Crypto Buy Bitcoin if it crashes

true story, but unfortutenly paypal is just traditional means in a "modern packaging" if it make sense.

another country will be Zimbabwe, but just like my earlier point, as important as they are in the natural resources economy, hardly important in the world scale, so again irrelevant to the world economy.lack of a better word. not important enough in the world to make a shift.

will you sell your house for velocity points or casino chips ?


im not saying never, im just trying to warn people before getting their $$ in without thinking. its just like speculating on small cap shares that would be the best comparison.

 

Of course it's heavily speculative and as volatile as can be
I'm saying that you have some very bright people involved and I think it's a space to watch - for the innovation that comes out of it.

 

I am in my early research phases on alternative currencies (Cryptocurrencies). In fact, I'm ordering a TREZOR online shortly and will have this in my lap first, PRIOR to buying any cryptocurrencies (I won't disclose which ones on here - I'm still learning and educating myself - wouldn't want people to listen to any of my gut-"feels" as actual advice.... Unlike Katy Perry, DO be afraid to catch my feels re: cryptocurrencies!)

With that out of the way...

No one on this thread has yet mentioned one massively important thing about our existing, printed paper (and created digital versions thereof) of currencies like AUD, GBP, USD, YEN etc etc.

NONE of them are any more pegged to anything meaningful (e.g. gold standard or anything of genuine scarcity). So, the complaints cited earlier in this thread pertaining to BitCoin/Ethers any other types of Coin) not being pegged to anything scarce, is genuinely not understanding the very nature of mined digital currencies delivered via a blockchain transparent ledger system!

The very concept of cryptocurrencies delivered this way IS its scarcity and forced limitation.

I don't doubt that the (literally!) HUNDREDS of new coins ICO'ing right now aren't ponzi schemes - everyone's trying to emerge as the "One Coin to rule them all". That will be a bloodbath.

But... Cryptocurrencies unlike FIAT ones CANNOT be printed into oblivion nor can it be manipulated behind closed doors (closed computers, closed ledgers) by central banking systems or any other ill-will'ers. Everything with cryptocurrencies is transparent and that frankly frightens the bejesus outta central banks and governments. So, you can bet your last Sunday picnic that Gov's and central banking systems will do everything they can to stop (or if not stop, regulate and control) these emerging currencies as much as possible.

I concede a point though... a very valid one mentioned that if central banks/govs want to control it, the best way is to ensure people can't easily make day to day (point of purchase retail, general banking, or other..) easy payments with these technologies, IN THEIR SYSTEM.

What I mean by that is; theoretically, I could sell my second hand car to a private second hand buyer, for BitCoin (for example), but I can't do my weekly grocery shop at Aldi-Coles-Worths and pay in cryptocurrencies yet. Gov will likely try to suppress any suggestions/desire by general retail to enable these payment methods (if these currencies grow in popularity).

 

Also, looks like ATO established rules long ago (2014) for taxation events for the trading use, mining, and capitals-gains scenarios for cryptocurrencies:

Tax treatment of crypto-currencies in Australia - specifically bitcoin

Worth considering as part of any 'investment' into any cryptocurrency.
So in my mind, as others have said, it is really just a hedge. Like physical Gold/Silver, Cryptocurrencies are subject to both CGT on any profit made when selling them, but both (generally) appear to be GST-free in trading/transacting on it (I'm not tax lawyer; don't quote me on that).

But both seem to have additional holding costs. For Gold/Silver you need to physically store it (either a safe installation on your property, or private storage, or bank storage which is something few would ever recommend for precious metals...), but there's a few hundred dollars worth right there.

Crypto's then have TREZOR (or some other form of physical storage) for secure cryptocurrency storage. A TREZOR shipped to your house including postage is around AUD $200.

So, again, more holding costs to consider (storage, CGT events) with no real deductibles able to be claimed...



Finally and just to add (and draw back to the title of this thread "Buy Bitcoin if it crashes") you really need to be ready to strike for any significant crash. The currency is so volatile that the window of opportunity to buy crashed stock may only be minutes or hours and not days. This means you need to have your TREZOR, your Exchange accounts and bank-account-linkages all already set-up/established, if you TRULY want to strike on any lull in the market, in those seconds/minutes when the iron is hot. Just food for thought.

 

Jim Rickards on bitcoin and the real possibility of the IRS freezing bitcoin accounts/exchange's.

 

Thanks for sharing the video.

IRS/ATO (or any gov entity for that matter) may be able to freeze the exchanges; but those securely storing their currencies in a detached physical and/or paper storage, will have 'some' security from their government doing this to them.

