In the time I place a sale order and by the time it happens, you would have lost some of gains you thought you had.

An interesting discovery I made was with Coin base. I could buy coin but when the time comes to sell, I could not point it back to my ANZ account. I was stuck!

Its all a voodoo thing. I don't understand it or where the money goes and into what. Its sounds like its going into some commodity called "thin air". A giant Gpu farm is supposed to be making money for you while its maintaining a ledger of sorts. I mean, how is that even possible.

[stanjohn123]

Crypto currencies like Bitcoin and Ethereum can be seen as an asset class. Invest and leave it for a few years to grow in value, which it has over the years. Trying to trade and make profits daily or weekly might not be smart as some coins are manipulated by simple tweets by honchos like Musk and few whales.

They( Bitcoin and Ethereum ) are highly deflationary due to their halving mechanism done every few years. This will surely shoot up their prices.

Comparatively , INR is going to the gutter wrt to the dollar and inflation is sky rocketing as well. So I don't know what is the realized gains from our 4-5% FD interests and MF interests compared to these 2 negative factors with our traditional money.

I think investing 10% of your income is not a bad idea because , the worst that could happen if it all goes to 0, is loss to your 10% income only. As always don't let greed overtake you and make you invest more once you see gains sooner.

[ValarMorghulis]

Well.. now that we are all sharing personal experiences.

The first I heard of Bitcoin was in 2012 when a friend suggest we both invest in it. Our plan was to get a measly 100 Bitcoins. But then I Googled BTC transactions and a horror of horrors spewed out, so we both balked.

Then I thought of investing in BTC again in 2016 when it was around $3-4k levels. Wife insisted that we avoid it and we did. The rest is history.
Do I regret it? May be.
Does my wife? No.
By God's grace we do decent enough to not have any home or auto loans. The only positive out of this entire thing was that I started a Zerodha account in 2018 and keep investing around 20-30k each month. The portfolio is still +14% so there's that.

Another acquaintance had 300 BTCs. He has retired and is currently off the grid.

[Amey Kulkarni]

Originally Posted by stanjohn123

Crypto currencies like Bitcoin and Ethereum can be seen as an asset class. Invest and leave it for a few years to grow in value, which it has over the years.

Totally! Love it or Hate it but the fact is you can't ignore it. Zooming out from the whole world's perspective there's no doubt that Cryptocurrency adoption has grown exponential within the last 5 odd years. For what purpose it'll be used is still debatable however it is considered as an asset class to hold which is why Institutions have entered and started to show them against their P&L statements.

Cheers,
Amey

[Neo18]

Originally Posted by mayukh42

No. At least not efficiently anymore.

Some years back, it was much easier to mine coins. You'd need a GPU, and even cards like GTX 970 (2014) had good hashrates. BTC and ETH (later) were on GPU based algos.

Mining would be done by a server that connects to the coin network and creates next hash of an existing one, using parallel computing cores of a GPU (like CUDA of Nvidia).

The catch is that the effort required to mine a coin increases with number of transactions. More the coins are used, more will be effort to get the next hash. In the last couple of years, especially during the lockdown when crypto interests skyrocketed, the hashrates kept decreasing and return of investment is now in years.

A high end card like RX 6800 XT or RTX 3080 Ti is also not good enough as the only card to give returns. So a farm of GPUs is needed, which adds to electricity consumption. (The latter IMO is the death knell for bitcoins in general. They are not environment-wise sustainable. We do not have enough energy supply to waste in fancy algorithms, but that is another discussion.)

BTC and ETH have moved away from GPU algos now. To mine those, you'd need a mining hardware like these.

And even for those coins on GPU, you need N cards with at least 8 GB memory each.

Is it true, that the approximate cost of mining a single Bitcoin is close to 21k USD? If this is indeed true, then what is the incentive to mine the bitcoin when its price goes below 21k USD, its currently trading at 19k USD approximately.

[stanjohn123]

Originally Posted by Amey Kulkarni

Totally! Love it or Hate it but the fact is you can't ignore it. Zooming out from the whole world's perspective there's no doubt that Cryptocurrency adoption has grown exponential within the last 5 odd years. For what purpose it'll be used is still debatable however it is considered as an asset class to hold which is why Institutions have entered and started to show them against their P&L statements.

Cheers,
Amey

Whether we like it or not crypto is the future of currency and driving force of blockchain technology. I'm a firm believer in its use cases. Not all coins will survive , but the ones that do, will be revolutionary to mankind. It's inevitable.

Just as we see countries holding us to ransom by holding our cash and freezing our assets as per their whims and fancies, it's just a matter of time when everyone realizes the pitfalls in traditional money and assets and move over to crypto.

The mistake most people do is, looking at crypto as only a source of making a quick buck. It's much more than that. Such people will disappear when the bear market hits. I am just upset I didn't learn about crypto much earlier.

