Investing

Why I think an identity verfication blockchain is a sound investment

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  • Aug 12th, 2017 11:23 pm
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What could be potential impact on cryptocurrencies when new regulation inacted? Banks are subjects to AML, terrorism financing, know your customer, sanctions and plenty of other regulations that are absent in Bitcoins at the moment.
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
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xgbsSS wrote:
Aug 11th, 2017 6:21 pm
That's not my point. My point is that cryptocurrency or currency in itself shouldn't be considered an investment because owning currency on itself does nothing. Investing in my point of view is buying an asset that actually produces value . Buying a cryptocurrency is solely based on assuming people would value one unit of that currency higher than it is now. So, in one word, gambling.
OK so let's assume Bitcoin is like Forex. A dollar or bitcoin doesn't produce value, it's a representation of value. Bitcoin doesn't produce value by itself, it's just a more perfect and democratic medium for trade than fiat currency. Other cryptocurrencies work differently. They work as a medium to fuel an exchange of data. They work similar to Amazon or Microsoft stocks. You're endorsing an idea that produces value. Tokenized blockchains simply replace $USD investments for their own chip which allows you to value the 'stock' at direct face value, rather than comparing it to something else. Not all cryptos are Bitcoin. Some have contracts attached to them that require a specific digital service be rendered, or contract to be recorded indefinitely and immutably.

If your point is that it's difficult to convert crypto to fiat, I could point you to dozens of projects, both tokenized and untokenized that work the exact same as a Visa debit card. Monero, Tokencard, Coinsbank, Spectrocoin, Uqid... and there are many more in the pipeline. They all eventually want to be the Visa/Mastercard of crypto, but understand that they need to go through traditional channels in order to gain acceptance.
I am not saying that you won't make money. If anything, there is a good chance that you can make money out of it. What bothers me about it is that there is no valuation I can take a look at to determine how to value these units. Currency in itself is the tool we value the things around us with. That in itself is not an investment. Also, if we are to take cryptocurrency as a serious thing, we shouldn't then value them against the CDN$ or US$. If we really want to adopt a cryptocurrency as a standard, people need to frame the value in the cryptocurrency, not in the traditional currency. So if that is the case, then the cryptocurrency, in a way, fails for it's purpose. You shouldn't really care whether the price of the cryptocurrency increases or decreases compared to the US$. You have the same amount of cryptocurrency.

Equating buying shares of marijuana stock via RBC and buying cryptocurrency are not equivalent. Cryptocurrency is equivalent to buying a foreign currency or performing forex trading. Other than getting more people to accept different cryptocurrencies in the world increasing it's value compared to a traditional currency, there is little to no value metric to go by. Also, if that is all you are buying in stock, there are much cheaper brokerages to use than RBC.
Let me try to organize these into talking points.

1.) Cryptocurrencies are compared to $US and $CDN, just like any other asset or commodity. For now anyways, fiat is more liquid so there needs to be a comparison.

2.) Charts exist just like in the stock market where you can do technical analysis on each currency, and there exists several forums (Slack, Steem, Telegram, Reddit, Twitter, Youtube, etc.) where you can do fundamental analysis.

3.) There are actual people who ignore the $BTC/$USD relationship. These are purists who believe that crypto is a better standard of measuring value. While I tend to agree with them on a philosophical level, I'm a bit more grounded in reality.

4.) Finally, and this is the most important point.. Crypto works exactly the same as the stock market in terms of determining relative value, it's in fact a more free and perfect market, because the value of 'shares' isn't muddied by the value of printed currency. We aren't printing money at an interest rate, or replacing notes. We aren't easing. We aren't inflating, in fact we're deflating. It's perfectly auditable. Game Theory ensures books can never be cooked. Compare that to the US Federal Reserve and tell me which currency gives you more confidence.
Last edited by Syne on Aug 12th, 2017 2:45 pm, edited 4 times in total.
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dlhunter wrote:
Aug 12th, 2017 12:57 pm
What could be potential impact on cryptocurrencies when new regulation inacted? Banks are subjects to AML, terrorism financing, know your customer, sanctions and plenty of other regulations that are absent in Bitcoins at the moment.
We're seeing this now. Plenty of ICOs won't accept money from US residents and Bitfinex just pulled customer support from the United States. SEC is starting to regulate cryptocurrencies by threatening to classify them. But you know what. Crypto is fighting back. Filecoin is open to only accredited 'institutional investors' and 0x is requiring several forms of validation (*Cough* Civic) in order to participate. Crypto is sending a strong message. You want regulation? We can actually do it better. If you're still not convinced though, I think you'll find that most of the world is NOT the United States, and that those countries are sick of playing second fiddle to US interests.. and crypto does a damn good job of facilitating a pull away from the greenback.

In a way I feel bad for Trump, because this has nothing to do with him.. but history will blame him anyways.
In a perfect system, corporations would fear the government and the government would fear the people. - David Wong

Check out caRpetbomBer's picks in this thread.
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Before we continue, I beg of you to read this article
https://hackernoon.com/why-everyone-mis ... 0b0151c169

It's a fun and easy read, and will give you the fundamentals of exactly cryptocurrencies are and why they are gaining in popularity.
In a perfect system, corporations would fear the government and the government would fear the people. - David Wong

Check out caRpetbomBer's picks in this thread.
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leoben wrote:
Aug 12th, 2017 9:20 am
What do you think will happen in November? I know it's not wise to try to time the market and wait for a dip but with bitcoin at an all time high and my initial fund being worth barely a single bitcoin.. I'm conflicted.
I think he is referring to Metropolis and the switch of Ethereum to POS.
In a perfect system, corporations would fear the government and the government would fear the people. - David Wong

Check out caRpetbomBer's picks in this thread.
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Syne wrote:
Aug 12th, 2017 2:45 pm
4.) Finally, and this is the most important point.. Crypto works exactly the same as the stock market in terms of determining relative value, it's in fact a more free and perfect market, because the value of 'shares' isn't muddied by the value of printed currency. We aren't printing money at an interest rate, or replacing notes. We aren't easing. We aren't inflating, in fact we're deflating. It's perfectly auditable. Game Theory ensures books can never be cooked. Compare that to the US Federal Reserve and tell me which currency gives you more confidence.
I thank you for your response, as I like to try to understand more about cryptos, but I do take issue with this point. Regardless of whether a there is printed money or not, the value of a company will change with inflation or deflation to reflect this. So even in high inflation, (but not hyperinflation), the company's value should (holding all things equal) should go up by inflation. The same would be the same in Bitcoins or cryptocurrency units. As the value relative to US$ of bitcoin goes, up, the value of a stock, let's say that marijuana stock you bought, would also go down in terms of bitcoin since there is a deflationary value in bitcoins. Unless the currency value is unstable causing companies to not be able to perform their economic activities, the price of shares will move relative to the value of the currency used.
Also, i will repeat, a unit of common share is not the same as a unit of currency or commodity. The parameters to which you value a common share vs a commodity or currency is completely different. So I don't agree with the notion that a cryptocurrency market is a more free and perfect market because they are fundamentally different things. A cool thing that could one day occur would be to have a crypto stock market where company shares are traded in cryptocurrency and share ownership is completely anonymous. If this so called market existed, then yes, I would agree with your notion.

One thing I am curious though Syne, is what is your opinion on the multiple cryptocurrencies that exist. Why do so many exist and what really is the advantage of having so many? To me, the market should work toward having just one or two max currencies. These currencies are not issued by sovereign nations, but only for the internet itself so there doesn't seem to be a limitation in having just one.. To me, the multiple cryptocurrencies muddies the whole market.
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