 

Bitcoin Bubble

This week was arguably the most significant yet for "crypto-currencies" in Australia. At least since a guy from the nondescript Sydney suburb of Gordon claimed to be the mastermind behind bitcoin.

If your eyes have already glazed over, I don't blame you. I don't particularly enjoy writing about crypto-currencies, but given the genuine technological breakthroughs involved and the potentially damaging financial bubble that's building, they've become impossible to ignore.

 

My basic understanding and some of the pro argument i have heard for bitcoin, is that it is of limited supply. While this may be true within itself, is this fact not negated by the infinite supply of new and competing crypto currencies?

 

Almost 6k per single bitcoin...

I remember when my mate at work was trying to get me to buy them for $100 each.... Naturally I thought he was crazy and never bought any.... Good move!

 

Kinda...but none of the competition has had the gravitas (so far) to knock Bitcoin off its perch.

I think it's a bit like competing OS when a new type of computer is introduced.

I.e there were lots of Unix type things....now it's mostly Linux.

When PCs started there were lots of options...now it is predominantly MS Windows.

Mobiles = Android/iOS.

Bitcoin is currently the "reserve" crypto-currency...

Not to say it will be that way into the future...but it is looking strong after not batting an eyelid with the Bitcoin cash fork...

 

Agree. Ether (original and forked) will probably be up there with bitcoin/bitcoin cash as the 'reserve' currencies that will eventually become 'you can buy a coffee with it' use cases.

Almost all of the 300+ others will fade into obscurity unless they offer genuine unique use-case applications.

Most dont.

 

If you want to take a punt on something speculative to recover after it crashes I've got some tulips inherited from dutch relatives. Only been waiting 380 years for the prices to recover.

 

Does this mean the initial purchase of bitcoins is a tax expense?

 

My limited research says 'no'.

Crypto's incur CGT events when you sell and trade back into AUD and a profit/gain is made.

Perhaps some of the associated purchase costs may be able to be picked up? (Exchange fees, trezor/storage costs etc.), but I'm no accountant so DYOR.

 

Interestingly, you can pay your bills via bpay and transfer into AUD bank accounts using cryptocurrencies at
Bitcoin to AUD | Pay to any Bank account | Living Room Of Satoshi
There are in built fees that make it less attractive though.

Like yourself, I have started dabbling in cryptocurrencies (trying out different wallets and exchanges and reading up on different things)
I found this podcast with Ryan Zurrer very interesting
5by5 | The Critical Path #203: ICOs with Ryan Zurrer
He works for Polychain capital, a hedge fund that invests in blockchain and cryptocurrencies (they have some pretty heavyweight venture capital investors Andreessen Horowitz And Union Square Ventures Invest $10 Million In New Digital Assets Hedge Fund and their homepage Polychain Capital is laughably bare and makes it clear that they are not for average investors)

I think that blockchain technologies (of which cryptocurrencies are a subset of) are where internet and ecommerce were at in the late 1990s. It's very loosely regulated and many if not most will go bust. However there is tremendous innovation, with the potentially the same level of disruption and possibly winners who win big like Amazon and Facebook emerge.

My personal take is that I find the cryptocurrencies that are a token for real world activity are more likely to have staying power.
Powerlegder (https://powerledger.io) use blockchain and tokens to make a network for peer to peer electricity sales (where potentially you can sell your excess solar power to anyone instead of the network provider), Siacoin and Filecoin (still to get off the ground) to trade cloud storage capacity (see more about the 2 at this link Investors poured millions into a storage network that doesn’t exist yet) where it hopes to compete with Amazon S3 storage by having people effectively rent out their spare hard drive space using tokens, etc.
I'm not saying that specifically these will get up and prosper but that uses of blockchain for such real world transactions makes for very interesting possibilities.

 

Many of the new crypto 'currencies' have unique properties to differentiate them.. it's truly fascinating to watch the total market cap grow at coinmarketcap.com .. total market cap is still negligible but it's growing at a rate that I don't think can be completely ignored

 

Food for thought on the 'scarcity value' of cyptocurrencies (well, BTC/ETH currencies in specific - I can't comment on the hundreds of others...).

People are against fiat currencies these days because it seems like almost every country is just printing endless cash. No scarcity value since USD/AUD are detached from the gold standard (something that IS scarce), meaning govs can print to eternity and inflation skyrockets as a result. If this goes on you will be scratching your head in 10 years going "Why on earth does 2ltr of milk at woolies costing $32.00 when I am still only earning median salary which has only increased slightly in this same period?".