[PreludeSH]

I hear people say crypto/blockchain is the future and then equate current private cryptocurrency with that completely.

As long as there are people who want to make money by selling to someone, its fine as long as the system allows one to do. Although stock market is backed by companies, it behaves like that too many times.

I invested 10K rupees to test out the apps and I am not even checking what happened. It was fine if I lost all of it and don't mind

If many people keep invested and it were to increase again and people make money, I would be jealous

[nutcracker]

I have to get this off my chest here. Lately the times have been such and I have been through so much internally, I don't have the heart to share it with family because of the disappointment it will cause to them.

Back in 2009, I made a small fortune selling Bitcoin I mined myself. They were really easy to mine back then. And being a PC gamer, I had the best hardware to do it.

The fortune I made was a figure around $4000. I was in my final year of engineering, so you can understand what that kind of money meant to me.

Fast forward to this year, So far, I have lost money in the seven figure range (INR) in crypto. In retrospect, the stories I'm hearing from my circle, it feels like crypto trading is just another fancy name for gambling.

In order to make my money back, I got in a mindset that I've never experienced before. It made me chase my losses. I was actually down in 6 figures but chasing losses made me reach well in the 7 figure range. That process made me lose 90% of my savings, max out my sole credit card, and basically deny my money that could have gone for the well being of my family. I still managed with home/fuel/utility/EMI expenses.

Eventually I had to say "Let us leave behind what just happened, and move forward."

This chasing mindset is really toxic.

Now I am kind of re-beginning building my finances from scratch. I'm in my mid-30s, recently married, no kids. Never could have imagined my newly married life would bring such times on me. Smh.

Please share your own experiences of such aspects like chasing mindset, cryto losses, bringing yourself back up etc.

[Quoter]

Disclaimer: I have no current investments in any crypto currency / asset

- My views on crypto for the past decade or so have been quite similar to what a lot of others have already expressed. For example, I find it difficult to fathom that Bitcoin, with no underlying asset can have any value. Or that any country, especially a country like India or China with strong controls on foreign exchange will allow a concept like Bitcoin to start behaving like a currency
- The term crypto currency is a very misleading term. The correct classification for all these tokens should be a digital asset, It's like you own a piece of a software forming the Bitcoin chain or the Ethereum chain. This is a very critical point in my argument
- Over the past few years, startups globally have started focusing on real world use cases for blockchain as a technology. Because most of the funding globally has gone to the blockchains powering crypto assets such as Ethereum, the innovation on using blockchain for real world use cases has also happened on some of these blockchains
- There are some very real uses cases which are now coming out of Ethereum for example. It is the leading blockchain powering the entire NFT industry. The more money gets poured into the industry, the more innovation and real world use cases will evolve (smart contracts are a real world usage of blockchain already in place)
- Like I mentioned the way to look at crypto assets is not like a currency. When you buy Ethereum, you are actually buying a part of the software running the Ethereum blockchain and paying for development of real world use cases using Ethereum technology.
- Over the past 2 years, I have started believing that some of these blockchains will actually evolve into real world usage and will start impacting the way we live our life. I no longer ascribe 0 value to all of these crypto assets, though I do think that 90% of the crypto assets will go bust in the future. However, the 10% which do survive, will end up creating tremendous value.

Having said all of the above, I still don't have any investments in any crypto asset for very simple reason that there is no clarity on the regulations evolving around it. To add, all of the crypto exchanges which you need to use to buy and sell crypto assets are unregulated. Most of them will actually go bankrupt themselves with no regulatory protection for your assets. The moment these two problems are solved, I will start putting in some money in some select blockchains which I think have the highest chance of transforming into real world use cases.

[m8002?]

Originally Posted by stanjohn123

Whether we like it or not crypto is the future of currency and driving force of blockchain technology. I'm a firm believer in its use cases. Not all coins will survive , but the ones that do, will be revolutionary to mankind. It's inevitable.

For the benefit of the members, can you please elaborate on the use cases that you are optimistic about.

Originally Posted by Quoter

... innovation and real world use cases will evolve (smart contracts are a real world usage of blockchain already in place)
- Like I mentioned the way to look at crypto assets is not like a currency. When you buy Ethereum, you are actually buying a part of the software running the Ethereum blockchain and paying for development of real world use cases using Ethereum technology.
-

How is a smart contract between 2 parties different ( and better ) and the current regular contract between the same 2 parties?

[jaaz]

Being a Financial Advisor, I've never recommended nor invested in Bitcoin or others. Few are comparing Bitcoin with the Stock Market. Both are different. The main reason for not recommending is it's intrinsic value.

A company is backed by it's assets, a Currency is backed by sovereign guarantee as well as it's reserves. Gold or other metals have their own intrinsic value. If any govt. launches Digital currency, we can think about it. And it should be pegged to the Country's currency. Why does demand exists for a fictitious asset? Unless you're on the other of the law, there is no need to invest in Bitcoin. It's purely speculative.