But with Bitcoin and Ether currencies, yes there are only a finite volume of both ever to be made. But here's the thing: both are divisible (currently!) by up to EIGHT decimal points. If BTC grows in usage/trading in particular; there is speculation that another (9th) decimal point division will be added... Isn't this effectively just like turning on the printing press for fiat currencies?

Except, instead of printing more and more notes seemingly endlessly; you are doing the opposite (but having the exact same effect) by making cryptocurrencies divisible by seeming endless fractions/decimal points?? Or am I missing something?

Since a physical banknote/coin doesnt exist for crypto's; each coin becomes endlessly divisible, meaning no real scarcity value because more can simply be 'printed' by opening up a 9th, 10th etc. decimal point.

 

Everyone (except maybe Zimbabwe and Venezuela) learned the lessons of the 1930s, etc.
The way to "print" moneys via measures such as quantitative easing of super easy credit, which increases the money supply but not inflation.
Even with gold currencies, there was inflation. There was debasement of the currency (where gold and silver coins would be adulterated with copper, etc - the roman emperors did this a lot), as well as with Spain's discovery of the Americas which almost overnight increased the gold supply by orders of magnitude.
There were also good reasons why the gold standard was abandoned - everyone fixing their currencies to gold and thus to each other just made things too rigid (Keynes had a good go at Churchill for it in the 1920s John Maynard Keynes' golden rule breached by Winston Churchill)

I think it's actually the opposite, it's actually a form of deflation. 1 bitcoin becomes worth more over time and it rewards the people who got in early and kept their bitcoins.
Inflation - turning on the printing presses should do the opposite, where 1 bitcoin is worth less over time.
Over the long term, it's not that good for a currency as it encourages everyone to hoard it, not use it for commerce!
Actually it kind of reminds me of the Sydney housing market - it rewards the geezers who got in early
Satoshi's original (still untouched) stash of 1million bitcoin (which was of course free as he was mining it to start things up) is now worth approx $6billion

It is believed that Satoshi Nakamoto owns 1 million bitcoins (or more) which makes his present net worth at the time of writing this article to be $2.6 billion.
In 2009 January, Satoshi mined the Genesis block, and in 2010, he officially stopped communicating. Between this period, the bitcoins came into existence exist on the blockchain ledger, but they have not been used or spent. This proves how much Satoshi owns.​

You actually want a little bit of inflation, it keeps growth ticking over and accounts for improvements in productivity from technology, etc.
There's a reason the RBA has an inflation target of 2-3% over the business cycle and not zero.

I don't think the absolute number of coins will be the major issue. It will be the other stuff - how scalable is it, privacy vs a traceable blockchain like bitcoin is and the transactions fees that are entailed that will determine the future of bitcoin. The network is already running into serious capacity issues (which is one of the reasons behind the Bitcoin Cash fork, as well as upcoming measures such as segregated witness, etc).

 

Definitely raise some good points there.

Forking BTC and ETH just once each also opens the door to more forks down the road. Then, the new-forked iteration may go on a much more solid run than the existing/previous versions due to perceived inferiority since the new fork is all sparkly with better tech/efficiency/it-now-wipes-my-bum-for-me factor.

I am bullish on crypto though (might not sound like it!). Just want to make sure I buy the right stuff that has the best chance of growth. And as others have said, the ones that are most likely to actually allow you to buy stuff with it in everyday commerce. I think i can count on one hand the crypto's that have a chance of this. Thing is, these are all decentralised systems. As govs increasingly try to interfere and create more centralised process/governance to them, I dont see any wasy way cryptos can go usage-mainstream.

That said, last week I read up all of the ATO's website on cryptos. You can bet tax departments are first in, right!!! Yup, ATO has had cryprocurrency tax rules in place since 2013 and have evolved/expanded taxation requirements every year since.

 

The Global Elites’ Secret Plan for Cryptocurrencies - The Daily Reckoning

"Blockchain does not exist in the ether (despite the name of one cryptocurrency) and it does not reside on Mars. Blockchain depends on critical infrastructure including servers, telecommunications networks, the banking system, and the power grid, all of which are subject to government control.

A group of major companies, all regulated by government, have announced a joint effort to develop an open-source blockchain as a uniform standard for all blockchain applications. The group includes JPMorgan, Wells Fargo, State Street, SWIFT, Cisco, Accenture, the London Stock Exchange and Mitsubishi UFJ Financial. That’s not exactly five guys in hoodies working in a garage. That’s a sign of the corporate-state consortium taking over."